Bank recovery and resolution : a conference book / Matthias Haentjens and Bob Wessels (eds.).
2014
KJE2188.A8 B362 2014 (Map It)
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Details
Title
Bank recovery and resolution : a conference book / Matthias Haentjens and Bob Wessels (eds.).
Published
The Hague, The Netherlands : Eleven International Publishing, [2014]
Copyright
©2014
Call Number
KJE2188.A8 B362 2014
ISBN
9789462364080
9462364087
9789462740334 (E-book)
9462364087
9789462740334 (E-book)
Description
xviii, 235 pages : illustrations ; 24 cm.
System Control No.
(OCoLC)875742658
Bibliography, etc. Note
Includes bibliographical references.
Record Appears in
Added Author
Table of Contents
Notes on contributors
xiii
pt. 1
Introduction
1.
Work of International Organizations on Bank Recovery and Resolution: an Overview / Matthias Haentjens
3
1.
Introduction
3
1.1.
The earliest history of bank insolvencies
3
1.2.
Background of recent legislative initiatives
5
1.3.
Theme of today's conference
8
2.
Territorial
8
2.1.
General
8
2.2.
Global
8
2.2.1.
FSF/FSB
9
2.2.2.
Basel Committee on Banking Supervision (BIS)
10
2.2.3.
IMF
11
2.2.4.
UNCITRAL
11
2.3.
Regional
12
2.3.1.
Eu
12
2.3.2.
United States
12
2.4.
National
13
2.4.1.
United Kingdom
13
2.4.2.
Germany
13
2.4.3.
Spain
13
2.4.4.
The Netherlands
14
3.
Thematic
14
3.1.
General
14
3.2.
Scope
14
3.2.1.
Insurance companies
15
3.2.2.
Financial Market Infrastructures
15
3.2.3.
Securities and investment firms
15
3.3.
Recovery and resolution plans
16
3.4.
Bail-in
17
3.5.
Counterparties/contractual early termination
18
3.6.
Cooperation/cross-border groups
19
3.7.
Rule of law
20
4.
Conclusion
21
5.
Chronological overview
21
pt. 2
Recovery Plans
2.
Bank Recovery Plans: Strengths and Weaknesses -- How to Make a Boiling Banker Frog Jump / Anthon Verweij
25
1.
General introduction
25
2.
Early warning and recovery plans in other industries
27
2.1.
Recovery plans: early warning
28
2.2.
Recovery plans: turnaround process
29
2.3.
Recovery plans: content
30
3.
Characteristics of banks and the banking industry
32
4.
EU Directive on the Recovery and Resolution of Credit Institutions and Investment Firms
35
5.
Recovery plans: triggers, concepts, criteria, strengths and weaknesses
38
6.
Conclusions
44
3.
Bank Failure and Pre-emptive Planning / Stephan Madaus
49
1.
Introduction
49
2.
The special purpose of a bank resolution regime
49
2.1.
`Too big to fail'
50
2.1.1.
Special requirements in a bank failure scenario
51
2.1.2.
The shortcomings of insolvency proceedings in bank failure
52
3.
The proposed EU bank resolution mechanism
54
3.1.
The scope: financial institutions
54
3.2.
The decision: made by resolution authorities
54
3.2.1.
Reasons for a `dictated' resolution plan
55
3.2.2.
The indispensable involvement of courts
56
3.3.
Decision content: pre-packaged
58
3.3.1.
(Pre-packaged) resolution plans
58
3.3.1.1.
Right to set up a plan
59
3.3.1.2.
Duties to report
59
3.3.1.3.
Resolution planning and the core issue of resolvability
60
3.3.1.4.
Resolution tools
61
3.3.1.4.1.
Sale of business (and asset separation)
61
3.3.1.4.2.
Bridge institution (and asset separation)
61
3.3.1.4.3.
Who shall wind up a failing bank's business and assets?
62
3.3.1.4.4.
The bail-in tool -- reorganization efforts in a bank failure regime?
63
3.3.1.5.
Implementing a resolution plan
65
3.3.2.
Side-effect: recovery plans
65
4.
Early intervention by supervisors and recovery plans
66
4.1.
When should a supervisor intervene?
66
4.2.
What may a supervisor do?
66
5.
Addressing banking groups
68
5.1.
Group recovery plans and group financial support agreement
68
5.2.
Group resolution plans
69
6.
Evaluation
70
7.
Outlining a `default resolution option'
71
7.1.
Resolution planning and resolvability
71
7.2.
Resolution of a failing financial institution
72
7.3.
Post-failure activities
73
8.
Conclusion
74
pt. 3
Rule of Law v. Authorities Discretion
4.
Does the Directive on the Recovery and Resolution of Credit Institutions Provide Sufficient Fundamental Rights Protection? / Alexander Schild
77
1.
Introduction
77
2.
The right to the peaceful enjoyment of property
78
2.1.
Principle of lawfulness
79
2.2.
Principle of a legitimate aim
79
2.3.
Principle of fair balance
80
3.
Safeguards under the RRD
83
3.1.
Safeguards for counterparties in partial transfers
83
3.2.
Safeguards for the bridge institution and the asset separation-tool
84
3.3.
Safeguards for the bail-in instrument
84
4.
The right to an effective remedy
85
5.
Conclusion
85
5.
Resolution Regimes for Financial Institutions and the Rule of Law / Alexander Bornemann
87
1.
Rule of law issues relating to resolution regimes for financial institutions
87
1.1.
Role and functions of resolution regimes
87
1.2.
Illustration: debate over constitutionality of the `orderly liquidation authority' under the U.S. Dodd-Frank Act
88
1.3.
The European perspective
89
1.3.1.
Proposal for a recovery and resolution directive
89
1.3.2.
Rule of law in EU law
90
1.3.3.
Instantiations of the rule of law in the fundamental rights guaranteed under the Charter
93
1.4.
Rule of law issues -- overview
94
2.
Principle of legality
95
2.1.
Vagueness and margins of assessment in the context of systemic risk tests
97
2.2.
Use of and choice between specific resolution tools and powers
102
3.
Right to good administration and the due process of law
104
4.
Right to effective remedy and fair trial
105
4.1.
Scope and standard of judicial review
106
4.2.
Prohibition against a reversal of the decision's legal consequences
109
5.
Conclusions
110
pt. 4
Treatment of Cross-Border Groups
6.
Federal Deposit Insurance Corporation and Bank of England Memorandum on Resolving Globally Active Systemically Important Financial Institutions / Paul Davies
115
1.
Introduction
115
2.
General approach
117
3.
US and UK approaches: functional but not formal convergence
118
4.
Common Issues
123
5.
Conclusion
126
7.
Resolution of Cross-Border Groups -- According to the Proposal for a Directive Establishing a Framework for the Recovery and Resolution of Credit Institutions and Investment Firms / Giulia Vallar
131
1.
Introduction
131
1.1.
The path towards a discipline of insolvent cross-border groups in the proposal for a directive establishing a framework for the recovery and resolution of credit institutions and investment firms
131
2.
Analysis of the relevant provisions contained in the Proposal
133
2.1.
Group resolution plans (Articles 11 and 12)
133
2.2.
Assessment and removal of impediments to resolution (Article 15)
135
2.3.
Resolution colleges (Article 80)
136
2.4.
European resolution colleges (Article 81)
139
2.5.
Information exchange (Article 82)
140
2.6.
Group resolution (Article 83)
140
2.7.
Financing of group resolution (Article 98)
141
2.8.
Groups established in both EU and non-EU countries: cooperation in resolution among authorities (Articles 84, 88 and 89)
142
3.
Comments and observations
144
3.1.
A three-step itinerary to resolution
144
3.2.
What impact do structure and nature of the exercised activity have on the content of provisions governing resolution?
145
3.3.
Other recent international initiatives dealing with insolvency of cross-border financial groups
146
4.
Concluding remarks
147
pt. 5
Bail-in and Counterparties
8.
Bail-in: Some Fundamental Questions / Victor de Seriere
153
1.
Introduction
153
2.
Relationship between bail-in and other resolution tools
154
3.
Collective responsibility of the banking sector?
155
4.
Liquidity versus solvency
156
5.
Collective responsibility for shareholders and creditors
157
6.
Why loss absorption?
159
7.
Volcker Rule impact
161
8.
The positioning of the bail-in tool in terms of timing
162
9.
The `no creditor worse off' (NCWO) principle
163
10.
Using the insolvency ladder principle
166
11.
Insured deposit holders
168
12.
Suppliers
169
13.
Derivatives
171
14.
Senior bondholders
173
15.
Contractual bail-in versus statutory bail-in
175
16.
Covered bonds and other secured liabilities
175
17.
Set-off
177
18.
Valuation
177
19.
Conclusion
178
9.
Resolution Tools and Derivatives / Francisco Garcimartin
181
1.
Introduction
181
2.
Bail-in: eligible liabilities
182
2.1.
Introduction
182
2.2.
Scope: eligible liabilities
183
2.3.
Cross-border dimension
184
3.
Derivatives
186
3.1.
Derivatives as eligible obligations
186
3.2.
How does the bail-in tool apply to derivatives?
187
4.
Other issues: suspension of termination rights and transfer to another entity
189
4.1.
Suspension and termination rights
189
4.2.
Cross-border aspects
192
4.3.
Transfer to a bridge bank
193
pt. 6
Reports on Workshops
10.
Report on Workshop 1: Recovery Plans / Anthon Verweij
197
1.
Recovery planning
197
2.
Resolution planning
200
3.
Discussion
203
11.
Report on Workshop 2: Rule of Law v. Authorities Discretion / Xinyi Gong
209
1.
Resolution regimes for financial institutions and the rule of law
209
1.1.
The relevance of the rule of law
209
1.2.
Problems incurred by resolution regimes
210
1.2.1.
Margins of assessment in the context of systemic risk tests
210
1.2.2.
Use of specific resolution tools and powers
210
1.2.2.1.
Solutions
211
2.
Does the directive on the recovery and resolution of credit institutions provide sufficient fundamental rights protection?
212
2.1.
Introduction
212
2.2.
The three requirements
212
2.2.1.
Principle of lawfulness
212
2.2.2.
Principle of a legitimate aim
212
2.2.3.
Principle of fair balance
213
2.3.
The Northern Rock case
213
3.
Conclusion
214
4.
Discussion
214
12.
Report on Workshop 3: Treatment of Cross-Border Groups / Valentina Caria
215
1.
Introduction
215
2.
The multiple point of entry strategy
215
3.
The single point of entry strategy
217
4.
Conclusion
219
13.
Report on Workshop 4: Bail-in and Counterparties / Olga Falgueras del Alamo
221
1.
Bail-in: some fundamental questions
221
2.
Bail-in powers and derivatives
223
pt. 7
Report on Forum
14.
Conference Discussion Report: Valuation and Depositor Preference / Mark van der Veer
229
Verschenen publicaties in deze reeks
235