Part I Elements of Bank Resolution Regimes, 2 Bank Resolution Techniques

2016 ◽  
Author(s):  
Gleeson Simon ◽  
Guynn Randall
Keyword(s):  
Bank Failure ◽  
Residual Value ◽  
Bank Resolution ◽  
Unsecured Debt ◽  
Commercial Company ◽  
Commercial World ◽  
Collective Benefit ◽  
Bail Out ◽  
Case Basis

This chapter discusses the available ‘toolkits’—or mechanisms—for resolving all types of banks and their affiliates, with the caveat that such tools can only be implemented on a case-by-case basis. In order to demonstrate the coverage of these methods, the hierarchy of approaches to bank failure is as follows: sale of the business by the purchase of assets and the assumption of liabilities (i.e. a purchase and assumption transaction), write-down or conversion of long-term unsecured debt into equity (bail-in), liquidation, and state aid (bail-out). Additionally, the normal state of resolution for a business in the commercial world is a restructuring in which creditors consent to a variation in their rights in order to maximize the residual value of an insolvent commercial company for the collective benefit of all its stakeholders and preserve its critical operations for the benefit of the broader market—a method that should be adapted for use in the banking industry.

Part I Elements of Bank Resolution Regimes, 4 Total Loss Absorbing Capacity

2016 ◽  
Author(s):  
Gleeson Simon ◽  
Guynn Randall
Keyword(s):  
Financial Stability ◽  
Total Loss ◽  
Going Concern ◽  
Bank Resolution ◽  
Unsecured Debt ◽  
Resolution Strategies

This chapter discusses the need for a sufficient amount of properly structured long-term unsecured debt and other forms of total loss absorbing capacity (TLAC) in order to make SPE and other resolution strategies operationally feasible. In particular, the chapter summarizes the internal TLAC standard recently finalized by the Financial Stability Board. TLAC is defined as the sum of (1) common equity and other forms of going concern capital and (2) long-term unsecured debt and other forms of gone-concern loss absorbing capacity (GLAC).

Part I Elements of Bank Resolution Regimes, 1 Introduction

2016 ◽  
Author(s):  
Gleeson Simon ◽  
Guynn Randall
Keyword(s):  
Capital Structure ◽  
The Other ◽  
Short Term ◽  
Important Distinction ◽  
Bank Resolution ◽  
Unsecured Debt ◽  
Corporate Insolvency ◽  
The One

The introduction discusses why dealing with insolvent banks is fundamentally different from dealing with insolvent commercial companies. In ordinary corporate insolvency practice, commercial companies can be allowed to continue to operate while insolvent, by suspending payments on their financial liabilities while continuing to make payments on their commercial liabilities. This allows them to be reorganized or recapitalized rather than liquidated, which almost always results in better recoveries for their creditors, including their financial creditors. The problem in applying this model to a bank is that with a bank there is no meaningful distinction between financial and commercial liabilities. Virtually all bank liabilities are financial liabilities. Instead, the important distinction for banks is between long-term unsecured debt and other capital structure liabilities on the one hand, and short-term unsecured debt and other operating liabilities on the other. Banks can be allowed to continue operating after they reach the point of insolvency if their capital structure liabilities are made subordinate to their operating liabilities in advance. If that has been done, payments on their capital structure liabilities can be suspended while payments on their operating liabilities continue to be made after they reach the point of insolvency and they can be recapitalized (made solvent again) by converting their long-term unsecured debt into equity. This approach should stem runs, avoid contagion and preserve their critical operations for the benefit of the economy as a whole, and also result in better recoveries for all creditors, including the holders of their capital structure liabilities, compared to an immediate liquidation.

scholarly journals Changes in bank resolution mechanism: opportunity for change in bank governance towards stakeholder approach

2013 ◽  
Vol 11 (4) ◽  
pp. 800-805
Author(s):  
Živa Skok Jezernik
Keyword(s):  
Recent Change ◽  
Central Function ◽  
Bank Resolution ◽  
Bank Governance ◽  
Current Financial Crisis ◽  
Substantial Change ◽  
Excessive Risk Taking ◽  
Bail Out ◽  
The Eu

The current financial crisis has vividly demonstrated that due to the incentives of bank shareholders to take excessive risks on behalf of other stakeholders and society, banking governance based exclusively on shareholder interests results in systemically fragile banks and financial instability. The key challenge is to establish a bank governance framework in which financial institutions begin to perform their central function of serving and supporting long-term economic development. The recent change in the bank resolution mechanism legislation for banks in the EU from a bail-out to a bail-in approach that creates a new group of bank stakeholders with strong incentives to oppose excessive risk-taking – uninsured debtholders – can be seen as an opportunity to enact substantial change in bank governance.

The Role of Ecopedological Parameters in Management Sustainability of Banat Lands

2018 ◽  
Vol 69 (3) ◽  
pp. 688-692
Author(s):  
Lucian Nita ◽  
Dorin Tarau ◽  
Gheorghe Rogobete ◽  
Simona Nita ◽  
Radu Bertici ◽  
...  
Keyword(s):  
Plant Nutrition ◽  
Physical State ◽  
Agricultural Land ◽  
Soil Characteristics ◽  
South West ◽  
Short And Long Term ◽  
Laboratory Investigations ◽  
Case Basis

The issue addressed relates to an area of 1891694 ha of which 1183343 ha are agricultural land (62, 56) located in the south-west of Romania and refer to the use of soil chemical and physical properties as an acceptor for certain crop systems, with minimal undesirable effects both for plants to be grown, as well as soil characteristics and groundwater surface quality. It is therefore necessary on a case-by-case basis, measure stoc or rect the acidic reaction by periodic or alkaline calculations, the improvement of plant nutrition conditions through ameliorative fertilization and the application of measures to improve the physical state, sufficient justification for the need to develop short and long term strategies for the protection and conservation of edifying factors and the need to respect the frequency of field and laboratory investigations at all 8x8 km grids of the National Soil-Grounds Monitoring System (organized by I.C.P.A.) and completing it with the relevant pedological and agrochemical studies.

Part I Elements of Bank Resolution Regimes, 3 Bank Resolution and Bank Groups

2016 ◽  
Author(s):  
Gleeson Simon ◽  
Guynn Randall
Keyword(s):  
Single Point ◽  
False Consciousness ◽  
Residual Value ◽  
Too Big To Fail ◽  
Holding Company ◽  
Point Of Entry ◽  
Bank Resolution ◽  
Promising Solution ◽  
Financial Regulatory ◽  
Legal Entities

This chapter looks at how the structure of bank groups is factored into the resolution process. In analysing the resolution of banks and other legal entities, a focus on the legal entities alone is a form of false consciousness. Instead, the focus needs to be on resolving the overall financial enterprise of which the bank is a part. By focusing on resolving groups instead of individual legal entities, financial regulatory authorities around the world have developed the single-point-of-entry (SPE) resolution strategy, which has been widely accepted as the most promising solution to the too-big-to-fail problem. When applied to a banking group with a holding company at the top and operating subsidiaries at the bottom, only the top-tier holding company would be put into a bankruptcy or resolution proceeding. The holding company’s assets would then be used to recapitalize the operating subsidiaries, perhaps pursuant to secured capital contribution agreements, and keep them out of their own insolvency or resolution proceedings. The recapitalized group would then be stabilized and its residual value distributed to the failed holding company's stakeholders in satisfaction of their claims.

scholarly journals QUESTIONS OF RECOGNITION AND DEPRECIATION OF OBJECTS OF ACCOUNTING IN THE FIELD OF LAND RELATIONS

2018 ◽  
Vol 8 (39) ◽  
pp. 35-49
Author(s):  
Alexander Petruk ◽  
Sergey Legenchuk ◽  
Tetyana Ostapchuk ◽  
Oksana Novak
Keyword(s):  
Production Method ◽  
Capital Expenditures ◽  
Residual Value ◽  
Line Method ◽  
Straight Line ◽  
Land Relations ◽  
The Right ◽  
Land Improvement ◽  
Straight Line Method

Recognition of criteria for all assets of an enterprise based on the study of normative and methodological documents were investigated and summarized in this article. The approaches to the criteria for recognition and depreciation of such objects of long-term assets as capital expenditures on land improvement and land use rights are explored. The depreciation charge for capital expenditures on land improvement should be carried out using the straight-line method, the method of reducing the residual value or cumulative, since the tax law does not use the method of accelerated reduction of residual value, and it is inappropriate to apply the production method of depreciation. Using the method of reducing the residual value or cumulative, will allow in the shortest possible time to accumulate depreciation deductions, keeping them from inflation depreciation. The straight-line method should be applied for the right to use a land plot because it is possible for use for the objects that were recognized as intangible assets. In accounting for monitoring the formation and use of depreciation deductions for reproduction of the above-mentioned objects of long-term assets, it is recommended for the calculation of the amounts to collect the required settlement information on accounts using the MS Excel table processor. The practical application of this table processor will simplify the calculation and promptness of providing information to investors, shareholders and others, and it will enable them to strategically approach the formation of depreciation policy of the enterprise.

scholarly journals How to Bail Out a Defense Contractor: Cases on Securing a Supply Chain in extremis

2021 ◽  
Vol 28 (96) ◽  
pp. 166-189
Author(s):  
James Hasik
Keyword(s):  
Supply Chain ◽  
Supplier Management ◽  
Short Term ◽  
Defense Contractors ◽  
The Past ◽  
Defense Contractor ◽  
Necessary And Sufficient ◽  
Industry Structures ◽  
Bail Out

How can governments effectively bail out faltering defense contractors? While the idea may seem politically distasteful, any defense ministry with domestic suppliers may view the problem as supplier management in extremis. Reviewing nine prominent bailouts of defense contractors from the past 50 years, the author draws two conclusions. Providing long-term demand is very likely necessary and sufficient to maintain industry structures. Providing short-term infusions of cash may be necessary to maintain programs, but it is not always sufficient. If legislators and defense officials wish to consider either approach for short-term or long-term objectives, they should also consider the historical lessons of the financial and information asymmetries between government and industry, and the general uncertainty over how technologies will evolve.

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