The CCP Research Foundation, a research institution interested in good governance and public trust in financial institution has begun a study in to the cost of insolvencies driven by banks. The study has is being undertaken by a panel of experts including solicitors, forensic accountants and insolvency practitioners.
The focus of the study will be to look at the costs associated with insolvency for businesses which have been put through insolvency regimes (liquidation, administration etc) by their creditor banks in instances where the bank itself may have been guilty of some kind of misconduct. This misconduct often stems from the selling of inappropriate and onerous financial products (for instance interest rate hedging products) or steps taken by the bank once the borrower had been placed in to its special lending unit.
The study will not just look at the financial impact on both the borrower and the lender of bank driven insolvency, it will also examine the personal and social costs occasioned by this kind of restructuring.
The first stage of this project is the ingathering of information and testimony. The study has asked that any business that feels that its winding-up was driven by its bank following some kind of lender misconduct contact them and fill out a short confidential questionnaire.
Once the first stage of this project has been completed the study will proceed to consider whether regulation and the law adequately addresses "rescue culture" concerns where a business is placed in to liquidation by a creditor who may be guilty of misconduct.
Further information can be obtained by contacting the study: