Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0002
This chapter discusses the use of securities, cash, and credit claims as collateral in finance transactions. To understand any interest in collateralized securities, cash, and credit claims, it is important to consider the concept of asset segregation and the way securities, cash, and credit claims are held. Of these types of collateral, the more difficult legal issues arise in the context of securities. Therefore, the largest part of the chapter is concerned with the custody of securities and the legal treatment, under different national laws, of the transfer and creation of security interests in securities. The challenges regarding the custody and administration of securities mainly follow from differences in the treatment, under different national laws, of the proprietary relationship between the 'owner' of securities and the securities themselves. This relationship is highly relevant, as the manner to provide financial collateral - both practically and legally, and either by way of title transfer or by way of creating a security interest - will be determined by this relationship. Consequently, differences in the treatment of 'owning' securities significantly add to the complexity of providing collateral in an international context.
{"title":"2 Financial Collateral, How It Is Held and Transferred","authors":"","doi":"10.1093/law/9780198816935.003.0002","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0002","url":null,"abstract":"This chapter discusses the use of securities, cash, and credit claims as collateral in finance transactions. To understand any interest in collateralized securities, cash, and credit claims, it is important to consider the concept of asset segregation and the way securities, cash, and credit claims are held. Of these types of collateral, the more difficult legal issues arise in the context of securities. Therefore, the largest part of the chapter is concerned with the custody of securities and the legal treatment, under different national laws, of the transfer and creation of security interests in securities. The challenges regarding the custody and administration of securities mainly follow from differences in the treatment, under different national laws, of the proprietary relationship between the 'owner' of securities and the securities themselves. This relationship is highly relevant, as the manner to provide financial collateral - both practically and legally, and either by way of title transfer or by way of creating a security interest - will be determined by this relationship. Consequently, differences in the treatment of 'owning' securities significantly add to the complexity of providing collateral in an international context.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116920614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0006
This chapter assesses the important elements of collateral transactions under which the collateral taker receives a security interest in the collateral while the collateral provider retains some form of proprietary interest in the collateral. In the EU context, the 'right of use' that is commonly agreed under a security collateral transaction is one of, if not the most, important issue in this regard. The right of use has its origins in prime brokerage agreements and the ISDA Credit Support Documents governed by New York law. The chapter then discusses the risks associated with what is also called 'reuse' and 'rehypothecation'. It also considers the right of use before and after the implementation of the Collateral Directive. Moreover, the chapter addresses the legal consequences of the collateral taker's exercise of the right of use. Finally, it examines US law. In particular, because the right of use has limited recognition under the Uniform Commercial Code, more focus will be on how it is employed pursuant to contract and subjected to extensive regulation intended to protect customers.
{"title":"6 Security Interest and Right of Use","authors":"","doi":"10.1093/law/9780198816935.003.0006","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0006","url":null,"abstract":"This chapter assesses the important elements of collateral transactions under which the collateral taker receives a security interest in the collateral while the collateral provider retains some form of proprietary interest in the collateral. In the EU context, the 'right of use' that is commonly agreed under a security collateral transaction is one of, if not the most, important issue in this regard. The right of use has its origins in prime brokerage agreements and the ISDA Credit Support Documents governed by New York law. The chapter then discusses the risks associated with what is also called 'reuse' and 'rehypothecation'. It also considers the right of use before and after the implementation of the Collateral Directive. Moreover, the chapter addresses the legal consequences of the collateral taker's exercise of the right of use. Finally, it examines US law. In particular, because the right of use has limited recognition under the Uniform Commercial Code, more focus will be on how it is employed pursuant to contract and subjected to extensive regulation intended to protect customers.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128071798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0004
This chapter begins by analysing the relevant Private International Law rules under EU law. This analysis distinguishes between non-insolvency and insolvency law rules. Outside of insolvency, the rules for the determination of jurisdiction and the recognition of court judgements, as well as the rules for the determination of the law to be applied, are to be found in different statutory EU instruments. If the dispute at hand qualifies as an insolvency matter, an important distinction must be made regarding the qualification of the parties. If the insolvent entity - whether that be the collateral provider or collateral taker - qualifies as an investment firm or a credit institution, the court's jurisdiction is to be determined under the Winding-up Directive, or, more precisely, under the relevant, national rules implementing this Directive. If the insolvent entity does not qualify as an investment firm or a credit institution, the European Insolvency Regulation (EIR Recast) determines the jurisdiction of the insolvency court and the law that the court must apply. The chapter then considers US law in the contexts outside of insolvency and within insolvency, both with respect to questions of jurisdiction in the event of a dispute between the parties as well as of choice of the law governing securities holdings and dispositions.
{"title":"4 Private International Law","authors":"","doi":"10.1093/law/9780198816935.003.0004","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0004","url":null,"abstract":"This chapter begins by analysing the relevant Private International Law rules under EU law. This analysis distinguishes between non-insolvency and insolvency law rules. Outside of insolvency, the rules for the determination of jurisdiction and the recognition of court judgements, as well as the rules for the determination of the law to be applied, are to be found in different statutory EU instruments. If the dispute at hand qualifies as an insolvency matter, an important distinction must be made regarding the qualification of the parties. If the insolvent entity - whether that be the collateral provider or collateral taker - qualifies as an investment firm or a credit institution, the court's jurisdiction is to be determined under the Winding-up Directive, or, more precisely, under the relevant, national rules implementing this Directive. If the insolvent entity does not qualify as an investment firm or a credit institution, the European Insolvency Regulation (EIR Recast) determines the jurisdiction of the insolvency court and the law that the court must apply. The chapter then considers US law in the contexts outside of insolvency and within insolvency, both with respect to questions of jurisdiction in the event of a dispute between the parties as well as of choice of the law governing securities holdings and dispositions.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134465334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0001
This introductory chapter provides a background and overview of financial collateral. One of the most significant changes in which financial markets have functioned since the global financial crisis is the 'flight to security'. Both the need for secured lending as well as regulatory requirements to reduce credit risk have contributed to the increased need for collateral, i.e. for liquid, high-quality assets that may be used as collateral. On the one hand, increasing concerns about counterparty risk have meant that secured borrowing and lending have become the normal means by which funding is accessed, largely replacing unsecured finance. On the other hand, the Basel III framework - and the need for better capitalization and liquidity of financial institutions - has made it more important for banks to hold a greater stock of high-quality securities. The global financial crisis and the resulting regulatory responses have thus profoundly affected the supply of, and demand for, financial collateral in that financial collateral has become much scarcer and more important. This book focuses on collateral in international finance transactions. It provides practitioners and academics with a comprehensive handbook on the various aspects of financial collateral and its use. The chapter then describes the terms finance, credit, security, and collateral.
{"title":"1 Introduction","authors":"","doi":"10.1093/law/9780198816935.003.0001","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0001","url":null,"abstract":"This introductory chapter provides a background and overview of financial collateral. One of the most significant changes in which financial markets have functioned since the global financial crisis is the 'flight to security'. Both the need for secured lending as well as regulatory requirements to reduce credit risk have contributed to the increased need for collateral, i.e. for liquid, high-quality assets that may be used as collateral. On the one hand, increasing concerns about counterparty risk have meant that secured borrowing and lending have become the normal means by which funding is accessed, largely replacing unsecured finance. On the other hand, the Basel III framework - and the need for better capitalization and liquidity of financial institutions - has made it more important for banks to hold a greater stock of high-quality securities. The global financial crisis and the resulting regulatory responses have thus profoundly affected the supply of, and demand for, financial collateral in that financial collateral has become much scarcer and more important. This book focuses on collateral in international finance transactions. It provides practitioners and academics with a comprehensive handbook on the various aspects of financial collateral and its use. The chapter then describes the terms finance, credit, security, and collateral.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"299 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128998594","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0009
This chapter looks at those rules of regulatory law that have been promulgated since - and largely because of - the 2008 global financial crisis, and which concern collateral transactions. It first examines the European Market Infrastructure Regulation (EMIR). This regulation, of which US law has a similar counterpart in the Dodd-Frank Act, has led to a massive increase in need of financial collateral. However, both legislative instruments do not seem to have direct consequences under private law. In contrast, the EU Markets in Financial Instruments Directive II and the Securities Finance Transactions Regulation of 2015 have imposed restrictions on entering into collateral transactions and contain several information requirements. These instruments may lead to consequences under private law, but not necessarily. This is different for recent EU and US rules concerning investment funds. Here, the private law consequences are obvious - and mostly unwarranted.
{"title":"9 Post-Crisis Regulatory Responses","authors":"","doi":"10.1093/law/9780198816935.003.0009","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0009","url":null,"abstract":"This chapter looks at those rules of regulatory law that have been promulgated since - and largely because of - the 2008 global financial crisis, and which concern collateral transactions. It first examines the European Market Infrastructure Regulation (EMIR). This regulation, of which US law has a similar counterpart in the Dodd-Frank Act, has led to a massive increase in need of financial collateral. However, both legislative instruments do not seem to have direct consequences under private law. In contrast, the EU Markets in Financial Instruments Directive II and the Securities Finance Transactions Regulation of 2015 have imposed restrictions on entering into collateral transactions and contain several information requirements. These instruments may lead to consequences under private law, but not necessarily. This is different for recent EU and US rules concerning investment funds. Here, the private law consequences are obvious - and mostly unwarranted.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132738982","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0007
This chapter explores another main category of collateral transactions: transactions under which ownership or title in the assets provided as collateral is transferred to the collateral taker. These transactions are called title transfer collateral transactions or title transfer financial collateral arrangements in the EU context (title transfer FCAs or TTFCAs). More specifically, the EU Collateral Directive has defined a title transfer FCA as an arrangement under which a collateral provider transfers full ownership of, or full entitlement to, financial collateral to a collateral taker for the purpose of securing or otherwise covering the performance of relevant financial obligations. Most legal standard documentation for title transfer collateral transactions, such as the General Master Repurchase Agreement, the General Master Securities Lending Agreement, and most ISDA Credit Support Documents provide for an outright transfer of collateral especially in as far as these agreements are English law governed. While title transfer collateral transactions are widely used, they are not without (legal) risks. The chapter focuses particularly on the so-called recharacterisation risk, which may jeopardise title transfer collateral transactions both under EU laws and US law.
{"title":"7 Title Transfer and Recharacterization","authors":"","doi":"10.1093/law/9780198816935.003.0007","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0007","url":null,"abstract":"This chapter explores another main category of collateral transactions: transactions under which ownership or title in the assets provided as collateral is transferred to the collateral taker. These transactions are called title transfer collateral transactions or title transfer financial collateral arrangements in the EU context (title transfer FCAs or TTFCAs). More specifically, the EU Collateral Directive has defined a title transfer FCA as an arrangement under which a collateral provider transfers full ownership of, or full entitlement to, financial collateral to a collateral taker for the purpose of securing or otherwise covering the performance of relevant financial obligations. Most legal standard documentation for title transfer collateral transactions, such as the General Master Repurchase Agreement, the General Master Securities Lending Agreement, and most ISDA Credit Support Documents provide for an outright transfer of collateral especially in as far as these agreements are English law governed. While title transfer collateral transactions are widely used, they are not without (legal) risks. The chapter focuses particularly on the so-called recharacterisation risk, which may jeopardise title transfer collateral transactions both under EU laws and US law.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120951865","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0003
This chapter examines collateral transactions. Being the backbone of secured funding with financial market counterparties, collateral underpins a variety of financial transactions within the global marketplace, such as repurchase agreements (repos), securities lending, and derivatives transactions-often collectively referred to as 'collateralised finance transactions' or simply 'collateral transactions'. In order to legally underpin a collateral transaction, parties to the transaction generally enter into the applicable master agreement, which will be a standard template document created and maintained by the relevant industry association. These include the Global Master Repurchase Agreement for repos; the Global Master Securities Lending Agreement for securities lending transactions; and the International Swaps and Derivative Association Credit Support Annex under the ISDA Master Agreement for derivatives transactions. The master agreements are standardised contracts in effect setting out the rights and obligations of the parties to relevant transactions. These contracts provide market participants with substantial standardization, efficiency, predictability, legal certainty, and flexibility in respect of legal and commercial aspects of transactions. In essence, these contracts are so widely used and with so little derogations that they function as lex mercatoria or the international law that applies to certain transactions between certain market participants.
{"title":"3 Financial Collateral Transactions and their Standardization","authors":"","doi":"10.1093/law/9780198816935.003.0003","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0003","url":null,"abstract":"This chapter examines collateral transactions. Being the backbone of secured funding with financial market counterparties, collateral underpins a variety of financial transactions within the global marketplace, such as repurchase agreements (repos), securities lending, and derivatives transactions-often collectively referred to as 'collateralised finance transactions' or simply 'collateral transactions'. In order to legally underpin a collateral transaction, parties to the transaction generally enter into the applicable master agreement, which will be a standard template document created and maintained by the relevant industry association. These include the Global Master Repurchase Agreement for repos; the Global Master Securities Lending Agreement for securities lending transactions; and the International Swaps and Derivative Association Credit Support Annex under the ISDA Master Agreement for derivatives transactions. The master agreements are standardised contracts in effect setting out the rights and obligations of the parties to relevant transactions. These contracts provide market participants with substantial standardization, efficiency, predictability, legal certainty, and flexibility in respect of legal and commercial aspects of transactions. In essence, these contracts are so widely used and with so little derogations that they function as lex mercatoria or the international law that applies to certain transactions between certain market participants.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121353530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0008
This chapter studies the early termination of collateral transactions. It is in this context that the transactions must prove their worth, i.e. must show they indeed reduce or limit the credit risk the collateral taker runs on the collateral provider. To achieve this result, contractual techniques have been developed that have subsequently been sanctioned and protected by the law. The chapter looks at the legal framework regulating those contractual techniques. However, the early termination of collateral transactions and the enforcement by the collateral taker of its rights in the assets provided as collateral involve specific legal issues. The majority of collateral transactions provide for 'close-out netting' as a way of enforcement; close-out netting thus replaces traditional enforcement of security interests, such as public auction. In addition, the termination of collateral transactions, and close-out netting in particular, in multiple jurisdictions is protected by 'safe harbours', i.e. shielded from insolvency law rules that would otherwise be applicable.
{"title":"8 Close-Out Netting and Safe Harbours","authors":"","doi":"10.1093/law/9780198816935.003.0008","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0008","url":null,"abstract":"This chapter studies the early termination of collateral transactions. It is in this context that the transactions must prove their worth, i.e. must show they indeed reduce or limit the credit risk the collateral taker runs on the collateral provider. To achieve this result, contractual techniques have been developed that have subsequently been sanctioned and protected by the law. The chapter looks at the legal framework regulating those contractual techniques. However, the early termination of collateral transactions and the enforcement by the collateral taker of its rights in the assets provided as collateral involve specific legal issues. The majority of collateral transactions provide for 'close-out netting' as a way of enforcement; close-out netting thus replaces traditional enforcement of security interests, such as public auction. In addition, the termination of collateral transactions, and close-out netting in particular, in multiple jurisdictions is protected by 'safe harbours', i.e. shielded from insolvency law rules that would otherwise be applicable.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"72 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131837218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-12DOI: 10.1093/law/9780198816935.003.0005
This chapter focuses on the creation of a collateral transaction. It looks at two issues: (i) which formalities must be fulfilled in order to create a collateral transaction, or, more specifically, to validly provide collateral? And (ii) to what extent must the collateral taker have 'possession' or 'control' for a valid provision of collateral? These two issues seem to be especially problematical in the jurisdictions of the EU Member States. The problems follow from the implementation of the Collateral Directive into EU Member States laws, where both issues required derogations of, or at least amendments of, their national (property) laws. More specifically, the Collateral Directive aims to dis-apply formal requirements for collateral transactions to be validly created, i.e. for collateral to be validly provided. Examples of such formal requirements are the registration of a security interest with a public register and the execution of a specific document in a mandatory way. Meanwhile, general US property law requires the collateral taker to be in control of the collateralized assets as a means of perfecting a security interest.
{"title":"5 Formalities and Control","authors":"","doi":"10.1093/law/9780198816935.003.0005","DOIUrl":"https://doi.org/10.1093/law/9780198816935.003.0005","url":null,"abstract":"This chapter focuses on the creation of a collateral transaction. It looks at two issues: (i) which formalities must be fulfilled in order to create a collateral transaction, or, more specifically, to validly provide collateral? And (ii) to what extent must the collateral taker have 'possession' or 'control' for a valid provision of collateral? These two issues seem to be especially problematical in the jurisdictions of the EU Member States. The problems follow from the implementation of the Collateral Directive into EU Member States laws, where both issues required derogations of, or at least amendments of, their national (property) laws. More specifically, the Collateral Directive aims to dis-apply formal requirements for collateral transactions to be validly created, i.e. for collateral to be validly provided. Examples of such formal requirements are the registration of a security interest with a public register and the execution of a specific document in a mandatory way. Meanwhile, general US property law requires the collateral taker to be in control of the collateralized assets as a means of perfecting a security interest.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129304804","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1976-12-31DOI: 10.1515/9783110440003-011
J. Coleman
This concluding chapter explains that since the 2008 global financial crisis, and largely because of it, a plethora of regulatory rules have been enacted globally to enhance financial stability. Several of these rules have had an impact on collateral transactions. First, besides a market-driven tendency to replacing unsecured finance with collateral transactions, stricter capital requirements have increased the need for banks to engage in transactions where funding is provided against high quality collateral. Second, regulatory initiatives which have been undertaken to address stability risks that materialized in the global financial crisis in the context of derivatives trading also have had an impact on the availability of high-quality collateral. Third, next to more stringent capital requirements and centralized clearing obligations, which both demand more liquidity, other regulatory rules limit the provision of liquidity. These post-crisis regulations not only have had important economic consequences on the (availability of) financial collateral, they also have important legal ramifications for collateral transactions themselves. As regards the legal (infra)structure of collateral transactions, the interaction between the private and public law rules shows a strong correlation with the interaction between supra-national and national law.
{"title":"10 Conclusions","authors":"J. Coleman","doi":"10.1515/9783110440003-011","DOIUrl":"https://doi.org/10.1515/9783110440003-011","url":null,"abstract":"This concluding chapter explains that since the 2008 global financial crisis, and largely because of it, a plethora of regulatory rules have been enacted globally to enhance financial stability. Several of these rules have had an impact on collateral transactions. First, besides a market-driven tendency to replacing unsecured finance with collateral transactions, stricter capital requirements have increased the need for banks to engage in transactions where funding is provided against high quality collateral. Second, regulatory initiatives which have been undertaken to address stability risks that materialized in the global financial crisis in the context of derivatives trading also have had an impact on the availability of high-quality collateral. Third, next to more stringent capital requirements and centralized clearing obligations, which both demand more liquidity, other regulatory rules limit the provision of liquidity. These post-crisis regulations not only have had important economic consequences on the (availability of) financial collateral, they also have important legal ramifications for collateral transactions themselves. As regards the legal (infra)structure of collateral transactions, the interaction between the private and public law rules shows a strong correlation with the interaction between supra-national and national law.","PeriodicalId":117130,"journal":{"name":"Financial Collateral","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1976-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130969038","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：