Bankers Without Borders Implications Of Ring Fencing For European Cross Border Banks

Author : Ms.Anna Ilyina
Publisher : International Monetary Fund
ISBN 13 : 1455209473
Total Pages : 37 pages
Book Rating : 4.77/5 ( download)

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Download or read book Bankers Without Borders? Implications of Ring-Fencing for European Cross-Border Banks written by Ms.Anna Ilyina and published by International Monetary Fund. This book was released on 2010-11-01 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a stylized analysis of the effects of ring-fencing (i.e., different restrictions on cross-border transfers of excess profits and/or capital between a parent bank and its subsidiaries located in different jurisdictions) on cross-border banks. Using a sample of 25 large European banking groups with subsidiaries in Central, Eastern and Southern Europe (CESE), we analyze the impact of a CESE credit shock on the capital buffers needed by the sample banking groups under different forms of ring-fencing. Our simulations show that under stricter forms of ring-fencing, sample banking groups have substantially larger needs for capital buffers at the parent and/or subsidiary level than under less strict (or in the absence of any) ring-fencing.

Author : Franklin Allen
Publisher : CEPR
ISBN 13 : 1907142363
Total Pages : 117 pages
Book Rating : 4.69/5 ( download)

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Download or read book Cross-border Banking in Europe written by Franklin Allen and published by CEPR. This book was released on 2011 with total page 117 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report argues that policy reforms in micro- and macro-prudential regulation and macroeconomic policies are needed for Europe to reap the important diversification and efficiency benefits from cross-border banking, while reducing the risks stemming from large cross-border banks.Available online as pdf at: http: //www.cepr.org/pubs/books/CEPR/cross-border_banking.pd

Author : Gerard Caprio
Publisher : World Scientific
ISBN 13 : 9812568298
Total Pages : 491 pages
Book Rating : 4.98/5 ( download)

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Download or read book Cross-border Banking written by Gerard Caprio and published by World Scientific. This book was released on 2006 with total page 491 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cross-border banking, while having the potential for a more efficient financial sector, also creates potential challenges for bank supervisors and regulators. This volume discusses topics that include: the landscape of cross-border bank activity, the resulting competitive implications, emerging challenges for prudential regulation, and more. Cross-border banking, while having the potential for a more efficient financial sector, also creates potential challenges for bank supervisors and regulators. It requires cooperation by regulatory authorities across jurisdictions and a clear delineation of authority and responsibility. That delineation is typically not present and regulatory authorities often have significantly different incentives to respond when cross-border-active banks encounter difficulties. Most of these issues have only begun to be seriously evaluated. This volume, one of the first attempts to address these issues, brings together experts and regulators from different countries. The wide range of topics discussed include: the current landscape of cross-border bank activity, the resulting competitive implications, emerging challenges for prudential regulation, safety net concerns, failure resolution issues, and the potential future evolution of international banking.

Author : Katia D'Hulster
Publisher :
ISBN 13 :
Total Pages : 19 pages
Book Rating : 4.09/5 ( download)

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Download or read book Ring-Fencing Cross-Border Banks written by Katia D'Hulster and published by . This book was released on 2018 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: While international policymakers are making good progress on the important work of global resolution and the preparation of recovery and resolution plans, a growing number of supervisors, home as well as hosts, are resorting to territorial approaches. Higher capital ratios, dividend restrictions, restrictions on liquidity flows and even forced subsidiarization are gaining renewed popularity. The objective of these territorial approaches is to protect the interests of the domestic stakeholders of a foreign bank and to limit the effects of cross-border contagion. This type of “ring-fencing” has a negative connotation as it comes at a cost for banks and the efficiency of the overall global financial system. This article addresses the following questions:(1) What makes prudential supervisors more likely to ring-fence?; (2) Do all forms of ring-fencing really deserve this bad reputation?; (3) What are the risks that these measures are addressing and which instruments have been used?; and (4) What are the implications of ring-fencing for the banking group, financial stability in the home and host country, as well as global financial stability?

Author : Katia D'Hulster
Publisher :
ISBN 13 :
Total Pages : 25 pages
Book Rating : 4.58/5 ( download)

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Download or read book Ring-Fencing Cross-Border Banks written by Katia D'Hulster and published by . This book was released on 2014 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Territorial bias or home bias refers to the degree of geographical separation of the local operations of a cross border banking group from its foreign parent bank or affiliates to protect the local operations from cross-border contagion. The purpose of this paper is to measure and rank territorial bias in prudential banking regulation and supervision in 22 European Union (EU) and non-EU countries with financial systems predominantly owned by foreign banks. First, a scoring system is developed to measure territorial bias on an individual country basis (vertical analysis). Second, the results are compared across two peer groups, EU and non-EU (horizontal analysis). I find that territorial bias is present to a varying degree in the prudential supervision and the regulations of the countries surveyed. On average higher territorial bias is observed in the non-EU group. Generally, there is also less dispersion in the EU, which can be explained by a more unified regulatory framework and the efforts to achieve supervisory convergence. Non-EU countries also use a wider array of instruments; typically higher capital ratios, mandatory conversion from systemic branches to subsidiaries, stricter local governance requirements, and liquidity restrictions. This is the first analysis and quantification of territorial bias in bank supervision and regulation.

Author : José Vinãls
Publisher : International Monetary Fund
ISBN 13 : 1484340949
Total Pages : 27 pages
Book Rating : 4.43/5 ( download)

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Download or read book Creating a Safer Financial System written by José Vinãls and published by International Monetary Fund. This book was released on 2013-05-14 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms (e.g., Basel 3 and G-SIFI surcharges), these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. This may exacerbate cross-border regulatory arbitrage and put a further burden on consolidated supervision and cross-border resolution. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1498343287
Total Pages : 41 pages
Book Rating : 4.82/5 ( download)

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Download or read book Cross-Border Bank Resolution - Recent Developments written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-02-06 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developing an effective framework for cross-border resolution is a key priority in international regulatory reform. Large bank failures during the global financial crisis brought home the lack of adequate tools for resolving “too-big-to-fail” institutions. In cross-border cases, misaligned incentives and lack of robust mechanisms for resolution and cross-border cooperation left some country authorities with little choice but to take unilateral actions, which contributed to the high fiscal costs of the crisis and resulted in disorderly resolution in some cases

Author : Mr.Eugenio Cerutti
Publisher : International Monetary Fund
ISBN 13 : 1498354785
Total Pages : 38 pages
Book Rating : 4.83/5 ( download)

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Download or read book The Great Cross-Border Bank Deleveraging written by Mr.Eugenio Cerutti and published by International Monetary Fund. This book was released on 2014-09-25 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: International banks greatly reduced their direct cross-border and local affiliates’ lending as the global financial crisis strained balance sheets, lowered borrower demand, and changed government policies. Using bilateral, lender-borrower countrydata and controlling for credit demand, we show that reductions largely varied in line with markets’ prior assessments of banks’ vulnerabilities, with banks’ financial statement variables and lender-borrower country characteristics playing minor roles. We find evidence that moving resources within banking groups became more restricted as drivers of reductions in direct cross-border loans differ from those for local affiliates’ lending, especially for impaired banking systems. Home bias induced by government interventions, however, affected both equally.

Author :
Publisher :
ISBN 13 : 9781475547979
Total Pages : 102 pages
Book Rating : 4.78/5 ( download)

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Download or read book Pan-African Banks written by and published by . This book was released on 2015 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pan-African banks are expanding rapidly across the continent, creating cross-border networks, and having a systemic presence in the banking sectors of many Sub-Saharan African countries. These banking groups are fostering financial development and economic integration, stimulating competition and efficiency, introducing product innovation and modern management and information systems, and bringing higher skills and expertise to host countries. At the same time, the rise of pan-African banks presents new challenges for regulators and supervisors. As networks expand, new channels for transmission of macro-financial risks and spillovers across home and host countries may emerge. To ensure that the gains from cross border banking are sustained and avoid raising financial stability risks, enhanced cross-border cooperation on regulatory and supervisory oversight is needed, in particular to support effective supervision on a consolidated basis. This paper takes stock of the development of pan-African banking groups; identifies regulatory, supervisory and resolution gaps; and suggests how the IMF can help the authorities address the related challenges.

Author : Jens-Hinrich Binder
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.87/5 ( download)

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Download or read book To Ring-Fence Or Not, and How? Strategic Questions for Post-Crisis Banking Reform in Europe written by Jens-Hinrich Binder and published by . This book was released on 2015 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the proposals of the United Kingdom's Independent Commission on Banking (now enacted in legislation), the “ring-fencing” of core banking functions and their legal and commercial insulation against the risks emanating from investment banking has attracted wide-spread attention in both academic and regulatory circles world-wide. This concept is but one emanation of a broader move towards the segregation of commercial and investment banking, which is being accomplished in the United States under the so-called “Volcker Rule” (Dodd-Frank Act, § 619), in a number of Continental European jurisdictions under national legislation since 2012, and promoted within Europe by the recommendations of the Liikanen commission and a recent draft for an EU Regulation on structural measures improving the resilience of EU credit institutions. Moreover, the term has been used to describe older regulatory strategies employed by host-country authorities in cross-border settings, which involve the segregation of local branches and subsidiaries from a multinational banking, with a view to protecting domestic creditors against the fallout from the insolvency of foreign institutions both ex ante and ex post. Against this background, the present paper promotes an integrated, functional understanding of ring-fencing in the context of banking regulation and defines some core strategic questions for future structural reform of the European banking systems.