5 Formalities and Control

This chapter focuses on the creation of a collateral transaction. It looks at two issues: (i) which formalities must be fulfilled in order to create a collateral transaction, or, more specifically, to validly provide collateral? And (ii) to what extent must the collateral taker have 'possession' or 'control' for a valid provision of collateral? These two issues seem to be especially problematical in the jurisdictions of the EU Member States. The problems follow from the implementation of the Collateral Directive into EU Member States laws, where both issues required derogations of, or at least amendments of, their national (property) laws. More specifically, the Collateral Directive aims to dis-apply formal requirements for collateral transactions to be validly created, i.e. for collateral to be validly provided. Examples of such formal requirements are the registration of a security interest with a public register and the execution of a specific document in a mandatory way. Meanwhile, general US property law requires the collateral taker to be in control of the collateralized assets as a means of perfecting a security interest.

Collateralized Assets Prices and Monetary Policy

Un sistema financiero bien informado y cauteloso puede mejorar el bienestar de una economía al canalizar los excedentes de los ahorradores a los prestatarios. Sin embargo, en una situación de crisis, el menor precio de bienes hipotecables limita la capacidad de crédito de la economía, generando la posibilidad de una reducción en el crédito inclusive en un escenario de bajas tasas de interés. Este documento ilustra el punto anteriormente mencionado através de un modelo de equilibrio general en el que el uso de activos como colateral determina que tan riesgoso es el comportamiento del sistema financiero. Esta y varias otras condiciones amplifican la magnitud de un choque de productividad negativo

The Ordeals of Colonial Contracting: Reactions to and Repercussions of Two Failed State-Private Ventures in Habsburg Portugal (1622–1628)

Among the solutions devised by early modern Western European states to engage with the private sector in the governance of their overseas empires, the adjudication of revenue farms and colonial monopolies was often dismissed by historians on the grounds of being coercive, inefficient, and risk-exempt for the contractors. In reality, however, the threat of financial hardship and insolvency was very real, and not infrequently led to contractual removal, the seizure of collateralized assets, and even the imprisonment of the concessionaires.This article approaches the neglected topic of failure in big business in early seventeenth-century Portugal, an overlooked case of a contractor state that relied extensively on the adjudication of government contracts to finance and rule its overseas empire. By looking into the downward trajectories of two tax-farmers and the collapse of their contractual dealings, light will be shed on how the Crown and private entrepreneurs reacted to the repercussions of failure in these early modern public-private partnerships. It will also be shown how the road leading to termination was very much shaped by the political relationships between the Crown and its contractors and can only be understood in the context of wider relationships of brokerage, credit, and service between the two.