The papers published in this volume are based on an IMF seminar held in 1988 covering a broad range of topics dealing with monetary and financial law. Topics presented at the seminar focused on the liberalization of capital movements, data dissemination, the IMF's goals in financial surveillance and architecture, and responses to the financial crises in Asia and Latin America. Recent issues in the financial sector were addressed including the supervision of banks and the major international effort- the Basle Core Principles of Banking Supervision. Updates on insolvency and liquidation of banks as well as lender-of-last-resort issues were presented along with how payment systems are adjusting to continuous financial modernization and the resulting legal issues. The activities of the European Economic and Monetary Union (EMU) were discussed from several viewpoints as was the issue of good governance. Information was also provided on the developments in the enforcement of bank claims and the law of security.
Current Developments in Monetary and Financial Law
Cover design and figures: Luisa Menjivar-Macdonald
Typesetting: Jack Federici
Current developments in monetary and financial law / Legal Department.—Washington, D.C. : International Monetary Fund.
v. ; cm.
Papers based on a seminar held in 1998, organized by the Legal Department of the IMF and the IMF Institute.
Includes bibliographical references.
1. Banking law—Congresses. 2. Monetary policy—Law and legislation—Congresses. 3. Financial policy—Law and legislation—Congresses. 4. Financial crises—Congresses. 5. Banks and banking—State supervision—Congresses. 6. Banks and banking, International—Congresses. 7. Banks and banking, Central—Congresses. 8. Economic and Monetary Union—Congresses. 9. Payment systems—Congresses. I. International Monetary Fund. Legal Dept. II. IMF Institute.
4 Recent Financial Crises—Comments from International Development Banks
4A. The World Bank’s Response to the Latin America and East Asia Crises
4B. Recent Financial Crises and the Inter-American Development Bank
Herbert V. Morais
FINANCIAL SECTOR DEVELOPMENTS
5 Prudential Supervision of Banks and the Basle Core Principles
Chester B. Feldberg
6 Legal Aspects of Bank Insolvency
Tobias M. C. Asser
7 Lender-of-Last-Resort Issues—Past, Present, and Future
Thomas C. Baxter, Jr. and Joseph H. Sommer
William A. Ryback
8 Government Securities
8A. Regulation of Participants and Transactions in the U.S. Government Securities Market
8B. Organization of Open Market Operations in the United States
9 Legal Risk in the Securities Settlement System
James Steven Rogers
10 Clearing and Settlement of Book-Entry Securities Transactions
Richard B. Smith
11 The Economic and Monetary Union
11A. The Economic and Monetary Union and the Introduction of the Euro
Antonio Sainz de Vicuña
11B. Institutional Aspects of the European Central Bank
Antonio Sainz de Vicuña
11C. The Economic and Monetary Union and the International Monetary Fund
Jacques J. Polak
12 Financial Conglomerates
12A. Financial Conglomerates: Securities Industry Perspective
12B. Financial Conglomerates: Trends in Regulation
12C. Financial Conglomerates: Banking Industry Perspective
John D. Hawke, Jr.
13 Financial Modernization
13A. Current Financial Modernization Proposals in the United States
J. Virgil Mattingly and Kieran J. Fallon
13B. Financial System Modernization in Emerging Markets: Asia and Latin America
14 Good Governance and Commercial Banks
Gary M. Welsh
15 Anti-Money-Laundering Policies—Selected Legal, Political, and Economic Issues
Richard K. Gordon
16 Pyramid Schemes
Debra A. Valentine
Henry N. Schiffman
Robert D. Strahota and Lucee S. Kirka
17 Enforcement of Bank Claims and the Law of Security
18 Enforcement of Bank Claims in Switzerland—Pledge, Set-off, and Immunity
GOVERNANCE OF THE CENTRAL BANK
19 Accountability of the Central Bank for Monetary Policy
20 Financial Accountability of the Central Bank—Internal and External Controls
Tobias M. C. Asser
21 External Review of Decisions by Central Banks
Geoffrey P. Miller
Douglas H. Jones
PAYMENT SYSTEM DEVELOPMENTS
22 E-Money and Data Privacy
Thomas P. Vartanian
23 Remarks on the Report of the Consumer Electronic Payments Task Force
Walter A. Effross
I 1. EC Council Regulation on Certain Provisions Relating to the Introduction of the Euro, No 1103/97 of 17 June 1997
2. EC Council Regulation on Certain Provisions Relating to the Introduction of the Euro, No 974/98 of 3 May 1998
II The Forty Recommendations of the Financial Action Task Force on Money Laundering
III United Nations Convention on Independent Guarantees and Stand-By Letters of Credit
IV UNCITRAL Model Law on Electronic Commerce
Beginning in 1988, the Legal Department and the Institute of the IMF have been organizing seminars for central banks’ legal advisers. These seminars, attended by about 40 participants, are held every two years at the IMF’s headquarters in Washington, D.C. During the seminars, communications are presented by officials of the IMF and other international organizations, officials of central banks and regulatory agencies, representatives of the banking industry and, more generally, the private sector, scholars, economists, lawyers, etc. Most of these communications are subsequently published by the IMF with the understanding that the authors are expressing their own views, which should not be attributed to the IMF or to any institution with which any are affiliated.
The papers published in this volume reflect or are based on communications made at the sixth seminar, which was held in 1998. Although intended for central bank officials, this seminar covered such a broad range of topics dealing with monetary and financial law that the title of the first five volumes (Current Legal Issues Affecting Central Banks) seemed rather inappropriate. Hence, this book is the beginning of a new series under a different title. Presentations on developments at the IMF focused on the liberalization of capital movements, data dissemination, the IMF’s goals in financial surveillance and architecture, and responses to the financial crises in Asia and Latin America. Regarding recent issues in the financial sector, speakers addressed supervision of banks, including the major international effort—the Basle Core Principles of Banking Supervision. Updates on insolvency and liquidation of banks as well as lender-of-last-resort issues were presented along with how payment systems are adjusting to continuous financial modernization and the resulting legal issues.
Of particular interest in the seminar were the activities of the European Economic and Monetary Union (EMU), which were discussed from several viewpoints. These included the introduction of the euro, institutional aspects of the European Central Bank, and whether membership in the EMU could affect member countries’ rights and obligations with the IMF. Analysis was also provided of what commercial activity may look like in this new and important marketplace.
Good governance continues to be a major concern of the IMF. In addition to addressing accountability issues of the central bank, participants expressed views on criminal conduct arising from money laundering and pyramid schemes. Information was also provided on developments in the enforcement of bank claims and the law of security.
For the convenience of the reader, this volume includes as appendices the EC Council regulations on the introduction of the euro, the UNCITRAL Model Law on electronic commerce, the 40 recommendations of the Financial Action Task Force on money laundering, and the U.N. Convention on independent guarantees and stand-by letters of credit.
I wish to express our gratitude to a number of people for organizing the seminar and for their work on this publication. Robert Effros, former Assistant General Counsel in the Legal Department, played a key role in the seminar’s preparation and served as its moderator. David Driscoll and Martha Bonilla of the External Relations Department and Rachel Ray of the Legal Department provided editorial expertise. Carmen Tirbany, an assistant to Mr. Effros, contributed to the seminar and to this publication. Joyce White also assisted on the publication. Finally, many thanks go to David Cheney of the External Relations Department and to members of the IMF Institute without whose support and guidance the seminar and this publication would not have been possible.