Search results

1 – 7 of 7
Article
Publication date: 1 June 2004

Hendrik Haag and Daniel Weiβ

Bonds governed under German law would normally not contain collective action clauses, ie provisions dealing with majority decisions by bondholders by which certain bond…

Abstract

Bonds governed under German law would normally not contain collective action clauses, ie provisions dealing with majority decisions by bondholders by which certain bond terms may be altered or waived. This is because it is uncertain whether, in the absence of a statutory basis, a decision taken by a majority of bondholders would be binding upon a dissenting minority. For certain circumstances, however, a statutory basis exists in the form of a law enacted in 1899 which, during the last decades, has been very rarely used. This paper discusses in what cases the law may be invoked, what decisions can be made by bondholders and what procedural requirements must be observed for getting to a binding and unchallengeable decision.

Details

Journal of Financial Regulation and Compliance, vol. 12 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Expert briefing
Publication date: 23 October 2020

However, rather than reject Lusaka's proposal, a group of creditors abstained from the vote, forcing an adjournment until November 13. That date coincides with the end of…

Article
Publication date: 1 February 1989

DONALD R. WELLS

Some economists who normally prefer to rely on free market solutions to economic problems often consider money a special good that requires government control to prevent…

Abstract

Some economists who normally prefer to rely on free market solutions to economic problems often consider money a special good that requires government control to prevent overissue. But free banking advocates take the position that the market can control the supply of money without any government imposed rule. The type of banking system envisioned by the latter school would be one in which banks would be subjected to no restrictions regarding balance sheet choices and would be allowed to charge what they want on loans and pay what the market dictated on any source of funds. Each bank would be free to issue distinctive banknotes as well as deposits redeemable into some reserve asset that banks would hold in accordance with their goal of profit maximization subject to the necessary liquidity cost. There would be no required reserve holding, no minimum amount of capital, nor any restrictions on the type of loans a bank could make, nor where they could establish branch offices. Government's only role would be to enforce contracts and to punish fraud.

Details

Studies in Economics and Finance, vol. 12 no. 2
Type: Research Article
ISSN: 1086-7376

Article
Publication date: 20 May 2020

Cillian Doyle and Jim Stewart

Ireland has become one of the main sources of finance for Russian based firms. The purpose of this paper is to quantify and analyse these flows to examine governance and…

Abstract

Purpose

Ireland has become one of the main sources of finance for Russian based firms. The purpose of this paper is to quantify and analyse these flows to examine governance and regulatory issues, in particular the possible effect of sanctions.

Design/methodology/approach

The paper is based on detailed searches of publicly available filings in Company House, Ireland to identify Russian connected conduits. Data was extracted from available accounts and prospectuses for 106 conduits operating in Ireland for some or all of the period 2005-2017.

Findings

The paper shows gross flows from Irish based conduits to Russian firms amounted to €118bn for 2005-2017; flows may be partly explained by round tripping; sanctions have also affected flows; flows are facilitated by close linkages with professional networks both within Ireland, and other offshore financial centres, especially London; The conduits examined have no employees and are mostly owned by a charitable trust or trust. They have become a major part of a largely unregulated shadow banking system.

Originality/value

This paper used searches of publicly available company filings to create a unique database of individual firms. Data on the use of financial centres by individual firms is hard to obtain and the results of this study may be indicative of the use and nature of conduits in other financial centres which form part of the shadow banking sector.

Details

critical perspectives on international business, vol. 17 no. 4
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 13 November 2017

Jim Stewart and Cillian Doyle

The purpose of this paper is to study financial vehicle corporations (FVCs) and other special purpose vehicles (SPVs) in Ireland.

Abstract

Purpose

The purpose of this paper is to study financial vehicle corporations (FVCs) and other special purpose vehicles (SPVs) in Ireland.

Design/methodology/approach

The paper is based on a database of FVCs that are a central part of the shadow banking sector in Ireland. The database is derived from a European Central Bank (ECB) list of securities and from filings in Company Registration Office, Dublin.

Findings

Tax concessions are very valuable and has resulted in zero or close-to-zero effective tax rates. Although described as “bankruptcy remote”, FVCs/ SPVs in Ireland are associated with several banks that failed. Central Bank data are inconsistent with revenue data and have resulted in regulatory gaps. The main economic benefit to Ireland consists of payments to certain service providers.

Research limitations/implications

A complete population of FVCs/SPVs has not been used. Ownership of FVCs/SPVs has not been identified with consequent implications for identifying risk to the sponsoring firm or guarantor.

Practical implications

The study indicates data deficiencies in Central Bank data, with consequent implications for regulation and measuring the size of the shadow banking sector, and failure of FVCs/SPVs described as bankruptcy remote.

Social implications

The shadow banking sector has been a key source of instability and risk transference in the recent past. Research and understanding is vital to prevent a future occurrence.

Originality/value

There are no publicly available databases of individual FVCs/SPVs in Ireland. Hence, research on granular data is limited. The study develops a database derived from lists of securities published by the ECB. The study also relies on a database derived from company house records.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

Case study
Publication date: 1 December 2011

Richard H. Borgman

In August 2007 the Mainsail II SIV-Lite was frozen by its trustee as a result of the ongoing credit crisis. The state of Maine held $20 million of Mainsail commercial…

Abstract

In August 2007 the Mainsail II SIV-Lite was frozen by its trustee as a result of the ongoing credit crisis. The state of Maine held $20 million of Mainsail commercial paper in its Cash Pool portfolio, a short-term portfolio that puts temporary, excess state revenues to work. When word of the potential loss became public, the Treasurer came under attack. The case introduces the functions of a state Treasury department, with particular emphasis on the investment objectives and guidelines for the cash pool as well as its composition. The case reviews the events leading up to and including August 2007, the month when the credit markets first began to seize and when the financial crisis effectively began. It examines securitization, structured finance, and the Mainsail SIV-Lite structure in some detail.

Details

The CASE Journal, vol. 8 no. 1
Type: Case Study
ISSN: 1544-9106

Case study
Publication date: 20 January 2017

David C. Smith, Larry G. Halperin and Michael Friedman

This case is taught at the University of Virginia McIntire School of Commerce in the fourth year course, “Corporate Restructuring.” The case is suitable for advanced…

Abstract

This case is taught at the University of Virginia McIntire School of Commerce in the fourth year course, “Corporate Restructuring.” The case is suitable for advanced undergraduates or MBS students that have already completed a course in corporate finance or valuation. The material would fit well in a second Corporate Finance class, particularly if the instructor would like to devote some time to discussing financial distress and restructuring. It could also work well in a business reorganization class at a law school. Danfurn LLC is a U.S. manufacturer and retailer of high-end furniture that is in financial distress following a 2007 LBO and subsequent declines in profitability in the wake of the financial crisis of 2007–08. The nearly 50-year-old company has recently blown through cash flow covenants on its $100 million senior financing facility and is seeking a restructuring of its capital structure that will allow the company to survive. Although Danfurn's lenders are hopeful that a consensual decision can be reached on how to restructure the company without resorting to a bankruptcy filing, filing for bankruptcy or even liquidating the company are very real possibilities. This case is an exercise in negotiating a consensual restructuring of a financially distressed company when stakeholders have varied incentives, legal rights, potential remedies, and interests in how the company will be managed going forward. The case discussion works best if students are divided into groups representing the different stakeholder groups—the senior lender, mezzanine lender, board, private equity owner, and founder interests—and are asked to think about how best to maximize their positions while recognizing the costs of failing to reach a negotiated outcome.

Details

Darden Business Publishing Cases, vol. no.
Type: Case Study
ISSN: 2474-7890
Published by: University of Virginia Darden School Foundation

Keywords

1 – 7 of 7