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Article

Larry D. Wall

This paper aims to highlight some of the more important changes in US prudential regulation and their implications for the operation of large foreign banking organizations

Abstract

Purpose

This paper aims to highlight some of the more important changes in US prudential regulation and their implications for the operation of large foreign banking organizations (FBOs) in the USA.

Design/methodology/approach

This paper begins with a summary of the regulatory status of FBOs prior to the crisis. It then discusses developments during the US financial crisis of 2007-2009 that motivated stricter US prudential regulation. The third part discusses some major post-crisis changes in prudential regulation. Finally, the paper considers two areas where important changes in US rules could not be applied in a straightforward manner to FBOs: non-bank financial subsidiaries and branches and agencies.

Findings

Most of the regulatory changes will enhance US financial stability, albeit in some cases at the cost of weakening FBOs consolidated risk management. However, a few of the regulatory changes have given foreign branches and agencies a significant competitive advantage in US money markets.

Originality/value

The paper provides an integrated analysis of both the why and the what of changes in US regulation with some discussion of the economic consequences.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

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Book part

Carl Pacini, William Hillison and Bradley K. Hobbs

Recent research has examined the effect of the Financial Services Modernization Act of 1999, more commonly known as the Gramm–Leach–Bliley Act (GLB), on the market value…

Abstract

Recent research has examined the effect of the Financial Services Modernization Act of 1999, more commonly known as the Gramm–Leach–Bliley Act (GLB), on the market value of U.S. commercial banks, life insurers, property-liability insurers, thrifts, finance companies, and securities firms. This study fills a gap in our understanding of the Act by measuring the price and trading volume effects of the GLB on U.S.-listed foreign banks. A primary contribution of this study is to examine the role, if any, of two corporate governance perspectives, the stakeholder (code law), and shareholder (common law) models, in a cross-sectional analysis of foreign bank market reaction to the GLB.

Using a generalized least squares (GLS) portfolio approach, Corrado's rank statistic, and confirmed by the traditional market model approach, we find significant negative share price reactions to certain legislative announcements surrounding the passage of the GLB. Trading volume reactions corroborate the significant share price responses. In general, our results indicate that investors in foreign banks reacted negatively to key legislative action. In a cross-sectional analysis, younger, higher-risk foreign banks with less concentrated ownership and more subordinated debt from countries with higher quality accounting standards appear to have more positive (or less negative) share price reactions.

Details

Research in Finance
Type: Book
ISBN: 978-1-84950-441-6

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Article

Mohamed Karim Sorour and Kerry E. Howell

The purpose of this paper is to investigate corporate governance (CG) practices of banking organizations in Egypt and seeks to understand the extent these can be…

Abstract

Purpose

The purpose of this paper is to investigate corporate governance (CG) practices of banking organizations in Egypt and seeks to understand the extent these can be considered socially constructed phenomenon.

Design/methodology/approach

Through a qualitative research design underpinned by a combination of phenomenological and social constructivist paradigms the paper undertakes a grounded theory study of CG in a specific context (the Egyptian banking sector). The paper is based on a survey and 58 semi-structured interviews.

Findings

CG as a dynamic and context-based phenomenon, which requires a processual mode of analysis rather than the widely accepted static approach. Empirical evidence that concerns whether the adoption of CG is based on achieving legitimacy is provided, which identifies that this is difficult to understand through traditional shareholder-stakeholder theories; economic rationality and efficiency fail to fully explain CG and investigation requires phenomenological constructivist approaches. Relationships between substantive and formal theories are identified and explored.

Practical implications

Identification of the structural factors affecting CG in Egyptian banking, the processes involved for its handling and the consequences of the interaction between these areas provide policy-makers with an in-depth understanding which is necessary for effective governance reform. Through memos, coding and categorization the relationships between substantive theory and practice are rendered explicit.

Originality/value

The paper demonstrates that through a phenomenological constructivist perspective a qualitative research design can offer new insights into CG phenomenon. The paper heeds calls for empirical research in CG that takes into account the institutional environment within which it is embedded.

Details

Qualitative Research Journal, vol. 13 no. 3
Type: Research Article
ISSN: 1443-9883

Keywords

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Article

Thomas W. Thompson

The strategic marketing response to deregulation is discussed, in particular to interstate banking, to the growing similarity between banks, thrift institutions and non…

Abstract

The strategic marketing response to deregulation is discussed, in particular to interstate banking, to the growing similarity between banks, thrift institutions and non‐banks and to the greater operational freedom implicit in technological change.

Details

International Journal of Bank Marketing, vol. 1 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

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Article

Roger S. Wise and Mary Burke Baker

The purpose of this paper is to explain the proposed Foreign Account Tax Compliance Act (FATCA) regulations released on February 8, 2012 by the US Treasury Department and…

Abstract

Purpose

The purpose of this paper is to explain the proposed Foreign Account Tax Compliance Act (FATCA) regulations released on February 8, 2012 by the US Treasury Department and the Internal Revenue Service (IRS).

Design/methodology/approach

The paper provides an overview of the changes to prior FATCA guidance in the proposed regulations, including the definition of a foreign financial institution (FFI), due diligence requirements to identify US accounts, procedures to verify compliance, phase‐in information required to be reported, verification procedures, definitions of FFIs that are “deemed” to meet the FATCA requirements, definition of “passthru” payments, explanation of exemptions from withholding related to certain “grandfathered obligations,” temporary relief for FFIs with non‐compliant affiliates, and a proposed intergovernmental approach to FATCA implementation through domestic reporting and reciprocal automatic exchange of information.

Findings

The paper reveals that the FATCA grew out of Congressional concern that US taxpayers were evading taxes by failing to report US‐source income on assets held abroad. The FATCA legislation left many of the details on implementation to the US Treasury and IRS. The intergovernmental framework is not a done deal. The proposed reciprocal, automatic exchange of information would be a sea change from existing US information reporting practices and is sure to be controversial.

Originality/value

The paper provides expert guidance from experienced financial institutions lawyers.

Details

Journal of Investment Compliance, vol. 13 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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Article

Ya‐Yueh Shih and Kwoting Fang

With the liberalization and internalization of financial markets, in terms of the entrance of the World Trade Organization, banks in Taiwan face pressures in service…

Abstract

With the liberalization and internalization of financial markets, in terms of the entrance of the World Trade Organization, banks in Taiwan face pressures in service quality and administrative efficiency. Predicting customers’ intention to adopt Internet banking is an important issue. Attempts to understand how an individual's belief, embracing attitude, subjective norm and perceived behavioral control, can influence intention. Two versions of the model of the theory of planned behavior (TPB) – pure and decomposed – are examined and compared to the theory of reasoned action (TRA). Data are collected from approximately 425 respondents and structural equation modeling is used to analyze the responses. Results generally support TRA and TPB and provide a good fit to the data.

Details

Internet Research, vol. 14 no. 3
Type: Research Article
ISSN: 1066-2243

Keywords

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Article

Dina ElYacoubi

The purpose of this paper is to unpack the customer due diligence (CDD) vulnerabilities and to examine and analyze the UAE specific dynamics that make the country exposed…

Abstract

Purpose

The purpose of this paper is to unpack the customer due diligence (CDD) vulnerabilities and to examine and analyze the UAE specific dynamics that make the country exposed to these threats. This research also intends to put on the table suitable solutions and remedial action steps that the UAE government, regulators and financial institutions (FIs) can adopt.

Design/methodology/approach

This study is qualitative in nature.

Findings

Despite the impressive regulatory framework and the satisfactory practices by FIs, there still remains some UAE specific challenges that make it difficult to undertake CDD for certain customers. The challenges that were identified include difficulties in Arabic names, complications in identifying the beneficial owners, impediments in establishing the source of wealth/funds, concerns with politically exposed persons, the increasing cost of compliance that resulted in a pattern of de-risking within FIs.

Research limitations/implications

The international bodies whose mandate is to formulate the necessary anti-money laundering and combating the financing of terrorism policies and regulations for global implementation together with Association of Certified Anti-Money Laundering Specialists (ACAMS) have published sufficient studies on CDD-related issues in the UAE. Yet on the other hand, very limited literature was found by independent scholars. This paper will, therefore, largely reference publications by Financial Action Task Force, the International Narcotics Control Strategy Report and ACAMS. It will also include works by respected law firms that have operations in the UAE, local publications, government documents, academic papers by the International Monetary Fund and the World Bank, legal journals and others.

Originality/value

Illicit actors exploit the UAE’s relatively open business environment, a multitude of global banks and exchange houses and global transportation links to undertake illicit financial activity […] the UAE does not have any major anti-money laundering (AML) deficiencies. However, the monitoring of FIs for AML purposes, particularly in the area of CDD, could be improved. This paper unpacks the CDD vulnerabilities and analyzes the UAE specific dynamics that make the country exposed to these threats. This research also puts on the table suitable remedial action steps that the UAE government, regulators and FIs can adopt.

Details

Journal of Money Laundering Control, vol. 23 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

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Article

Kristen M. Garry, Etienne Gelencsér, Eileen M. O’Pray, Naomi King and Jeffrey B. Tate

– To summarize the principal aspects of USA tax legislation commonly known as the “Foreign Account Tax Compliance Act” (“FATCA”) that may be relevant to non-USA investment funds.

Abstract

Purpose

To summarize the principal aspects of USA tax legislation commonly known as the “Foreign Account Tax Compliance Act” (“FATCA”) that may be relevant to non-USA investment funds.

Design/methodology/approach

Reviews the potential application of FATCA to non-USA investment funds in a question-and-answer format and summarizes the key FATCA compliance obligations that may apply to such funds.

Findings

FATCA presents a number of compliance and operational challenges for non-USA investment funds. Such funds should be aware of their status under FATCA and resulting compliance responsibilities to ensure that they are compliant with FATCA and thus not subject to USA withholding tax.

Originality/value

Practical guidance from experienced tax and investment funds lawyers that summarizes a complex body of law in a concise format.

Details

Journal of Investment Compliance, vol. 15 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

Abstract

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 3
Type: Research Article
ISSN: 1358-1988

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Article

Brian L. Rubin, Carmen L. Brun, Jaliya Stewart Faulkner, Michael K. Freedman, Kurt Lentz and Jae C. Yoon

The purpose of this paper us to summarize the remarks of the Commissioners and participants in several panel sessions and workshops during the 2013 annual “SEC Speaks”…

Abstract

Purpose

The purpose of this paper us to summarize the remarks of the Commissioners and participants in several panel sessions and workshops during the 2013 annual “SEC Speaks” conference held by the Practising Law Institute in cooperation with the US Securities and Exchange Commission, discussing the SEC's accomplishments in 2012 and its agenda for 2013.

Design/methodology/approach

The paper summarizes remarks by Chairman Walter and Commissioners Aguilar, Paredes, and Gallagher; provides highlights from panel sessions and workshops concerning the Division of Corporation Finance, the Division of Trading and Markets, the Division of Enforcement, the Division of Investment Management, the Office of Compliance Inspections and Examinations as well as highlights from the panel sessions relating to Accounting, Risk, Strategy and Financial Innovation. Judicial and Legislative Developments, and Ethics.

Findings

The summaries provide an overview of the SEC's most important current rulemaking, projects and policy priorities.

Originality/value

The paper presents current SEC issues and developments addressed by experienced SEC lawyers.

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