Bank Restructuring and Bank Distress or Failure Research Papers (original) (raw)

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- Business, Directive
- by Mathias Hanten
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- Buch, True, DDC
- by Ronny Mazzocchi
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- Law, Economics, Banking Regulation, Finance and Investment Banking
- by Ching-Hui Hsieh
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- Business, Finance, Nanotechnology, Decision Tree
- by Fabio Forgione
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- Business, Finance, Economics, Financial Economics
- by Christoph Paulus
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- Political Science, German
- by Marcello Clarich
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- Business, German
- by Rodrigo Olivares-Caminal
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- Business, Law, Systemic Risk, Creditor

The Basel Committee sets capital standards for international banks. There are now three vintages of these standards: so-called Basel I dating from 1988, Basel II dating from around 2004 and Basel III which was agreed at the end of last year. 1 These international capital standards are supported by three pillars. Pillar I defines the regulatory rules, Pillar II provides scope for supervisory discretion, while Pillar III seeks to foster market discipline through disclosure. In countering systemic shocks, three supporting pillars have understandably been felt to be better than one. But the success of international capital standards in forestalling banking distress has been mixed. Basel I regulatory rules were arbitraged due to their risk insensitivity. This gave rise to Basel II with its greater focus on risk calibration. But Basel II buckled under the weight of the recent crisis. Repairs have since been applied through Basel III. Historical experience suggests this is unlikely to be t...

- by Priya Kothari
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- by Elisabetta GUALANDRI and +1
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- Business, Accounting, Corporate Governance, Financial Crisis
- by Ly Nguyễn
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- Business, Finance, Law, Corporate Governance
- by Robert Lempert
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- Political Science, RAND Corporation
- by Stefan Handke
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The financial market crisis put the spotlight on the performance of two main German government bodies in financial market policy, the German Ministry of Finance (BMF) and the German Supervisory Authority (BaFin). The problem of delegation between the BMF as the principal of the agent BaFin is the focus of this article. During the crisis a lack of personnel in the BMF and the structural asymmetry between BaFin and the ministry caused problems in the formulation of crisis policies and in the handling of the subordinate authority. However, the crisis showed only the tip of an iceberg, because the BMF suffers from fundamental deficits in coping with the daily business of financial market policy and the control of an agency which gained more autonomy than politically intended. The overarching question is whether the BMF or BaFin controls German financial market policy.

- by Stefan Handke
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- Political Science, Delegation, Agency, Public Policy and Administration
- by Ly Nguyễn
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- Finance, Law, Corporate Governance, Banking Regulation
- by Scott Pryor
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- Political Science, Social Science Research Network
- by Scott Pryor
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- Political Science, Social Science Research Network

Banks around the world maintain excess regulatory capital, whether to minimize capitalization costs or to mitigate risks of financial difficulties. However, it was only after the financial crisis of 2008 that the quality of capital gained greater importance among international regulators, through the Third Basel Accord (Basel III), which suggested a capital structure formed of the new equity and debt hybrid instruments, that is, Contingent Convertibles (CoCos), which have the main goal of recapitalizing banks automatically when they show signs of financial difficulties. Using the continuous-time structural model developed by Koziol and Lawrenz (2012), with December 2013 as a reference, this paper analyzes the capital structure of the 10 biggest Brazilian banks in terms of total assets, comparing their current structures - with only subordinated debts - with the structure proposed in Basel III, composed solely of contingent convertibles, with a view to verifying the influence of CoCo...

- by Karina Goes
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- by Jan Barend Jansen
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- Business

When the Banking Act was brought into force in early 2009, it legitimised governmental power to interfere in the market-economy as well as providing a transparency of proceduralisation. The Act confers three bodies-the FSA, the Treasury and the Bank of England-with a power called the special resolution regime (SRR) to deal with the troubled banking industry. The special resolution regime provides a means to correct systemic risk in banking. The Act provides stablisation powers that consist of a transfer to the private sector, bridge banks and public ownership. The regulatory objectives are similar to those found in the Financial Services and Markets Act 2000, but with an additional attention to property rights under human rights.It adds the new banking insolvency and banking administration respectively to the existing Insolvency Act 1986. The exercise of such power recognises potential infringement of property rights in relation to property transfer. The statutory power argubly re-s...

- by Mark Hsiao
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- Right

The Covid 19 pandemic befell the world and Indonesia was no exception. This pandemic affects not only health but also socio-economic. When the economy is hit then the banking sector is also hit. This study attempts to look at the effects of the Covid 19 pandemic and compare it with the 1998 monetary crisis. By comparing these two crises we can see the differences and similarities of the current crisis. But the most important thing is how regulators and banking can draw lessons from the 1998 crisis to be applied to the current crisis. This research is applicative research that is by applying the existing framework to a new situation. The framework used in this study is a seven-tier system in managing bank assets and liabilities. From the results of this study can be seen the fundamental differences between the crisis of Pandemic Covid 19 and the monetary crisis of 1998. This study concludes that the banking conditions in Indonesia are currently more resistant to crisis. However, gove...

- by Pandu Cakranegara
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- by Jessica Schmidt
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- Political Science

The aim of this article is to analyse the legal capital doctrine in the European Union with a comparative method of analysis. Slovak legal system represented by the Slovak Commercial Code served us as the traditional model of the capital doctrine in the European Union. On the other hand, Finland and its Finnish Limited Liability Companies Act served us a model jurisdiction for enlightened model of the capital doctrine in the European Union. The analysis was conducted on the public limited liability companies, as the scope of the Capital Directive covers only this type of company. The main aim of the article was to analyse the specificities of the Finnish capital system which introduced the capital system with shares without nominal value through the company law reform in 2006. Moreover, the article deals with inconsistencies in the Slovak legal system caused by the inexact transposition of the Capital Directive into the Slovak Commercial Code.

- by Barbora Czókolyová
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La crisi dell impresa bancaria è tradizionalmente ritenuta meritevole di par- ticolare attenzione da parte del legislatore, in quanto può finire per esporre non solo coloro che sono direttamente in relazione con la banca in difficoltà, ma anche l intero sistema economico-finanziario in cui quest ultima opera al rischio di ripercussioni così gravi da determinare perdite insostenibili. L ultimo decennio ha messo a dura prova la capacità di molte economie di reggere le conseguenze finanziarie di una delle più grandi insolvenze della storia recente e, cioè, della crisi che emerse alla metà del settembre 2008 in capo al gruppo bancario-finanziario Lehman Brothers. Proprio in considera- zione delle difficoltà nel contenere quelle conseguenze, non soltanto a livello microe- conomico ma anche a quello macroeconomico, i governi di molti paesi così come le principali istituzioni con responsabilità di disciplina dei mercati finanziari hanno in seguito compiuto una pluralità di interventi sulla regolamentazione. Uno dei problemi fondamentali è stato individuato nell attitudine della crisi di un intermediario — se non già della sua insolvenza — ad essere trasmessa ad altri, tramutando anche rapidamente una difficoltà individuale in crisi di sistema. Nel quadro così sintetizzato, che ha registrato non solo l insolvenza di grandi gruppi bancario-finanziari privati (3), ma anche la crisi di ccdd. debitori sovrani, plurimi sono stati gli interventi nel triennio 2008-2010 per salvare attività bancarie e/o assicu- rative, evitare danni o indennizzare clienti e risparmiatori di queste, proteggere — più in generale — economie di intere aree geografiche dalla comunicazione delle difficoltà anche ad altri settori merceologici. La disciplina delle crisi bancarie è stato ritenuto che meritasse deviazioni dai modelli di trattamento delle insolvenze e delle pre-insolvenze delle altre imprese anche quando la dimensione dell impresa in dissesto (o prossima a questo) fosse minore. I contenziosi decisi dal Tribunale di Milano e dall Arbitro per le Controversie Finanziarie, che scaturirono dalle pretese avanzate da numerosi azionisti, ne sono un esempio degno di discussione poiché le decisioni assunte da chi ha giudicato presentano taluni profili di criticità

- by Kotaro Inoue
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- Applied Mathematics, Corporate Governance, Fundamental Solution, Banking finance
- by Dirk Schoenmaker
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- Business
- by Marc Dobler
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- Intervention, Bank Runs, Financial Risk, Capital Adequacy Ratio
- by Marc Dobler
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- by Guido Ferrarini
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- Corporate Governance

The Eurozone needs a bank resolution regime that can work across seventeen independent nations of diverse sizes with varying levels of financial development, limited fiscal co-responsibility, and with systemic instability induced by quick and low-cost deposit transfers across borders. We advocate a Coasean approach to bank resolution policy in the Eurozone, which emphasises clear and consistent contracts and makes explicit the public ownership of the externality costs of bank distress. A variety of resolution mechanisms are compared including bank debt holder bail-in, prompt corrective action, and contingent convertible bonds. We argue that the “dilute-in” of bank debt holders via contingent convertibility provides a clearer and simpler Coasean bargain for the Eurozone than the more conventional alternatives of debt holder bail-in or prompt corrective action.

- by Brian Okelly
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- by Jiri Podpiera
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- by Rafael Schiozer
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- Business Administration, Finance
- by Dwinita Aryani
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- by Stijn Claessens
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- by Ruth Neyens
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- by Wulf Kaal
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- Comparative Law, Risk Taking, Cost benefit
- by Wulf Kaal
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- Corporate Governance, Executive Compensation

Abstract: The uncoordinated reorganization and resolution of Systemically Important Financial Institutions in different countries pose many challenges. Contingent capital provides a viable alternative for the efficient restructuring and resolution of failing financial institutions. Contingent Capital provides a mechanism for internalizing banks ‚Äô failure costs and helps return distressed financial institutions to solvency. This article offers a comparative perspective on bank resolution and restructuring in the European Union, ...

- by Wulf Kaal
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- International Law, Corporate Governance, Banking, Corporate Finance

The collapse in the market for exotic financial instruments, the liquidity crisis in major financial institutions, and the government bailouts in 2008 and 2009 illustrate the massive social cost of financial risk taking. In 2007, the market experienced record downgrades in mortgage-backed securities, including Collateralized Debt Obligations (CDOs). Other complex debt securities fueled unprecedented bank write-downs." Some AAA rated debt lost all its value."'January 2008 was the worst month for CDOs in more than 10 years with ...

- by Wulf Kaal
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- Comparative Law, Risk Taking, Cost benefit

The Liikanen Group proposes contingent convertible (CoCo) bonds as a potential mechanism to enhance financial stability in the banking industry. Especially life insurance companies could serve as CoCo bond holders, as they are already the largest purchasers of bank bonds in Europe. We develop a stylised model with a direct financial connection between banking and insurance and study the effects of various types of bonds such as non-convertible bonds, write-down bonds and CoCos on banks' and insurers' risk situations. In addition, we compare insurers' capital requirements under the proposed Solvency II standard model as well as under an internal model that ex ante anticipates additional risks due to possible conversion of the CoCo bond into bank shares. In order to check the robustness of our findings, we consider different CoCo designs (write-down factor, trigger value, holding time of bank shares) and compare the resulting capital requirements with those for holding non-convertible bonds. We identify situations in which insurers benefit from buying CoCo bonds due to lower capital requirements and higher coupon rates. Furthermore, our results highlight how the Solvency II standard model can mislead insurers in their CoCo investment decision due to economically irrational incentives.

- by susu suhao
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- by Mehmet Osman Gülyesil
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- by Guonan Ma
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- East Asia, Case Study, Asset Management
- by Sippa Mu
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- by Cindy Schipani
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- Corporate Governance
- by Cindy Schipani and +1
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- Law, Corporate Governance
- by Ronald Sverdlove
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- Debt

L'impatto del bail-in sui sistemi di tutela degli investitori. Dalla trasparenza all'accudimento dell'investitore. Bond bancari e PRIIPs

- by vittorio santoro
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- Bail-in