Index
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), 217, 225
establishment of, 243
Ad hoc obligations, 95n57
AML/CFT requirements. See Antimoney laundering and combating the financing of terrorism requirements
Antideflationary monetary policy, 174
Antimoney laundering and combating the financing of terrorism (AML/CFT) requirements, 225, 264, 277
FATF on, 233, 267
for Islamic banking, 232–34
Arab Monetary Fund, 208
Asian financial crisis of 1990s, 133–34 IMF in, 252
Assessment, rights of, 110
Asset management industry, regulatory reform and, 6
Asset separation, 19–20
Asset structure, in Islamic banking, 213f
Attribution, principle of, 163
Australian Transaction Reports, 264
Bail-in bonds, 89
Bail-in strategies, 19
advantages of, 37
bail-outs compared with, 85–86
for bank failure, 72
bridge, 92
closed-bank, 20
defining, 85–86
execution of, 94–95
FSB on, 85–86
indirect, 92
Islamic banking and, 232
loss absorption and, 20–21
MREL and, 20
open-bank, 20, 92
in regulatory reform, 33–50
SIFIs and, 38–48
statutory, 115
total loss absorbing capacity and, 38–48
Bail-outs bail-in strategy compared with, 85–86
defining, 85–86
Balance sheet structure, in Islamic banking, 211–12, 227
Banco de la Republica, 161
Banco Spirito Santo, 66
Bank failure, bail in strategy for, 72
Bank financing, for corporate debt restructuring, 126
Bank for International Settlements, 146
IFSB and, 247
Banking credit, formal companies using, 136t
Banking Reform Act 2013, 33
Banking Secrecy Act, 278
Banking Union, 64
establishment of, 12
pillars of, 12–13
Single Rulebook and, 13
Bank of England (BoE), 32, 158, 179
on exit strategies, 38
independence of, 185
Resolution Paper of, 36–37
resolution strategies of, 33
on valuations, 38
Bank of England Act 1998, 185n37
Bank of Portugal, 66
Bank Recovery and Resolution Directive (BRRD), 11, 13, 32
amendments to, 89
Article 45, 46
Article 45(12), 63
Article 55, 67
Article 66(3), 65
Article 66(4), 66
Article 66(5), 66
on cross-border resolution, 75
EBA and, 58
in EU resolution framework, 14
European Commission on, 47
Key Attributes for Effective Resolution and, 58–59
MREL and, 46, 62–63
safeguards, 22
SRM and, 14n18
TLAC and, 46
Bankruptcy, 175
corporate debt restructuring and, 126
in Mexico, 131n3
nonperforming loans and, 125
Bankruptcy Code, Chapter 11, 36
Bankruptcy Court, US, 197
Bank supervisor liability in France, 178
in Germany, 177–78
international standards on, 180
in Italy, 178–79
United Kingdom, 179
Barbados, 261
Basel 2.5 framework, publication of, 237
Basel Committee, 188
on Banking Supervision, 31, 73
Cross-Border Resolution Group, 74
historical background of, 236–37
international regulation and, 236–39
on Islamic Finance, 203
Market Risk Amendment to Capital Accord, 237
Pillar 3 framework, 94
Basel Core Principles, 225, 239
Basel I framework, 8, 237
Basel II framework, 8
Islamic finance and, 199–201
publication of, 237
Basel III framework, 8, 8n8, 91, 264
on discount window, 200
goals of, 238
IFSB and, 202
on liquidity, 200
publication of, 238
Sharī’ah governance and, 201
BoE. See Bank of England
Bonds, bail-in, 89
Boston Consulting Group, 267 Brazil, 160–61
Brexit, 28, 33
Bridge bail-in strategy, 92
Bridge bank, 19–20
Brown, Gordon, 185
BRRD. See Bank Recovery and Resolution Directive
Capital adequacy ratio (CAR), 212
in Islamic banking, 214f
Capital instruments ranking, 21–22
Capital requirements directive (CRD), 11, 13, 152
Article 2(5), 150
of ECB, 148
Capital requirements regulation (CRR), 11, 13, 152
Article 4(1)(1), 148
of ECB, 148
Capital structure liabilities, in cross- border resolution, 86
CAR. See Capital adequacy ratio
CBRG. See Cross Border Resolution Group
CBRs. See Correspondent banking relationships
Central banks of Chile, 164–65
classical debates on, 163
during financial crisis of 2008, 143
financial stability task of, 160, 173–74
formal independence of, 183
formal mandate, 176–77
independence of, 162–65, 182–83
in Latin America, 158–59
liability of, 176–82
major financial crises and, 174
mandate, 173
monetary policy of, 185–86
monetary stability and, 162–65, 173–74
objectives of, 173–76
operational independence of, 183–85
of Peru, 164
reputational risk and, 182
systemic risk and, 166
Central clearing counterparties (CCPs) clearing services, 117
cross-border resolution and, 119–20
default management processes and, 118
equity write-down and, 115–16
FMIs and, 114
FSB on, 113–14
governing of, 119
home jurisdiction, 120
ISDA on, 118n84
under Key Attributes for Effective Resolution, 112, 114
legal frameworks for resolution of, 115
limited recourse provisions and, 117
loss allocation rules, 111–14
mutuality principle among, 115
netting sets and, 117–18
nondefault losses, 114–15
participants, 109n8
PFMI on, 119
recovery and resolution arrangements, 109n9, 111–16
Resolution Guidance, 113n38
resolution regime development, 114—15, 118
role of, 107
rulebook, 108, 115n54, 116, 119
shareholders, 114
silo structures and, 117
special resolution regimes for, 108, 108n8
structural elements of, 116–18
systemic importance of, 107–8
transparency and, 114–15
waterfall, 109–11
Central Reserve Bank of Peru, 167
Charities, 280
Chile central bank of, 164–65
financial stability councils of, 164
macroprudential powers in, 162–65
China, shadow banks in, 5
Chrysler, 257
Claim priority, in corporate debt restructuring, 130
Classical carve-out, in Latin America, 165–67
Clean holding company requirements, of TLAC, 40
Closed-bank bail-in, 20
CMGs. See Crisis management groups
COAGs. See Cooperation agreements
Comity, 96n61
Commercial codes, from Ottoman empire, 197
Commission Delegated Regulation (EU) 2016/1075, 59
Commission Delegated Regulation (EU) 2016/1450, 62–63
Committee on Payment and Settlement Systems (CPSS), historical background of, 241
Committee on Payments and Market Infrastructure, 265
Common Equity Tier 1, 238
Concordat, 239
Conflict resolution, 245–46
Constitutional Court of Colombia, 161n10
Consumer prices, monetary policy and, 173n30
Consumer protection, in Islamic banking, 218, 222
Continuity of services, 118n85
Contractual cross-border recognition, 96–97
Contractual recognition clauses cross-border resolution and, 66–67
International Swaps and Derivatives Association on, 67
Cooperation agreements (COAGs), 71
Cooperation architecture, EU resolution framework and, 58–59
Cooperation mandate, cross-border resolution and, 70–71
Core Principles for Effective Banking Supervision, Basel Committee, 225
issuing of, 239
revision of, 239
Core Principles for Islamic Finance Regulation
application of, 247–48
launching of, 205
Corporate debt economic growth and, 252–54
financial stability and, 252–54
insolvency laws and, 254–57
out-of-court procedures and, 254–57
Corporate governance frameworks, in Islamic banking, 217–18
Corporate sector, financial sector and, 130–31
Correspondent banking communication in, 269
defining, 261
impact of, 262–66
regulatory frameworks in, 270
supervisory frameworks in, 270
trends in, 262–66
Correspondent banking relationships (CBRs), 261
drives of pressures, 266–68
FATF on, 271
FSB on, 265, 268
IMF on, 267–68
industry solutions for, 268–71
policy responses to, 268–71
withdrawal from, 266, 267
Corruption, 257–58
Council Decision 98/415/EC, 145n51
Council of the European Union, 10 in decision-making, 18–19
CPPs. See Central clearing counterparties
CPSS. See Committee on Payment and Settlement Systems
CRD. See Capital requirements directive
Creditor hierarchies cross-border resolution and, 79–80 under insolvency laws, 89
Criminal law, insolvency law and, 258
Crisis management groups (CMGs) COAG support of, 71
in cross-border recognition, 98
cross-border resolution and, 81
in European Union, 23
G-SIBs and, 56
non-binding memoranda of, 59
Critical functions, FSB on, 84n4
Cross-border effectiveness, 96–98
Cross-border insolvency, 77n76
Cross-border recognition CMGs in, 98
contractual, 96–97
cost allocation, 98–99
home-host cooperation in, 98–99
statutory, 96–97
Cross-border resolution bankrupt, 84–86
BRRD on, 75
capital structure liabilities in, 86
CCPs and, 119–20
challenges in, 77–81
CMGs and, 81
conditions for, 95
contractual recognition clauses and, 66–67
cooperation mandate and, 70–71, 80
creditor hierarchies and, 79–80
early termination rights and, 97–98
effectiveness of, 79–80
enforcement of, 71–72
EU and, 57
evolution of, 101
features of enforcement mechanisms, 76–77
firms impacted by, 100
FSB on, 83–84
funding in, 95
in global dimension, 64–65
implementation of, 65–66, 77–81
international approach to, 55–58
interpretation of, 80
Key Attributes for Effective Resolution and, 69–77, 87–88
legal mechanisms for enforcement of, 74
middle ground approach to, 73–74
MPOE and, 61
operating liabilities in, 86
operational continuity in, 95
operational structures and, 100
paradigm shifts in, 84–86
planning, 101
preferred strategies for, 60–62
recognition of, 74–75, 80–81
ring fencing and, 62–64
SPOE and, 61 support for, 75–76
territorial approach to, 73
in TLAC, 87–95
too-big-to-fail syndrome and, 55–56
toolkit, 86–99
universal approach to, 73
Cross Border Resolution Group (CBRG), 31
CRR. See Capital requirements regulation
Culture, 7–8
Debasement of currency, 186
Debt restructuring, 255
achievement of, 126
bank financing for, 126
bankruptcy and, 126
claim priority in, 130
company viability and, 126
consequences of failure to, 131
debt instruments for, 126
global strategy for, 126–29
hybrid systems for, 129
informal, 128–29
international contributions to, 133–35
key features of robust systems for, 129
in Latin America, 137
legal framework for, 131–32
mechanism design for, 130–32
in Mexico, 127n7, 135–40
miscellaneous incentives in, 132
out-of-court, 128–29
problems with, 125 state role in, 132–33
systemic crisis and, 127–28
World Bank on, 129
See also Corporate debt
Decision-making, 183, 189
Council of the European Union in, 18–19
European Commission in, 18–19
NRAs and, 17
Dedollarization, 168
Default losses, nondefault losses and, 115
Default management processes, CCPs and, 118
Deposit Guarantee Schemes Directive (DGSD), 11, 13
De-risking consequences of, 278
defining, 275–76
drivers of, 278
evidence of, 276–77
FATF on, 276
IMF on, 276
responses to, 278–79
Derivatives, OTC, 107
DGSD. See Deposit Guarantee Schemes Directive
DIP financing development, 147
in Mexico, 137–40
Directive 2001/24/EC, 59, 65
Directive 2014/59/EU, Article 45, 88n83
Discount window, Basel III framework on, 200
Discriminatory actions, 73n3
Dodd-Frank Act, 30, 34, 91 «26, 158 costs under, 50 FDIC and, 71 «3
Duel liability standard, 181–82
Early termination rights, cross-border resolution and, 97–98
Eastern Caribbean Currency Union, 263
EBA. See European Banking Authority
ECB. See European Central Bank Economic Constitution, 157
Economic growth, corporate debt and, 252–54
EEA. See European Union/European Economic Area
ELA. See Emergency liquidity assistance
EMDEs. See Emerging markets and developing economies
Emergency liquidity assistance (ELA), 146«18, 219
Emerging markets and developing economies (EMDEs), 3 IMF on, 4–5 regulatory reform and, 4
Equity write-down, CCPs and, 115–16
ESAs. See European Supervisory Agencies
ESCB. See European System of Central Banks
ESRB. See European System Risk Board
EU. See European Union
EU resolution framework
BRRD in, 14
components of, 14
cooperation architecture and, 58–59
SRM in, 14
European Banking Authority (EBA), 11, 146, 147, 188
BRRD and, 58
Framework Cooperation Arrangement of, 57n5
European Central Bank (ECB), 10, 188
advisory tasks of, 146
authority of, 149–50
CRD of, 148–49
CRR of, 148–49
ESRB and, 150
in euro area, 152
financial stability task of, 144–55
Governing Council, 146–47
independence of, 152–53
macroprudential powers of, 148–49, 158
microprudential powers of, 150–52
new functions of, 152–53
objectives of, 143–44
oversight of, 147
price stability task of, 144–55
separation principle of, 153–55
SSM and, 151, 158
supervisory mandate of, 151
synergies and tensions in functions of, 148–49
weaknesses of monetary policy of, 153n40
European Commission, 10
on BRRD, 47
in decision-making, 18–19
in financial crisis of 2008, 147
Proposal of Directive, 63–64
European Convention of Human Rights, 37, 180
European Court of Justice, 178
European Deposit Insurance Fund, 13
European Deposit Insurance Scheme, 13
European Insurance and Occupational Pensions Authority, 147
European Monetary Union, 175n13
European resolution colleges, establishment of, 23–24
European Securities Markets Authority, 147
European Supervisory Agencies (ESAs), 11
European System of Central Banks (ESCB) Article 14.4 of statute of, 147
enforcement powers of, 149
objective of, 144
secondary tasks of, 145
TFEU on, 144–45
European System of Financial Supervision, 147
establishment of, 11
European System Risk Board (ESRB), 146, 148
amendments to, 149n26
ECB and, 150
enforcement powers of, 149
European Treaty, 57
European Union (EU) crisis management groups in, 23
cross-border resolution and, 57
financial crisis of 2008 response of, 32, 57
harmonization within, 79–80 on MREL, 39
European Union/European Economic Area (EEA), 73
Eurosystem on financial stability, 146
objectives of, 144, 146
oversight of, 146n17
Ex ante cooperation agreements, for G-SIFIs, 71
Exchange rate volatility, 168
Executive Session, SRB, 17–18
Exit strategies BoE on, 38
FDIC on, 38
SPOE in, 35
Failure resolution, 85
FATF. See Financial Action Task Force
Federal Deposit Insurance Corporation (FDIC), 29, 43, 180
Dodd-Frank Act and, 71 n3
on exit strategies, 38
under OLA, 31
on resolution strategies, 36
Federal Deposit Insurance Fund, 13
Federal Reserve, 96n44
SIFIs and, 47
on TLAC, 40
Federal Reserve Rule, 40, 43
restrictiveness of, 41
Financial Action Task Force (FATF), 232
on AML/CFT requirements, 233, 267
on CBRs, 271
on de-risking, 276
on financial institutions, 233
on money laundering, 233
Recommendations of, 233
Financial Conduct Authority, 38
Financial crisis of 2008 central banks during, 143
EU response to, 32, 57
European Commission in, 147
international responses to, 30
origins of, 28–29
reforms after, 3, 28
regulation during, 28
SIFIs in, 28
UK response to, 32–33
US response to, 30–32
Financial market infrastructure (FMI), 117n33
access to, 118n35
CCPs and, 114
implementation guidance of, 108n2
PFMI on, 119n36
Financial Market Supervisory Authority, 71 n3
Financial Policy Committee, 158
Financial sector, corporate sector and, 130–31
Financial Sector Assessment Programs, 4, 239, 265–66
Financial Services Act 2012, 32
Financial Services Authority, 179
Financial stability of central banks, 160, 173–74
of ECB, 144–55
enhanced focus on, 147–48
of Eurosystem, 146
monetary policy and, 163
preservation of, 145 n12
value of, 145
Financial stability, corporate debt and, 252–54
Financial Stability Board (FSB), 3–4, 6, 23, 30, 55–56, 181n26
on bail-in strategy, 85–86
on CBRs, 265, 268
on CCPs, 113–14
on critical functions, 84n4
on cross-border resolution, 83–84
goals of, 240
history of, 240
in international regulation, 240
on Islamic banking, 247
on Key Attributes for Effective Resolution, 78, 83–84
objectives of, 39
on shadow banks, 240
on SIFIs, 39–40
Supervisory Intensity and Effectiveness work stream of, 7
term sheets, 92n27
on TLAC, 39–40
on TLAC Standard, 56
trend monitoring by, 265
See also Key Attributes for Effective Resolution, FSB
Financial Stability Committee, 158
Financial stability councils of Chile, 164
in Latin America, 159–61
in Peru, 161
Financial Stability Oversight Council, 158
FMI. See Financial market infrastructure
Foreign Bank Organization, 64–65
Foreign resolutions, 75–76
Formal independence, of central bank, 183
Framework Cooperation Arrangement, of EBA, 57n5
France, 47
bank supervisor liability in, 178
Fraud, 257–58
Friedman, Milton, on inflation, 186
FSB. See Financial Stability Board
Functional approach, 245
G10. See Group of 10
G20. See Group of 20
García-Escribano, Mercedes, 168
General Agreement on Trade and Services (GATS), 165, 166, 167n31
General Motors, 257
Germany, 89
bank supervisor liability in, 177–78
Gharar, 199, 226
Global Economy Meeting, 241 Global systemically important banks (G-SIBs), 23, 39–40
CMGs and, 56
entities within, 91
failure of, 56
MPOE for, 90
public disclosures, 94n32
securities, 94
TLAC and, 88n14
Global systemically important financial institutions (G-SIFIs), 69
ex ante cooperation agreements for, 71
Going-concern capital, 238
Goldman Sachs v. Novo Banco, 66, 80n21
Government bonds, 175n12
defining, 182n20
See also the State
Group of 10 (G10), 236, 241
Group of 20 (G20), 6–7, 107
G-SIBs. See Global systemically important banks
G-SIFIs. See Global systemically important financial institutions
Haircutting initial margin, 110
variation margin gains, 110
Harmonization, 65
within EU, 79–80
between resolution regimes, 78
Helicopter money, 174n11
Holding companies, 91 n26
Home-host cooperation, in cross-border recognition, 98–99
Hong Kong Special Administration Region, 75
Huertas, Thomas, 55
Human resources, in international regulation, 245–46
Hyperinflation, in Peru, 168
IADI. See International Association of Deposit Insurers
IFSB. See Islamic Financial Services Board
Ijara, 212
IMF. See International Monetary Fund
India, insolvency law in, 256
Indirect bail-in strategy, 92
Inflation, Friedman on, 186
Inflation shocks, 185
Informal restructuring, 128–29
Information sharing, 270
Initial margin defining, 109n9
haircutting, 110
Insolvency law criminal law and, 258
defining, 258
n India, 256
Insolvency laws, 48
corporate debt and, 254–57
creditor hierarchy under, 89
cross-border, 77n16
formal, 254–55
NCWOL and, 255–56
out-of-court procedures and, 254–57
SIFIs and, 29
See also Mexican Insolvency Law
Insolvency regime, key features of, 129–30
Instituto Federal de Especialistas de Concursos Mercantiles, 136n8
Integrated approach, 245–46, 246n29
International Association of Deposit Insurers (IADI), historical background of, 241–42
International Association of Insurance Providers, 199
International Association of Restructuring Insolvency & Bankruptcy Professionals, 135, 254
International cooperation, SRB and, 23–24
International Monetary Fund (IMF), 73, 263–66
Article IV consultations of, 271
in Asian financial crisis of 1990s, 252
on CBRs, 267–68
on de-risking, 276
on EMDEs, 4–5
Financial Sector Assessment Programs, 4
on Islamic finance, 197
as legal phenomenon, 156
on middle ground approach, 74
monitoring conducted by, 244–45
Policy Paper, 266
on rule of law, 157
on shadow banks, 5
International Organization of Securities Commissions (IOSCO), 193, 241
International regulation Basel Committee and, 236–39
consistent implementation of, 246
FSB in, 240
functional approach to supervision of, 245
human resources in, 245–46
IFSB in, 243
implementation challenges in, 244–48
integrated approach to supervision of, 245—46, 246n29
Islamic banking and, 242–44, 247–48
monitoring, 244–45
practical application of standards in, 246—47
resolution regimes in, 240
timely implementation of, 246
twin peaks approach to supervision of, 245–46, 246n29
International standards, of bank resolution, 188–89
International Swap Dealers Association, 78 on safeguards, 79
International Swaps and Derivatives Association (ISDA), 36, 97
on CCPs, 118n34
on contractual recognition clauses, 67
Investment risk reserve (IRR), 212
IOSCO. See International Organization of Securities Commissions
Iran, 198
IRR. See Investment risk reserve
ISDA. See International Swaps and Derivatives Association
Islamic banking AML/CFT requirements for, 232–34
assets by country, 210f
asset structure, 213f
bail-in strategies and, 232
balance sheet structure in, 211–12, 227
banking products in, 227–28
benefits of, 224n1
capital adequacy ratio in, 214f
concentration of, 211
consumer protection in, 218, 222
conventional banking and, 221, 226–28
corporate governance frameworks in, 217–18
corporate structure in, 211–12, 226
defining, 224
financial soundness of, 212–13
financing in, by instrument, 213f
financing structure in, by sector, 213f
FSB on, 247
growth of, 208
institutional arrangements in, 230
international regulation and, 242–44, 247–48
Islamic jurisprudence in, 226
Key Attributes for Effective Resolution on, 228
legal frameworks for, 224–25, 228–32
liability structure in, 213f
licenses for, 221
liquid asset ratio in, 214f
liquidity management in, 219–20
market share of, 210f
maturities in, 219n13
nonperforming financing in, 214f
outlook of, 212–13
purchase-and-assumption in, 231–32
recent developments in, 209–14
regulatory frameworks, 214–16
resolution framework in, 220
resolution powers and tools, 231
resolution triggers in, 230–31
return on assets in, 214f
safety nets in, 229 scale of, 209–11
shares of global assets in, 210f
Sharī’ah governance in, 201
supervisory frameworks in, 216–17, 222
systemic importance of, 209
Islamic capital markets, 204–5
Islamic finance Basel Committee on, 203
Basel II framework and, 199–201
Core Principles for Islamic Finance Regulation, 205
distinctive qualities of, 195–96
IMF on, 197
liquidity in, 200
regulatory challenges in, 196–97
structure of, 210f
transparency in, 196–97
World Bank on, 205
Islamic Financial Services Act, 229
Islamic Financial Services Board (IFSB), 193, 225
adoption of standards of, 221
Bank for International Settlements and, 247
Basel III framework and, 202
establishment of, 243
expected new standards, 199f
implementation challenges, 204f
implementation progress, 201–6
implementation surveys, 201 f, 202
in international regulation, 243
major focuses of, 200f
medium-term agenda of, 203–6
Quantitative Impact Survey, 201
Revised Capital Adequacy Standard, 200
role of, 243
on Sharī’ah, 194–95
Stability Forum, 205
standards by timeline, 203f
standard-setting by, 198–201
Strategic Performance Plan, 203–5
World Bank and, 247
Islamic Financial Stability Forum, 205
Islamic jurisprudence, in Islamic banking, 226
Italy, bank supervisor liability in, 178–79
Jakarta Initiative, 253
Kechichian case, 178
Key Attributes for Effective Resolution, FSB, 7, 30, 31, 83n3, 107–8
on bank resolution, 188–89
BRRD and, 58–59
CCPs under, 112, 114
cross-border resolution and, 69–77, 87–88
FSB on, 78, 83–84
implementation of, 78, 83–84
on Islamic banking, 228
objectives of, 240
on safeguards, 79
stabilization powers in, 87–88
on transparency, 119n36
wind-down powers in, 88
King, Mervyn, 55
Kotnik case, 66
Larosière, Jacques de, 147
Larosière Report, 147, 150
Latin America central banks in, 158–59
classical carve-out in, 165–67
corporate debt restructuring in, 137
financial stability councils in, 159–61
macroprudential exemptions in, 165–67
macroprudential powers in, 160t, 162–69
Lawson, Nigel, 185
Legal-entity-driven processes, 117
Legislative Guide on Insolvency Law, UNCITRAL, 134
Ley de Concursos Mercantiles, 125, 135
Liability structure, in Islamic banking, 213f
Limited recourse provisions, CCPs and, 117
Liquidity asset ratio in Islamic banking, 214f
Basel III framework on, 200
emergency liquidity assistance, 146n18
in Islamic finance, 200
management in Islamic banking, 219–20
of SIFIs, 48
Long-term debt, of SIFIs, 38–39
Loss absorption, bail-in and, 20–21
Loss allocation rules, CCP, 111–14
waterfall and, 110
Luxembourg, 22
Macroprudential exemptions, in Latin America, 165–67
Macro Prudential Forum, 158
Macroprudential powers in Chile, 162–65
of ECB, 148, 158
implementation of, 167–69
in Latin America, 160t, 162–69
in Peru, 162–65, 167–69
Macroprudential supervision defining, 172
independence in, 186–87
regulation of, 172, 187–88
scope of, 171–72
stricto sensu, 188
systemic risk and, 187
Major financial crises, central banks and, 174
Market Risk Amendment to Capital Accord, Basel Committee, 237
Matsushita, Mitsuo, 165–66
Mediation Panel, 154
Mexicana case, 135
Mexican Insolvency Law
Article 37, 138
Article 43, 138
Article 75, 138–39
Article 224, 139
key features of, 255
Probability of Default in, 139
Severity of Loss in, 139
Mexico, 125, 280 bankruptcy in, 131 n3
companies and credit in, 136–37
corporate debt restructuring in, 127n1, 135–40
DIP financing in, 137–40
financial crisis in, 131 n4 NPLs in, 253
Microprudential powers, of ECB, 150–52
Middle ground approach to cross-border resolution, 73–74
IMF on, 74
Minimum requirements for own funds and eligible liabilities (MREL), 88
bail-in and, 20
BRRD and, 46, 62–63
establishment of, 15 EU on, 39
setting of, 59
TLAC and, 46
Misfeasance, 179
Model Law on Cross-Border Insolvency, UNCITRAL, 134
Monetary policy antideflationary, 174
of central banks, 185–86
consumer prices and, 173n10
debasement of currency through, 186
of ECB, 153n40
financial stability and, 163
independence in conduct of, 185–86
systemic risk and, 187
Monetary stability central banks and, 162–65, 173–74
ordoliberalism on, 162
Money laundering, 205
FATF on, 233
See also Antimoney laundering and combating the financing of terrorism requirements
MPOE. See Multiple point of entry
MREL. See Minimum requirements for own funds and eligible liabilities
Mudarabah, 212, 215, 219
Multiple point of entry (MPOE) cross-border resolution and, 61
for G-SIBs, 90
SIFIs and, 34
Murabahah, 212, 219n13
Musharakah, 212, 215
National Banking and Securities Commission, 279
National Bank of Greece v. Metliss, 96, 96n39
National competent authorities (NCAs), 147
National resolution authorities (NRAs), 10
decision-making and, 17
resolution tools of, 19
safeguards, 21
SRB and, 15–19
National Sharī’ah board (NSB), 217
NCAs. See National competent authorities
NCWOL. See No creditor worse off than in liquidation
Netting sets, CCPs and, 117–18
No creditor worse off than in liquidation (NCWOL), 88, 113n18
determination of, 117
insolvency laws and, 255–56
violation of, 94
Nondefault losses CCPs and, 114–15
default losses and, 115
Nonperforming financing, in Islamic banking, 214f
Nonperforming loans (NPL) bankruptcy and, 125
in Mexico, 253
recognition of, 253
Nonprofit organizations (NPOs), 264
NPL. See Nonperforming loans
NPOs. See Nonprofit organizations
NRAs. See National resolution authorities
NSB. See National Sharī’ah board
Occupy movement, 28
OLA. See Orderly Liquidation Authority De Oliveira, Cristiano de, 160–61
Open-bank bail-in, 20, 92
Operating liabilities in cross-border resolution, 86
subordination to, 88–89
TLAC and, 88–89
Operational continuity, in cross-border resolution, 95
Operational independence of central bank, 183–85
degrees of, 184
scope of, 184–85
Operational structures cross-border resolution and, 100
rationalization of, 100
Orderly Liquidation Authority (OLA), 30, 34, 35
FDIC under, 31
Ordoliberalism, 157 on monetary stability, 162
OTC derivatives. See Over-the-counter derivatives
Ottoman empire, commercial codes from, 197
Out-of-court procedures consensus in, 254
corporate debt and, 254–57
insolvency laws and, 254–57
the state in, 255
Out-of-court restructuring, 128–29
Over-the-counter (OTC) derivatives, 107
Pacific Alliance, 161
Par condicio creditoris, 130
Pari passu treatment, 22, 89
Peer reviews, 244
PER. See profit equalization reserves Perception-based surveys, 262
global, 263
regional, 263–66
Peru central bank of, 164
economy of, 168
financial stability councils in, 161
hyperinflation in, 168
macroprudential powers in, 162–65, 167–69
Peru-United States Free Trade Agreement, 166
Peter Paul case, 177
PFMI. See Principles for Financial Market Infrastructures
Plenary Session, SRB, 17–18
Presidential election of 2016, 28
Price stability task, of ECB, 144–55
Principle of attribution, 163
Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, 134
Principles for Cross-Border Effectiveness of Resolution Actions, 57
Principles for Financial Market Infrastructures (PFMI), 109n9, 110–11
CCPs and, 119
development of, 241
on FMIs, 119n96
Principle 1, 119n36
Principle 4, 110n14
Profit equalization reserves (PER), 212
Profit-sharing investment accounts (PSIAs), 211
Prudential Regulation Authority, 179
PSIAs. See Profit-sharing investment accounts
Public officials, the state and, 133
Public policy, 77, 77n16
Qar, 220
Quantitative easing, 174
Realpolitik, 158
Reattribution, 162
Recapitalization, 40–41
Regulatory Consistency Assessment Program, 8
establishment of, 244
Regulatory reform, 3
asset management industry and, 6
bail-in in, 33–50
compression of, 8
EMDEs and, 4
financial deepening and, 4–5
financial inclusion and, 4–5
gaps in, 9
monitoring, 9
process of, 28–30
shadow banks in, 5
systemic risk and, 6
too-big-to-fail syndrome and, 6–7
Reorganisation measures, 65
Reports on the Observance of Standards and Codes, 244
Reputational risk, central banks and, 182
Resolution colleges establishment of, 23 European, 23–24
Resolution entities defining, 90 TLAC and, 90–91
Resolution groups, TLAC and, 90–91
Resolution regimes, harmonization between, 78
Resolution strategies of BoE, 33 FDIC on, 36 in UK, 33
Resolution tools of NRAs, 19 of SRB, 19
Resolvability conditions, 95
Respondent banks capacity of, 269–70
communication with, 269 defining, 261
Restricted investment accounts (RIA), 216
Restructuring actions, 20
Retakāul, 209
Return on assets, in Islamic banking, 214f
Revised Capital Adequacy Standard, IFSB, 200
RIA. See Restricted investment accounts
Riba, 226, 231
Ring fencing, 42
adverse consequences of, 55
cross-border resolution and, 62–64
Risk reassessment, 280
Risk sharing, 212
Risk-weighted assets framework, 8–9
Rule of law defining, 157 IMF on, 157
Safeguards, BRRD, 22
Sainz, Alejandro, 137 Sale of business tools, 19–20
Sapin 2 law, 47
Satmex case, 135
SDIS. Sharī’ah-compliant deposit insurance schemes
Securities and Exchange Commission (SEC), 36
Separation principle, of ECB, 153–55
Shadow banks in China, 5
drivers of, 5
financial development and, 5
FSB on, 240
IMF on, 5
in regulatory reform, 5
Shareholders CCP, 114 rights of, 94n35
Sharī’ah advisory board, 195
Sharī’ah-compliant deposit insurance schemes (SDIS), 220
Sharī’ah governance, 200
Basel III framework and, 201
compliance with, 229–30, 247
IFSB on, 194–95
in Islamic banking, 201
noncompliance with, 217
strengthening, 221–22
Sharī’ah test, toxic assets and, 195
SIFIs. See Systemically important financial institutions
Silo structures, CCPs and, 117
Single liability standard, 180–81
Single point of entry (SPOE), 34
BoE and, 36–38
corporate structure and, 61
cross-border resolution and, 61
exit strategy in, 35
summary of, 35–36
support for, 76
United Kingdom and, 36–38
Single Resolution Board (SRB), 10, 60
appeal panel, 22
establishment of, 14–15
Executive Session in, 17–18
functioning of, 14–15
international cooperation and, 23–24
NRAs and, 15–19
Plenary Session in, 17–18
resolution tools of, 19
SRM and, 17
Single Resolution Mechanism (SRM), 10, 60
Article 21, 21
BRRD and, 14n48
establishment of, 12–13, 148
in EU resolution framework, 14
functioning of, 14–15, 17
safeguards, 21 SRB and, 17
Single Rulebook applications of, 13
Banking Union and, 13
establishment of, 11–12
main texts of, 13
Single Supervisory Mechanism (SSM) Article 5 of, 149
Article 6(4) of, 152n37
Article 6 of, 152n38
Article 25, 154
Article 25(5), 154
Article 41 of, 151
Article 71, 152n37
Article 72, 152n37
ECB and, 151, 158
establishment of, 12–13, 148
Recital 55 of, 155
Recital 65 of, 154n42
Society for Worldwide Interbank Financial Telecommunications (SWIFT), 261, 265
Special resolution regimes, for CCPs, 108, 108n6
SPOE. See Single point of entry
SRB. See Single Resolution Board
SRM. See Single Resolution Mechanism
SSM. See Single Supervisory Mechanism
Stabilization powers, in Key Attributes for Effective Resolution, 87–88
Stare decisis, 196
the State in corporate debt restructuring, 132–33
as creditor, 133
as debtor, 133
as entrepreneur, 133
in out-of-court procedures, 255
public officials and, 133
as regulator, 132–33
as supervisor, 132–33
Statutory bail-in, 115
Statutory cross-border recognition, 96–97
Steering Committee, 154
Strategic Performance Plan, IFSB, 203–5
Sub-Saharan Africa, 262
Subsidiaries, 80 TLAC Standard on, 92
Substituting repos, 169
Sudan, 198
Sukûk, 194, 209, 212, 219
Surplus TLAC, 93
SWIFT. See Society for Worldwide Interbank Financial Telecommunications
Switzerland, 89
Systemically important financial institutions (SIFIs), 27
bail-ins and, 38–48
corporate reorganizations of, 49
Federal Reserve and, 47
in financial crisis of 2008, 28
FSB on, 39–40
global, 43
insolvency of, 29
liquid assets of, 48
long-term debt of, 38–39
MPOE approach, 34
powers of, 31–32
recovery plans, 48–49
total loss absorbing capacity and, 38–48
See also Global systemically important banks
Systemic crisis, corporate debt restructuring and, 127–28
Systemic risk assessment of, 187
central banks and, 166
macroprudential supervision and, 187
monetary policy and, 187
regulatory reform and, 6
T2S, 146
Takāful, 196, 198, 204, 209, 220
Take-up rate, 202
TARGET2, 146
Tawarruq, 219n93
Tea Party movement, 28
Tear-up, 110
Territorial approach, to cross-border resolution, 73
Terrorism, 227
See also Antimoney laundering and combating the financing of terrorism requirements
TFEU. See Treaty on the Functioning of the European Union
TLAC. See Total loss absorbing capacity
TLAC Standard, 41
FSB on, 56, 88n15
on subsidiaries, 92
Too-big-to-fail syndrome, 27, 128
addressing, 30
cross-border resolution and, 55–56
elimination of, 50
further implementation steps for addressing, 48–50
regulatory reform and, 6–7
Total loss absorbing capacity (TLAC), 7, 64, 80
accumulation of, 100
bail-in strategy and, 38–48
BRRD and, 46
clean holding company requirements of, 40
in cross-border resolution, 87–95
disclosure of, 93–94
external, 40, 91
Federal Reserve Board on, 40
FSB on, 39–40
G-SIBs and, 88n14
internal, 40, 43, 91–92
location of, 90–91
MREL and, 46
operational liabilities and, 88–89
requirements for, 87–88
resolution entities and, 90–91
resolution groups and, 90–91
restrictions on, 93
SIFIs and, 38–48
standards, 42
surplus, 93
term sheets, 92n27
Toxic assets, Sharī’ah test and, 195
Transactional traffic banks, 271
Transparency CCPs and, 114–15
in Islamic finance, 196–97
Key Attributes for Effective Resolution on, 119n36
Treaty of Maastricht, 144
Treaty on the Functioning of the European Union (TFEU)
Article 3, 144
Article 123, 162n13
Article 127(1), 144
Article 127(4), 145
Article 127(5), 144
Article 127(6), 150
on ESCB, 144–45
Twin peaks approach, 245–46, 246n29
UK. See United Kingdom
UNCITRAL. See United Nations Commission on International Trade Law
Union of Arab Banks, 263–64, 277
United Banking Corporation, 178
United Kingdom (UK) bank supervisor liability, 179
financial crisis of 2008
response of, 32–33
resolution strategies in, 33
SPOE and, 36–38
United Nations Commission on International Trade Law (UNCITRAL), 96
Legislative Guide on Insolvency Law, 134
Model Law on Cross-Border Insolvency, 134
Working Group V, 135
United States financial crisis of 2008 response of, 30–32
secular jurisdiction in, 197
Universal approach, to cross-border resolution, 73
Uruguay, 161
Valuations, BoE on, 38
Value-at-risk models, 237
Variation margin gains haircutting, 110
Veto, power of, 184
Vitro case, 135
Volcker Rule, 42
Waterfall CCP, 109–11
defining, 108
loss allocation tools, 110
Wind-down powers, in Key Attributes for Effective Resolution, 88
Working Group on Deposit Insurance, 241
World Bank, 277
on corporate debt restructuring, 129
IFSB and, 247
on Islamic finance, 205
monitoring conducted by, 244–45
Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, 134
Zakat, 234