International Banking ♦ Online 64 Va. J. Int’l L. Online 1 (2023)

Surviving the Stampede: Market-Based Resolutions vis-à-vis Overregulation

BEPI PEZZULLI

This essay examines the contrasting resolution mechanisms for banking failures in the United States and Switzerland by analyzing the cases of Silicon Valley Bank, Credit Suisse, Signature Bank, and First Republic Bank. Factors contributing to their downfall are explored, such as SVB’s excessive exposure to endogenous risk and Credit Suisse’s poor governance and compliance blunders. The resolution mechanisms used in each country—deposit guarantees in the US and corporate law changes in Switzerland—are compared, highlighting the need for a balance between regulatory frameworks and market discipline to mitigate future crises. Effective risk management, robust governance structures, and strict compliance are emphasized as crucial components in ensuring a stable financial system.