COORDINATION RIGHTS AFTER BANK FAILURE

In spring 2023, the Federal Deposit Insurance Corporation (FDIC) resolved three of the four largest bank failures in U.S. history. When the FDIC resolves failed banks, this Note argues, it (unselfconsciously) allocates coordination rights-that is, the right to legally permitted economic coordination. Specifically, by reflexively merging failed banks into larger banks, the FDIC adopts antitrust law's preference for hierarchical firm-based coordination. Recent scholarship challenges that pattern in antitrust law. In banking, it is especially problematic. Yet even according to antitrust and bank resolution orthodoxy, the FDIC's allocation of coordination rights is incoherent as such. This Note proposes instead that the FDIC self-consciously disperse coordination rights after banks fail. The Agency can do so without new law, turning failed banks into quasi-worker cooperatives.