scholarly journals The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution

2021 ◽  
Author(s):  
Ilya Kokorin
Keyword(s):  
Financial Stability ◽  
Multinational Enterprise ◽  
Full Potential ◽  
Insolvency Law ◽  
Value Maximization ◽  
Bank Resolution ◽  
Policy Objectives ◽  
Group Members ◽  
Scope Of Application ◽  
Financial Interconnectedness

AbstractThis article traces the emergence of the concept of ‘group solution’ and its manifestations in insolvency law and bank resolution as an alternative to the rigid entity-by-entity approach. The rise of this concept can be linked to the recognition of the specificity of problems related to the insolvency of multinational enterprise groups, arising from group operational and financial interconnectedness. This has not happened at once, but has resulted from the evolution of views and ideas, evident in hard and soft law instruments of the 2000s and the 2010s. In light of this important development the article explores the concept of a group solution, its rationale, scope of application and limitations. It concludes that despite the gradual acceptance of the group phenomenon, a group solution has not been formed as a coherent and well-defined legal principle. Instead, it represents a variety of approaches, tools and practices, which pursue different policy objectives underpinned by different societal values. Among them are asset value maximization, business rescue, the protection of financial stability and the preservation of banks’ critical functions. With all its flexibility, a group solution has one pervasive limitation—it cannot trump the interests of individual group members and their creditors. At the same time, in order to realize the full potential of a group solution, it is necessary to embrace the group-sensitive and forward-looking interpretation of creditors’ interest, facilitating commercially sensible and practical group solutions.

Third-Party Releases in Insolvency of Multinational Enterprise Groups

2021 ◽  
Vol 18 (1) ◽  
pp. 107-140
Author(s):  
Ilya Kokorin
Keyword(s):  
Business Models ◽  
Multinational Enterprise ◽  
Third Parties ◽  
Third Party ◽  
Insolvency Law ◽  
Legal Responses ◽  
Group Members ◽  
Legitimate Expectations ◽  
Enterprise Groups ◽  
The Eu

Abstract Europe is experiencing the rise of restructuring proceedings, which has recently culminated in the adoption of the Restructuring Directive. While being a major achievement in harmonising substantive (pre)insolvency law in the EU, it lacks rules targeting restructuring of multinational enterprise groups. As a result, effectiveness of group reorganisations may be undermined. Nevertheless, some jurisdictions adopt innovative tools, facilitating group solutions. Among them – third-party releases. Such releases entail a total or partial discharge or amendment of claims against third parties, such as co-obligors, guarantors and collateral providers (typically, group members) in the insolvency or restructuring proceeding of the principal debtor.The diversity of approaches to third-party releases highlights their controversial nature. Such releases may frustrate legitimate expectations of creditors relying on cross-guarantees and other forms of cross-liability arrangements. Extending the effects of debt reorganisation to third parties in the absence of a separate insolvency proceeding may also run contrary to the longstanding views on corporate insolvency and entity shielding. This article argues that a single-entity-restructuring risks being short-sighted and that third-party releases are a matter of commercial necessity, synchronising legal responses with actual business models and better addressing the complexity of group interdependencies, realised through various intra-group liability arrangements.

scholarly journals Private Equity and Financial Stability: Evidence from Failed Bank Resolution in the Crisis

2021 ◽  
Author(s):  
FDIC Working Paper Series ◽  
Manju Puri ◽  
Emily Johnston Ross ◽  
Song Ma
Keyword(s):  
Financial Stability ◽  
Private Equity ◽  
Bank Resolution

scholarly journals Institutional Arrangements for Fintech Regulation and Supervision

FinTech Notes ◽  
2020 ◽  
Vol 19 (02) ◽  
Author(s):  
Charles Taylor ◽  
Christopher Wilson ◽  
Eija Holttinen ◽  
Anastasiia Morozova
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Conflicts Of Interest ◽  
Financial Sector ◽  
Institutional Arrangements ◽  
Dual Roles ◽  
Regulation And Supervision ◽  
Regulatory Architecture ◽  
Institutional Structures ◽  
Policy Objectives

Fintech developments are shaking up mandates within the existing regulatory architecture. It is not uncommon for financial sector agencies to have multiple policy objectives. Most often the policy objectives for these agencies reflect prudential, conduct and financial stability policy objectives. In some cases, financial sector agencies are also allocated responsibility for enhancing competition and innovation. When it comes to fintech, countries differ to some extent in the manner they balance the objectives of promoting the development of fintech and regulating it. Countries see fintech as a means of achieving multiple policy objectives sometimes with lesser or greater degrees of emphasis, such as accelerating development and spurring financial inclusion, while others may support innovation with the objective of promoting competition and efficiency in the provision of financial services. This difference in emphasis may impact institutional structures, including the allocation of staff resources. Conflicts of interest arising from dual roles are sometimes managed through legally established prioritization of objectives or establishment of separate internal reporting lines for supervision and development.

Part II Bank Resolution, 7 Banking Act Restructuring and Insolvency Procedures

2016 ◽  
Author(s):  
Olivares-Caminal Rodrigo ◽  
Douglas John ◽  
Guynn Randall ◽  
Kornberg Alan ◽  
Paterson Sarah ◽  
...  
Keyword(s):  
Financial Services ◽  
Insolvency Law ◽  
Banking Reform ◽  
Bank Resolution ◽  
Essential Services ◽  
Corporate Insolvency

This chapter starts by introducing the Insolvency Act 1986 and the Insolvency Rules 1986. It argues that for the most part they work effectively in the rescue or liquidation of companies. Special insolvency regimes have been put in place for a number of important industries in order to meet the situation where the application of the normal corporate insolvency law to a monopoly company causes essential services to be interrupted. The area governing both banks and investment firms has undergone more recent reforms with the introduction of the Financial Services Act 2012, the Financial Services (Banking Reform) Act 2013, and with the move to implement the Bank Recovery and Resolution Directive. Specific measures concerning the broader special administration and insolvency arrangements are addressed, looking at the treatment of depositors and client assets and explaining the priority accorded to them during the administration and insolvency procedure.

scholarly journals GOALS OF THE NATIONAL BANK OF SERBIA

2019 ◽  
pp. 091
Author(s):  
Srđan Golubović ◽  
Nataša Golubović
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Domestic Legislation ◽  
National Bank ◽  
Policy Objectives ◽  
Legal Position ◽  
The Global Financial Crisis

Starting from the legal position of the National Bank of Serbia, the paper analyzes the objectives entrusted to this institution by domestic legislation. In line with the dominant monetary paradigm, the main goal of the central bank of Serbia is price stability. After the global financial crisis, financial stability is increasingly mentioned as the objective that central banks implement. This also applies to the central bank in Serbia (National Bank of Serbia), which has a clear mandate to take account of financial stability, in addition to monetary stability. Finally, as an important subject of economic policy, the National Bank of Serbia, by exercising the entrusted functions also affects the achievement of other economic policy objectives. It should be kept in mind that domestic legislation precisely determines the hierarchy of the objectives of the central bank, considering that it explicitly stipulates that the National Bank of Serbia primarily takes care of monetary and financial stability, and only then it provide support for general economic policy, provided that it does not jeopardize the exercise of the basic objectives.

Deposit Protection and Bank Resolution

2015 ◽  
Author(s):  
Kleftouri Nikoletta
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Global Financial Crisis ◽  
International Standards ◽  
Banking Union ◽  
European Banking Union ◽  
Bank Resolution ◽  
Protection Systems ◽  
The Uk ◽  
The Impact

The 2007–08 global financial crisis proved that the interests of bank depositors are inadequately protected. Although a vast expansion in deposit protection systems around the world followed, our understanding of the impact of those systems and their interaction with bank resolution is still in its infancy. The focus of bank resolution studies has been on the largest systemically important banks, which have wholesale creditors who would be bailed in, leaving retail depositors untouched. However, many banks rely mostly on deposits for financing, and the number of banks of this form is expected to increase. This book aims to explain and provide current material analysis of deposit protection and bank resolution regimes. The analysis is based on an examination of the traditional rationales for creating deposit insurance and bank resolution, and a specific study of the UK, EU, and US legal frameworks. It aims to offer an analysis of this topic and to cover all relevant regulations, from its origins to its most recent developments, in a systematic and thorough way. It approaches the much-desired objective of financial stability from a different angle: that of depositor protection. This book comprises ten chapters, analysing: the rationales for creating a deposit protection system; the limitations of deposit protection systems; the European deposit insurance framework; the European banking union; recent cases on deposit guarantee schemes; international standards on deposit insurance; the UK deposit insurance framework; international and European regulatory developments on bank resolution; the UK Special Resolution Regime; and the US paradigm.

How Can We Help Alleviate the Financial Concerns of Non-Directed (Altruistic) Living Kidney Donors?

2020 ◽  
pp. 152692482097858
Author(s):  
Ariella Maghen ◽  
Georgina Mendoza ◽  
Grecia B. Vargas ◽  
Sarah E. Connor ◽  
Sima Nassiri ◽  
...  
Keyword(s):  
Financial Support ◽  
Financial Stability ◽  
Negative Impact ◽  
Financial Burden ◽  
Indirect Costs ◽  
The United States ◽  
Direct Costs ◽  
Full Potential ◽  
Donor Pool ◽  
Number Of Patients

Introduction: The recent increase in non-directed donors (NDDs) in the United States (U.S.) may help reduce the overwhelming number of patients on the waitlist. However, non-directed donation may be limiting its full potential. Out-of-pocket donation costs upward of $8,000 may be a barrier to potential donors with altruistic tendencies, but inadequate financial support. This study aimed to describe the financial concerns of 31 U.S. NDDs. Methods: We conducted qualitative interviews and administered quantitative demographic surveys between April 2013 and April 2015. Interview transcripts were analyzed using grounded theory techniques to describe and expand on themes relevant to the NDD experience. Findings: We identified 4 sub-themes related to the theme of financial concerns: (1) direct costs related to transportation, lodging, and parking, (2) indirect costs of lost wages encountered from taking time off work to recover from surgery, (3) sources of financial support, and (4) suggestions for alleviating donor financial burden. Two thirds of participants (20) expressed concerns about direct and indirect donation costs. 11 NDDs reported the negative impact of direct costs,15 NDDs had concerns about indirect costs; only 7 donors received supplemental financial support from state mandates and transplant programs. Discussion: Understanding the financial concerns of NDDs may guide improvements in the NDD donation experience that could support individuals who are interested in donating but lack the financial stability to donate. Removing financial disincentives may help increase nondirected donation rates, increase the living donor pool, and the number of kidneys available for transplantation.

THE TRANSNATIONAL GOVERNANCE OF BANK RESOLUTION AND THE TREATMENT OF NATIONAL REGULATORY VARIATION IN THE EU

2021 ◽  
Vol 80 (1) ◽  
pp. 74-100
Author(s):  
Andromachi Georgosouli
Keyword(s):  
Financial Stability ◽  
Best Practice ◽  
Eu Law ◽  
Transnational Governance ◽  
Local Conditions ◽  
Implementation Evaluation ◽  
Policy Debates ◽  
Bank Resolution ◽  
Implementation Stage ◽  
The Eu

AbstractThe transnational governance of bank resolution must be well-designed to provide credible solutions to financial crisis management. While at policy level, there is a broad consensus on best practice, the implementation stage often leaves something to be desired. Focusing on the implementation of the relevant Financial Stability Board (FSB) recommendations in the EU, this article explores this issue and proposes certain reforms. It argues for closer EU control and scrutiny over national decision-making without, however advocating a “one-size-fits-all” approach. Its main insight is that the promotion of transnational convergence need not come at the expense of the distinctive attentiveness of EU law to local conditions nor indeed involve a massive shake-up of the existing EU architecture. Its aim is to contribute to scholarly and public policy debates in this field in anticipation of the EU response to the final conclusions of the post-implementation evaluation of the FSB recommendations, which is currently in progress.

Title IV: Resolution

2017 ◽  
Author(s):  
Gabriel Moss QC ◽  
Bob Wessels ◽  
Matthias Haentjens
Keyword(s):  
Public Interest ◽  
General Public ◽  
Bank Failures ◽  
Insolvency Law ◽  
Bank Resolution ◽  
Title Iv ◽  
Responsibility Of Government

Title IV of the Bank Recovery and Resolution Directive (BRRD) concerns resolution. If ‘conditions for resolution’ are met, resolution authorities may place any entity covered by BRRD under resolution, apply the resolution tools, and exercise the resolution powers. ‘Resolution’ is often contrasted with ‘insolvency’. Resolution is a specialized regime for bank failures, and its objectives are fundamentally different from the objectives of normal insolvency law. The resolution regime has general public interest as its main, most abstract goal, whereas the insolvency regime traditionally aims at maximizing creditor value. For these reasons, resolution management is the responsibility of government authorities rather than courts. Nonetheless, insolvency law remains of essential importance to bank resolution rules. Not only will (national) insolvency law remain critical for the interpretation and application of the BRRD’s bank resolution rules such as the ‘No Creditor Worse Off’ rule (see below at paras 7.102–7.104), but insolvency law will also remain applicable to bank failures where specific bank resolution rules do not apply.

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