The Jeffrey M. Lacker of the Federal Reserve of Richmond reports;  Here are the highlights of my speach at the National Conference of Bankruptcy Judges Annual Meeting at Chicago, Ill.

• The bankruptcy process is an effective tool for reconciling the incentives of creditors and debtors. Yet the government has a long history of handling large complex financial institutions outside the Bankruptcy Code.
• This has created two mutually reinforcing conditions: Investors feel protected by an implicit commitment of government support, and policymakers feel compelled to provide that support to avoid a disruptive adjustment of expectations.   Jeffrey Lacker’s Speech