The idea of a special resolution authority for companies deemed too big to fail was given a thumbs-down by bankruptcy experts speaking Wednesday at the DBR Summit in New York.

Richard Levin, a partner at law firm Cravath, Swaine & Moore LLP, said that the Federal Deposit Insurance Corp., which would be given resolution authority under a proposal currently before the House of Representatives, isn’t the right body to perform such duties. “It’s not there to help creditors,” he said, but to wind up banks quickly and replenish its insurance fund.

Levin added that in the case of the major financial institutions that are at the center of the “too big to fail” discussion, “there isn’t cash to keep the business around,” with such cash being central to any efforts to reorganize a business.

He and Stephen Lubben, a professor of law at Seton Hall University, said that the existing Bankruptcy Code and system is up to the task of handling the failure of financial institutions, with some modifications.

“The bankruptcy system can work with some simple tweaks,” said Lubben. Among those tweaks, he proposed scaling back safe-harbor protections for some securities.

Meanwhile, Barry Adler, a professor of law and business at New York University School of Law, opposed the idea of a special resolution authority because he said it would reinforce the problem of moral hazard as companies figure that risky decisions are backstopped by the government. “It’s more of a problem than a solution,” he said.