Bad assets options and bank resolution in Europe

2015 ◽  
Vol 16 (5) ◽  
pp. 486-497 ◽  
Author(s):  
Karsten Paetzmann
Keyword(s):  
Financial Crisis ◽  
Study Data ◽  
Banking Union ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Reduction Strategies ◽  
The 2008 Financial Crisis ◽  
Bad Assets ◽  
Case Study Data

Purpose – This paper analyzes the new EU Bank Recovery and Resolution Directive (BRRD) to determine the level of guidance on instruments to wind-down bad asset portfolios of asset management vehicles. In the absence of such detailed guidance stipulated by the BRRD, the aim is to provide certain practical guidance to future resolution planning and execution. Design/methodology/approach – This paper draws upon experience from portfolio reduction strategies applied at European bad banks in the aftermath of the 2008 financial crisis. For illustration purposes, the paper use case study data from a bad bank located in the eurozone. Findings – For the new European Commission, implementation and enforcement of the Banking Union within the eurozone is currently a key priority. Present efforts are mainly directed towards minimum technical standards. However, the fundamental question of how to orderly unwind a bad assets portfolio without the usage of public funds remains partly addressed only. While a uniform approach to any bad asset does not seem to be applicable, certain lessons learned from previous financial crises may contribute to a selection of reduction strategies. Research limitations/implications – This paper draws upon experience from portfolio reduction strategies applied at European bad banks in the aftermath of the 2008 financial crisis. It includes case study data from the wind-down of a eurozone bad bank detailing the asset reduction strategies achieved so far. Such per asset class wind-down patterns have not been published and commented on in academia so far.

The role of customers and employees in the buffer effect of corporate social responsibility in times of crisis

2020 ◽  
Vol 46 (7) ◽  
pp. 955-975 ◽  
Author(s):  
Dorra Ellouze
Keyword(s):  
Financial Crisis ◽  
Negative Impact ◽  
Employee Productivity ◽  
Negative Events ◽  
Buffer Effect ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Cooperative Relationships ◽  
The 2008 Financial Crisis

PurposeThe purpose of the paper is to investigate the role of customers and employees in the buffer effect of CSR around the 2008 financial crisis in the European context.Design/methodology/approachUsing a sample of 323 European firms listed in STOXX Europe 600 Index, different models are estimated to test whether the effect of CSR ratings on firms' relationships with their customers and employees could be different during the 2008 financial crisis relative to the pre-crisis and post-crisis periods.FindingsThe paper shows that CSR rating has a significantly negative impact on firms' accounts receivable and a significantly positive effect on employee productivity during the crisis period (from 2007 to 2009). However, there is no significant effect of CSR rating during the non-crisis periods. These results suggest that during negative events, customers are willing to continue supporting high-CSR firms by paying their invoices faster. Furthermore, these firms benefit from higher productivity of their employees who are willing to work harder in periods of uncertainty.Research limitations/implicationsFirms should invest in CSR practices to maintain strong and cooperative relationships with their customers and employees. Also, investors should choose firms engaging in more social capital. Moreover, policymakers should encourage implementing CSR practices which act as an insurance-like protection in times of negative events.Originality/valueThis paper adds to the previous studies by investigating whether the cooperative role of customers and employees can explain the buffer role of CSR around the crisis. Furthermore, it considers companies located in several European countries for a long period (from 2004 to 2012) to compare periods of crisis and non-crisis.

Managing paradoxes, dilemmas, and change

2018 ◽  
Vol 25 (2) ◽  
pp. 257-275 ◽  
Author(s):  
Rubens Pauluzzo ◽  
Marta Guarda ◽  
Laura De Pretto ◽  
Tony Fang
Keyword(s):  
Multinational Corporation ◽  
Design Methodology ◽  
Qualitative Case Study ◽  
Study Data ◽  
Value Orientations ◽  
Cultural Learning ◽  
Content Type ◽  
Yin Yang ◽  
Case Study Data

Purpose Drawing on Fang’s (2012) Yin Yang theory of culture while taking up the roadmap proposed by Li (2016) for applying the epistemological system of Yin Yang balancing to complex issues in management research, in general, and to paradoxical issues, in particular, the purpose of this paper is to explore how organizations and individuals in the West can balance cultural paradoxes and manage culture dilemmas through the lens of Yin Yang wisdom. Design/methodology/approach The paper is based on a qualitative case study. Data are gathered through interviews, documents, and field observations in four subsidiaries of an Italian insurance multinational corporation and were analyzed according to the three parameters, i.e., situation, context, and time (Fang, 2012). Findings The findings show how the integration and learning from seemingly opposite cultures and sets of values lead the organization and individuals to balancing cultural paradox and managing cultural dilemma effectively. With regard to situation, the authors find that both organizations and customers choose the most relevant value(s) to take advantage of specific events or circumstances, and that different value orientations can coexist. As for context, the authors show that organizations can adapt their values either through suppression and/or promotion, which can foster individuals to find new balancing within the paradox. In terms of time, the authors show that the process of learning from other cultures over time can play a role in the shift of people’s and organizations’ choices of attitudes and value orientations. Originality/value The paper suggests the relevance and usefulness of adopting Yin Yang wisdom to uncover the dynamic process of cultural learning in Western scenarios.

Governmental management by trust communication: German organizational rhetoric in the 2008 financial crisis

2015 ◽  
Vol 23 (1) ◽  
pp. 33-45
Author(s):  
Jan C. L. König ◽  
Klaus-Peter Wiedmann
Keyword(s):  
Financial Crisis ◽  
Quantitative Research ◽  
Organizational Rhetoric ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Rhetorical Action ◽  
The 2008 Financial Crisis ◽  
The Government ◽  
Governmental Management ◽  
Practical Implications

Purpose – The purpose of the authors of this paper is to observe the German Government’s rhetorical communication measurements during the 2008 financial crisis. Design/methodology/approach – The authors compiled approaches of organizational rhetoric and pragma-linguistics first to offer a consistent concept and method for observation and analysis. Later on, they give an overview of the problem of trust and confidence according to Luhmann’s approach and its meaning for crisis rhetoric and marketing and managing approaches. Findings – In the following case study, the authors offer a rhetorical text analysis, combined with a pragmatic perspective of accompanying legal measurements of the government as non-verbal communication. The authors show how the government re-established trust among German consumers and eventually overcame the crisis mainly by rhetorical action. Research limitations/implications – Regarding future crises, the authors suggest that the interaction of trust, financial markets and rhetorical approaches could be better understood. This could include both more quantitative research and qualitative rhetorical approaches. Practical implications – Practical implications clearly show the importance of rhetorical education, especially for crises. This counts for governmental managers, as well as entrepreneurs and spokesmen. Social implications – The authors also revealed the problem of unjustified trust which can become dangerous for social welfare, even if it is only produced by misleading communication. This problem can only be solved by a careful public regulation. Originality/value – Finally, the authors could describe the importance of effective language and communication as a tool for the German Government in the financial crisis in 2008. It can be also described as an example for decision-makers in similar situations.

scholarly journals Have EU derivative policy reforms since the 2008 financial crisis been designed effectively?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Charles Fergus Graham
Keyword(s):  
Financial Crisis ◽  
Heterogeneous Firms ◽  
Public Disclosure ◽  
The European Union ◽  
Policy Reforms ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Reporting Requirements ◽  
Firm Compliance ◽  
The 2008 Financial Crisis

Purpose In response to the 2008 financial crisis, the European Union (EU) comprehensively restructured its derivative regulation. A key component of this new framework is a reporting obligation for every derivative trade. As the reporting requirement does not involve public disclosure of the information, existing academic analysis on reporting regulations to-date, which focusses on public disclosure, is limited in predicting the effectiveness of the reform. This paper aims to assess whether the reform has been designed effectively based on the regulatory setup in the UK. Design/methodology/approach Framing the reporting regulation as a moral hazard problem with asymmetric information, this paper uses a game-theoretical approach to evaluate whether the new derivative reporting obligation effectively induces firm compliance. I also discuss potential extensions of the derivative reporting model, with particular emphasis on how the framework could account for heterogeneous firms and different regulatory tools. Findings Based on the theoretical analysis, this paper finds that while firms are unlikely to comply fully with derivative reporting requirements, it is possible to induce relatively high firm compliance. Although this does not mean we are immune from another financial crisis, the derivative reporting requirements should equip EU regulators to monitor a more transparent and secure derivatives market. Originality/value This paper provides a theoretical foundation for further study of post-crisis derivatives reforms. In particular, the implications of the model point to an empirical strategy to test the accuracy of the model.

The effect of holding company affiliation on bank risk and the 2008 financial crisis

2017 ◽  
Vol 34 (1) ◽  
pp. 105-121 ◽  
Author(s):  
Krishnan Dandapani ◽  
Edward R. Lawrence ◽  
Fernando M. Patterson
Keyword(s):  
Financial Crisis ◽  
Univariate Analysis ◽  
Mortgage Lending ◽  
Capital Adequacy ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Holding Company ◽  
The 2008 Financial Crisis ◽  
Home Mortgage ◽  
Level Of Risk

Purpose The organizational form of financial institutions is related to their level of risk, leverage, liquidity and capitalization. High level of risk and leverage and lower levels of liquidity and capitalization are considered to be the root causes of the 2008 financial crisis. The purpose of this paper is to investigate if banks affiliated to holding company structure contributed more to the root causes of crisis than unaffiliated banks. Design/methodology/approach The paper isolates the effect of holding company association by restricting the sample to one-bank holding companies and individual banks. A comparative analysis of independent and holding company-affiliated banks is performed. Univariate analysis and multivariate regressions are used to compare the risk, leverage, liquidity and capitalization of affiliated and independent banks. Findings The paper finds that holding company affiliation is linked to several root causes of the 2008 financial crisis. Specifically, holding company affiliation results in higher levels of home mortgage loans underwritten and underperforming, higher leverage, lower liquidity and lower capitalization for the subsidiary bank. Practical implications The paper demonstrates that affiliated banks use their higher leveraged positions to engage in riskier home mortgage lending, sacrificing both liquidity and capital adequacy. These findings can help policy makers to focus on the group of banks that are part of holding company affiliation and implement such policies and regulations so as to avoid any re-occurrence of financial crisis. Originality/value This paper is the first to link the structural differences in banks to the root causes of financial crisis and to isolate the effect of holding company affiliation through sample selection. The paper will be valued to other researchers who try to isolate the effect of holding company affiliation and those studying the causes of the financial crisis of 2008.

Reflection on higher degree apprenticeship development

2017 ◽  
Vol 7 (1) ◽  
pp. 112-122 ◽  
Author(s):  
Alastair Irons
Keyword(s):  
Study Data ◽  
Positive Outcomes ◽  
Content Type ◽  
Shared Experiences ◽  
Challenges And Opportunities ◽  
Original Case ◽  
First Time ◽  
Practical Implications ◽  
Case Study Data

Purpose The purpose of this paper is to share the experiences of designing, developing and implementing a higher degree apprenticeship programme. Design/methodology/approach The methodology used in this paper is a case study. Data have been gathered from students, employers and academic colleagues. Findings The findings from the case study are that the implementation of a higher degree apprenticeship programme for the first time is a complex and time-consuming process, but there are significant benefits and positive outcomes. The process of development and implementation requires commitment from all partners in the programme. Research limitations/implications This is only one case study and is based on the experiential findings from one institution with one employer. Whilst the findings cannot be generalised, it is hoped that others will gain insight from the shared experiences. Practical implications The practical implications from the case study are that there are a range of activities that need to be undertaken and completed before a degree apprenticeship programme can be implemented. Some of these activities can happen in parallel but others are dependent on each other. There are various stakeholders in the operation of the programme which adds to the complexity. Originality/value This case study is an original case study evaluating the experience of developing and operating a degree apprenticeship programme for the first time. It provides a description of the challenges and opportunities in developing and implementing the programme and as such hopefully will provide value to others as they go through similar processes of development and implementation.

scholarly journals Service-dominant logic for managing the logistics-manufacturing interface

2015 ◽  
Vol 26 (1) ◽  
pp. 195-214 ◽  
Author(s):  
Yong Lin ◽  
Saara Pekkarinen ◽  
Shihua Ma
Keyword(s):  
Information Systems ◽  
Study Data ◽  
Abductive Reasoning ◽  
Content Type ◽  
Data Validity ◽  
Service Offering ◽  
Relational Logic ◽  
Depth Interviews ◽  
Case Study Data

Purpose – The purpose of this paper is to investigate the management of the logistics-manufacturing interface between the manufacturer and its logistics service provider from the perspective of the service-dominant (S-D) logic. Design/methodology/approach – The approach adopted is that of abductive reasoning through case study: data are primarily gleaned from semi-structured in-depth interviews. Field visits and secondary documentation are used to ensure data validity. Findings – The results show that the interface can be categorized into three levels: design interface between products and logistic services, process interface between manufacturing processes and service-offering processes, and information interface between manufacturing information systems and logistics information systems. The results also indicate that ten foundational premises of S-D logic, especially service-focussed, customer-oriented and rational views can be applied in defining and managing these interfaces. Research limitations/implications – This research contributes not only to the theory of S-D logic and managing interface, but also provides managers with guidelines of applying S-D logic to build a service-focussed, customer-oriented and relational logic to effectively manage the logistics-manufacturing interface. However, the research is limited to the context of automotive and logistics industries. Originality/value – Three levels of logistics-manufacturing interface, including design, process and information are identified, and S-D logic is applied to identify and manage the interface.

M&A activity shows perils of misvaluation

2016 ◽  
Keyword(s):  
Financial Crisis ◽  
International Expansion ◽  
Macroeconomic Performance ◽  
2008 Financial Crisis ◽  
Content Type ◽  
Percentage Points ◽  
The 2008 Financial Crisis

Significance The deal is the largest of 2016, a year in which acquisition premiums are the highest in a decade. However, this year has also seen the most cancelled transactions since the 2008 financial crisis. Volatility within the macro environment highlights the risks to these transactions, where a misvaluation of a few percentage points can cost billions of dollars. Impacts International expansion multiplies the markets whose macroeconomic performance must be modelled. For example, not anticipating the commodities bust would have overvalued companies operating in markets as diverse as Australia and Zambia. Upside risks increase for investors who accurately forecast that the market consensus has not priced in necessary information.

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