The February 1, 1988 draft of Article 4A (hereinafter referred to as 4A)1 of the Uniform Commercial Code (UCC) represents a fairly refined product of the drafting effort. It has been preceded by some half-dozen drafts and reflects a growing consensus that began with a December 1985 meeting of those interested in the subject.
It is a great pleasure for me to be able to speak to you about the legal questions arising out of the development of electronic funds transfer and, in particular, to tell you some about the work being carried out in this field by UNCITRAL, the acronym for the United Nations Commission on International Trade Law. The timing of this seminar could not have been more appropriate from our point of view, because in two months a working group of UNCITRAL will meet to examine a first draft of Model Rules for Electronic Funds Transfers that has been prepared by our secretariat. I must emphasize that this draft is the product of the secretariat; it has not as yet had any review by any committee or other intergovernmental body of UNCITRAL.* Nevertheless, its very existence and the fact that the process of considering it will begin in July are indications of the importance the subject has taken on and the response of UNCITRAL to some of the problems that are raised by this new phenomenon.
In 1968, at its first session, the United National Commission on International Trade Law (UNCITRAL) decided to make one of its priority projects the harmonization and unification of the law of international payments and, in particular, the law of negotiable instruments. In 1987, UNCITRAL formally adopted a final draft of its proposed Convention on International Bills of Exchange and International Promissory Notes* (hereinafter referred to as the “Convention”).1
Trade finance has long been an important component of international financial flows. Firms in emerging market economies, in particular, rely heavily on bank-financed trade credits to support their export and import activities. This book examines why and how much trade finance flows decline during financial crises, with case studies of several Asian and Latin American countries. The authors draw from the analysis to present options for mitigating trade finance declines in the event of future crises.
International Monetary Fund. External Relations Dept.
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“The Fund Agreement in the Courts” is the title of a series of publications by Sir Joseph Gold, who was General Counsel of the Fund until 1979 and is now a Senior Consultant to the Fund. The main theme of these publications is the recognition or nonrecognition of foreign exchange controls by domestic courts. This theme is now gaining a new momentum because of the debt crisis and will be the subject of these remarks.
International Monetary Fund. Independent Evaluation Office
Independent evaluation is widely regarded as an essential requirement in international financial institutions, contributing to increased transparency and accountability and strengthening the process of learning from experience. The IMF had a long tradition of internal evaluations of its operations and policies that were regularly submitted to the Executive Board and led to new directions on policy and procedure. However, it did not have a mechanism for independent evaluation of its activities until the establishment of the Independent Evaluation Office (IEO) by the Executive Board in the second half of 2001.
I have been asked to address this distinguished group on current problems and proposals relating to deposit insurance. The topic is clearly timely, for there has perhaps been no other time in the 55-year period of federal deposit insurance in this country when people have begun to question more seriously the proper role and function of deposit insurance, the adequacy of the deposit-insurance funds, and their role in the proper operation of our financial system.
As the lenders of last resort for financial systems, central bankers have reason to be concerned about the potential risks to domestic banking systems arising from actions that impose unforeseen liabilities on domestic banks. There seems to be a consensus that private sector participants in economic activities should bear the ultimate responsibility for the risks they assume in running their businesses. They consequently need to be able to predict and quantify the risks they are likely to encounter. Armed with these predictions they can draft contracts in such a way that they assume the risks that they are willing and able to assume, and shift the remaining risks to the other contracting party, which will bear responsibility for them. The ultimate test of such contracts is whether they accurately reflect the expectations of the parties and whether the courts will enforce them in accordance with their terms and with applicable law of the jurisdiction.