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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 32 items for :

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  • Corporation and Securities Law x
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Cover FinTech Notes
Private Law Aspects of Token-Based Central Bank Digital Currencies
Marianne Bechara
,
Wouter Bossu
,
Amira Rasekh
,
Chia Yi Tan
, and
Akihiro Yoshinaga
In designing central bank digital currencies (CBDCs), it is imperative that central banks carefully consider its legal foundations. As with any form of money, CBDCs require a solid basis under public and private law to provide it with the necessary legal certainty and political support that will underpin its wide circulation. This Fintech Note examines the private law aspects of token-based CBDC primarily intended for retail use. It follows a previous IMF working paper that examines the legal foundations of CBDC under central bank law and its treatment under monetary law—the main public law aspects of CBDC.
Keywords:
Token-Based CBDC; Private Law; Central Bank Digital Currencies; Legal Framework; Ownership Rights; Transfer Mechanisms; Financial Intermediaries
Cover IMF Staff Country Reports
Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Securities Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper describes a technical note on securities regulation and supervision in The Netherlands. Regulation of securities and derivatives markets in the European Union (EU) has changed materially since the last Netherlands Financial Sector Assessment Program (FSAP), with further reforms underway. The securities market landscape in the Netherlands has also changed markedly since the last FSAP, largely in response to Brexit. The Netherlands is now of EU-wide significance in relation to the trading of securities, particularly equities, which has brought challenges for the national authorities. Further enhancements of its approach and a continuing focus on trading system operational resilience are now needed. The established venues are growing and diversifying their offerings, and ‘fintech’ new entrants with business models combining trading and post-trading operations in new ways are on the horizon. Enhancements to the legislative framework are now needed to ensure that the Autoriteit Financiële Markten can continue to supervise efficiently and effectively an expanded and more diverse market, and to engage credibly with international counterparts.
Keywords:
trading venue; managers directive; markets authority; trading obligation; money market funds; Financial Sector Assessment Program; Liquidity management; Liquidity; Liquidity risk; Financial derivatives; Europe; Global
Cover IMF Working Papers
Pledged Collateral Market's Role in Transmission to Short-Term Market Rates
Mr. Manmohan Singh
and
Rohit Goel
In global financial centers, short-term market rates are effectively determined in the pledged collateral market, where banks and other financial institutions exchange collateral (such as bonds and equities) for money. Furthermore, the use of long-dated securities as collateral for short tenors—or example, in securities-lending and repo markets, and prime brokerage funding—impacts the risk premia (or moneyness) along the yield curve. In this paper, we deploy a methodology to show that transactions using long dated collateral also affect short-term market rates. Our results suggest that the unwind of central bank balance sheets will likely strengthen the monetary policy transmission, as dealer balance-sheet space is now relatively less constrained, with a rebound in collateral reuse.
Keywords:
WP; rate; central bank; balance sheet; market; central banks balance sheet; monetary policy transmission; collateral velocity; excess reserves; policy rate hike; market rate; securities lender; utility value; collateral market; reverse repo; transmission mechanism; overnight market rate; securities lending; short-term market rate; Collateral; Central bank balance sheet; Financial statements; Securities; Bonds; Global
Cover IMF Working Papers
The Morning After--The Impact on Collateral Supply After a Major Default
Dermot Turing
and
Mr. Manmohan Singh
Changes to the regulatory system introduced after the financial crisis include not only mandatory clearing of OTC derivatives at central counterparties and margining of uncleared derivatives, but also prudential measures, including notably a “Liquidity Coverage Ratio” which obliges firms to set aside high-quality liquid assets (HQLA) as a stopgap against anticipated cash outflows. We examine factors which may affect the demand for HQLA in a severely stressed market following a hypothetical default of a major clearing member. Immediately following a major default, the amount of HQLA demanded by the whole market would spike. We estimate the size of the spike and draw conclusions as to whether the depth of the market is adequate to absorb it.
Keywords:
WP; U.S. dollar; liquidity coverage requirement; class clearing members; derivative trade; initial margin increase; market participant; unreceived variation margin due; variation margin amount; HQLA; clearing; liquidity; derivatives; default; CCPs; liquidity coverage ratio; VMGH; initial margin hike; capital requirement; overall-market impact; default fund contribution; B. initial margin; Collateral; Central counterparty clearing house; Liquidity requirements; Currencies; Global; Europe
Cover IMF Working Papers
The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment
Nazim Belhocine
,
Mr. Daniel Garcia-Macia
, and
Jose M Garrido
The modernization of Italy’s insolvency framework has been the subject of much interest in recent years, related not least to its role in potentially facilitating an efficient allocation of resources. A unique feature of Italy’s insolvency framework is a special regime for large enterprises known as “extraordinary administration”. This paper evaluates the merits of this special regime by assessing its efficacy and success in achieving its stated goals and comparing its features to international standards and best practices. It finds that the special regime tends to impose large costs on creditors and the state. The regime results, in most cases, in the sale of parts of the group, followed by a liquidation phase of the remaining assets which can take longer than the general regime, hindering legal certainty for creditors and more generally economic efficiency, investment and job creation. Based on international best practices and experience, consideration should be given to folding the special regime into the general insolvency regime, possibly with provisions to allow for state intervention in specific well-defined circumstances.
Keywords:
special insolvency regime; extraordinary administration; bankruptcy of large enterprises; insolvency regime; State aid; company group level; enterprise court; competition authorities; Marzano firm; large enterprise; business activity; aid support; State guarantee; restructuring company; Administration in revenue administration; Solvency; Special resolution regime; Corporate insolvency; Employment; Europe
Cover IMF Working Papers
Central Counterparties Resolution—An Unresolved Problem
Mr. Manmohan Singh
and
Dermot Turing
Recovery and resolution regimes are being developed for central counterparties (CCPs). We analyse current resolution tools in the context of policy, which is to restore the critical functions of a failed CCP. We conclude that the toolkit is insufficient to avoid the costs of resolution being borne by taxpayers, and propose alternative policy suggestions for addressing the problem of a failed CCP.
Keywords:
WP; risk model; CCP resolution; reserves policy; parent company; CCP default; CCP resolution and recovery; VMGH; collateral; NCWO; FSB; ISDA; waterfall resource; variation margin; bridge CCP; CCP difficulty; CCP failure; transferee CCP; CCP market; Central counterparty clearing house; Bank resolution framework; Crisis resolution; Bank resolution; Europe; Global
Cover IMF Working Papers
Leverage—A Broader View
Mr. Manmohan Singh
and
Zohair Alam
Traditional measures of leverage in the financial system tend to reflect bank balance sheet data. The paper argues that these traditional, bank-centric measures should be augmented by considering pledged collateral in the financial system since pledged collateral provides a measure of an important part of nonbank funding to banks. From a policy perspective, the paper suggests that a broader view on leverage will enhance our understanding of global systemic risk, and complement the theoretical work in this field by providing a link from micro-level leverage data to macro aggregates such as credit to the economy.
Keywords:
WP; bank-nonbank nexus; nonbank-bank nexus; nonbank relationship; nonbank leverage; nonbank funding; regulations; financial stability; leverage ratio; off-balance sheet; pledged collateral; bank leverage; Financial statements; Collateral; Commercial banks; Accounting standards; Bank credit; Global
Cover IMF Working Papers
Central Bank Balance Sheet Policies and Spillovers to Emerging Markets
Mr. Manmohan Singh
and
Haobin Wang
We develop a theoretical model that shows that in the near future, the monetary policies of some key central banks in advanced economies (AEs) will have two dimensions—changes in short-term policy rates and balance sheet adjustments. This will affect emerging market economies (EMs), especially those with a pegged exchange rate, as these EMs primarily use a single monetary policy tool, i.e., the short-term policy rate. We show that changes in policy rates and balance sheet adjustments in AEs may differ in their respective financial spillovers to pegged EMs. Thus, it will be difficult for EMs to mitigate different types of spillovers with a single monetary policy tool. In that context, we use the model to show how EMs might use additional tools—capital controls and/or macro-prudential policy—to complement their monetary policy and financial stability toolkit. We also discuss how balance sheet adjustments that affect long-term interest rates may percolate to influence short-term interest rates via financial plumbing.
Keywords:
WP; central bank; balance sheet; monetary policy; financial spillovers; collateral; RRP (reverse repo program); fed funds rate; General Collateral Finance (GCF rate); macro-prudential; capital control; quantitative easing; AE central bank; asset purchase; AE agent; excess reserves; policy rate; Financial statements; Central bank policy rate; Unconventional monetary policies; Capital controls; Global
Cover IMF Working Papers
Collateral Reuse and Balance Sheet Space
Mr. Manmohan Singh
Transactions on wholesale capital markets are often secured by marketable collateral. However, collateral needs balance sheet space to move within the financial system. Certain new regulations that constrain private sector bank balance sheets may have the effect of impeding collateral flows. This may have important consequences for monetary policy transmission, for short term money market functioning, and for market liquidity. In this context (and in contrast to the literature, which has focused mainly on the repo market), this paper analyzes securities-lending, derivatives, and prime-brokerage markets as suppliers of collateral. It highlights the incentives created by new regulations for different suppliers of collateral. Moreover, it argues that the central banks should be mindful of the effect of their actions on the ability of markets to intermediate collateral.
Keywords:
WP; repo market; securities lending; market liquidity; dealer bank; nonbank intermediation; collateral velocity; prime brokerage; OTC derivatives; repo; reverse repo; market plumbing; market practice; market volatility concern; market participant; OTC derivatives market; TPR market; Collateral; Financial statements; Securities; Hedge funds; Central bank balance sheet; Global
Cover IMF Working Papers
Resolving China’s Corporate Debt Problem
Wojciech Maliszewski
,
Mr. Serkan Arslanalp
,
Mr. John C Caparusso
,
Jose M Garrido
,
Mr. Si Guo
,
Mr. Joong S Kang
,
Mr. Waikei R Lam
,
Daniel Law
,
Wei Liao
,
Ms. Nadia Rendak
,
Mr. Philippe Wingender
,
Jiangyan Yu
, and
Ms. Longmei Zhang
Corporate credit growth in China has been excessive in recent years. This credit boom is related to the large increase in investment after the Global Financial Crisis. Investment efficiency has fallen and the financial performance of corporates has deteriorated steadily, affecting asset quality in financial institutions. The corporate debt problem should be addressed urgently with a comprehensive strategy. Key elements should include identifying companies in financial difficulties, proactively recognizing losses in the financial system, burden sharing, corporate restructuring and governance reform, hardening budget constraints, and facilitating market entry. A proactive strategy would trade off short-term economic pain for larger longer-term gain.
Keywords:
WP; construction boom; bond market; credit growth; People's Bank of China; coverage ratio; market forces; Corporate Debt Overhang; Credit; Restructuring; Hardening Budget Constraints; credit boom; credit efficiency; credit financing; shadow credit product; Loans; Credit booms; Solvency; Government liabilities; Global