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Debt Relief – Insolvency – Bankruptcy Information » Insolvency » What is the difference between receivership, conservatorship, and nationalization?

What is the difference between receivership, conservatorship, and nationalization?

Which form of government regulation is the US using with the banks it took over?


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3 Responses to "What is the difference between receivership, conservatorship, and nationalization?"

  1. Pfo says:
    They are all pretty much the same thing, but people don’t like that N word.
  2. rehobothbeachgui says:
    Receivership is when an individual company (usually a bank) has gone bankrupt and the government temporarily takes over the institution in order to sell it to another company.

    Conservatorship generally is used to indicate that a company is still in control of itself but with a degree of advice and consent from a third party. In the instance of chapter 11 bankruptcy, a court appointed body

    Nationalization is when an entire (or significant majority) industry or economic sector is taken over by the government

    In the first two cases the government involvement is generally short term. in the later it is longer.

  3. Cynical about Skepticism says:
    A conservatorship is any appointment of a person to manage the affairs of another person or corporation.

    A receivership is one kind of conservatorship. It’s when a court or statute provides for the appointment of someone to manage the affairs of a corporation. Usually the corporation is in financial distress. Most U.S. railroads, for example, were placed in receivership in the early 1900s, when the automobile first began to take people from the trains and put them onto the roads.

    A receiver or conservator does not own the corporation under his or her control. He or she is a fiduciary; this means that the receiver or conservator is obligated to manage the affairs of the corporation with utmost care for the interests of the true owners–who would be the shareholders, in the case of a corporation.

    Nationalization has nothing to do with receivership or ownership. Nationalization is when the government owns 100% of a corporation–every single share.

    The government neither placed the banks in receivership nor nationalized them. The government provided loans to most banks. Loaning money is not a form of nationalization or receivership. In some cases, the government bought shares of banks, which means it has partial ownership. But because the government owns no controlling interest in the banks–i.e., it does not own more than 50% of the stock–the government cannot be said to have “nationalized” the banks.

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