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The Enduring Legacy of the Dodd-Frank Act’s Derivatives Reforms 多德-弗兰克法案衍生品改革的持久遗产
IF 2.6 Q1 LAW Pub Date : 2020-09-20 DOI: 10.1093/JFR/FJAA011
H. Tarbert
Despite the shortcomings of the Dodd-Frank Act, this article argues that the two parts most relevant to derivatives—Titles VII and VIII—are likely to endure. Title VII, which covers the trading of derivatives, especially swaps, generally strikes the right balance between preserving the vibrancy of the US derivatives markets and mitigating risk to market participants and the US financial system. While Title VII’s consolidation of much of the credit risk management function in central counterparties (CCPs) itself poses a systemic risk, this article contends nonetheless that Title VII addresses this risk by giving the Commodity Futures Trading Commission (CFTC) the power to mitigate it through regulations that implement the ‘core principles’ applicable to CCPs. This oversight is complemented by Title VIII, which provides enhanced supervision of systemically important CCPs. The Dodd-Frank Act’s approach to derivatives will endure, it is argued, so long as policymakers understand the interrelationship between Titles VII and VIII. This article focuses on that relationship and closes with a brief discussion of some of the work the CFTC is undertaking to bring finality to the statutory framework created by Titles VII and VIII.
尽管《多德-弗兰克法案》存在缺陷,但本文认为,与衍生品最相关的两个部分——第七章和第八章——可能会持续下去。第七章涵盖了衍生品交易,尤其是掉期交易,通常在保持美国衍生品市场的活力和降低市场参与者和美国金融体系的风险之间取得了正确的平衡。尽管第七章合并了中央对手方(CCP)的大部分信贷风险管理职能本身就构成了系统性风险,但本文认为,第七章通过赋予商品期货交易委员会(CFTC)权力,通过实施适用于CCP的“核心原则”的法规来减轻这种风险,从而解决了这种风险。第八章对这一监督进行了补充,加强了对具有系统重要性的CCP的监督。有人认为,只要政策制定者理解第七章和第八章之间的相互关系,《多德-弗兰克法案》对衍生品的处理方法就会持续下去。本文重点讨论了这种关系,并简要讨论了商品期货交易委员会为最终确定第七和第八编创建的法律框架所做的一些工作。
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引用次数: 0
Hybrid and Cyber Security Threats and the EU’s Financial System 混合和网络安全威胁与欧盟金融体系
IF 2.6 Q1 LAW Pub Date : 2020-09-20 DOI: 10.1093/jfr/fjaa006
M. Demertzis, G. Wolff
Increasing cyber and hybrid risks will test the European Union’s system of fragmentation on issues of security, but centralization on financial and other economic issues. This asymmetry was not an obstacle in a world in which security threats were more contained or of a different nature. But the world is changing. In this article, we document the rise in cyber attacks in the EU. Meanwhile, hybrid threats are real, though difficult to quantify. We then explore preparations to increase the resilience of the financial system in terms of regulation, testing, and governance. We find that at the individual institutional level, significant measures have been taken, even though there are diverging views on whether individual companies are sufficiently prepared. More worryingly, preparations appear less advanced at the system-wide level. We recommend that EU finance ministers increase resilience through regular preparedness exercises and greater consideration of systemwide regulatory issues. A broader political discussion on the integration of the EU security architecture applicable to the financial system should also be advanced. This includes reopening the framework on foreign-investment screening in order to have screening of foreign investment in critical financial infrastructure at the EU level.
不断增加的网络和混合风险将考验欧盟在安全问题上的分散体系,但在金融和其他经济问题上的集中体系。在一个安全威胁受到更多控制或性质不同的世界里,这种不对称性并不是一个障碍。但世界正在改变。在这篇文章中,我们记录了欧盟网络攻击的增加。同时,混合威胁是真实存在的,尽管难以量化。然后,我们探索在监管、测试和治理方面提高金融系统弹性的准备工作。我们发现,在个别机构层面,已经采取了重大措施,尽管在个别公司是否准备充分的问题上存在分歧。更令人担忧的是,全系统层面的准备工作似乎没有那么先进。我们建议欧盟财政部长通过定期的准备工作和更多地考虑全系统的监管问题来提高抵御能力。还应推动就适用于金融体系的欧盟安全架构的一体化进行更广泛的政治讨论。这包括重新开放外国投资筛选框架,以便在欧盟层面对关键金融基础设施的外国投资进行筛选。
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引用次数: 1
Unregulated Algorithmic Trading: Testing the Boundaries of the European Union Algorithmic Trading Regime 无管制的算法贸易:检验欧盟算法贸易制度的边界
IF 2.6 Q1 LAW Pub Date : 2020-09-20 DOI: 10.1093/jfr/fjaa008
Clara Martins Pereira
Trading in modern equity markets has come to be dominated by machines and algorithms. However, there is significant concern over the impact of algorithmic trading on market quality and a number of jurisdictions have moved to address the risks associated with this new type of trading. The European Union has been no exception to this trend. This article argues that while the European Union algorithmic trading regime is often perceived as a tough response to the challenges inherent in machine trading, it has one crucial shortcoming: it does not regulate the simpler, basic execution algorithms used in automated order routers. Yet the same risk generally associated with algorithmic trading activity also arises, in particular, from the use of these basic execution algorithms—as was made evident by the trading glitch that led to the fall of United States securities trader Knight Capital in 2012. Indeed, such risk could even be amplified by the lack of sophistication of these simpler execution algorithms. It is thus proposed that the European Union should amend the objective scope of its algorithmic trading regime by expanding the definition of algorithmic trading under the Markets in Financial Instruments Directive (MiFID II) to include all execution algorithms, regardless of their complexity.
现代股票市场的交易已逐渐由机器和算法主导。然而,人们对算法交易对市场质量的影响表示严重担忧,许多司法管辖区已采取行动解决与这种新型交易相关的风险。欧盟也不例外。本文认为,虽然欧盟算法交易制度通常被认为是对机器交易固有挑战的强硬回应,但它有一个关键的缺点:它不规范自动订单路由器中使用的更简单、基本的执行算法。然而,通常与算法交易活动相关的同样风险也会出现,尤其是在使用这些基本执行算法时——2012年导致美国证券交易商奈特资本(Knight Capital)倒闭的交易故障就证明了这一点。事实上,由于这些更简单的执行算法缺乏复杂性,这种风险甚至可能被放大。因此,建议欧盟通过扩大金融工具市场指令(MiFID II)下算法交易的定义来修改其算法交易制度的客观范围,以包括所有执行算法,无论其复杂性如何。
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引用次数: 6
The Quest for a European Safe Asset—A Comparative Legal Analysis of Sovereign Bond-Backed Securities, E-Bonds, Purple Bonds, and Coronabonds 对欧洲安全资产的追求——主权债券支持证券、E-Bonds、紫色债券和冠状债券的比较法律分析
IF 2.6 Q1 LAW Pub Date : 2020-08-13 DOI: 10.1093/jfr/fjaa009
S. Grund
Abstract The European sovereign debt crisis and, more recently, the COVID-19 pandemic have revealed the European Economic and Monetary Union’s fragility, which essentially emanates from the inherent tension between a single monetary policy and decentralized fiscal policies. To cushion economic and financial shocks and sever the sovereign-bank doom loop, different proposals to create a common public debt security have been put forward, although none of them has so far seen the light of day. Building on pertinent economic and finance scholarship, this article reviews four promising safe asset proposals from a legal perspective: Sovereign bond-backed securities (SBBS), E-bonds, Purple bonds, and Coronabonds. Rather than focusing on their feasibility under EU law or national constitutional law, this article compares the proposals from an investor perspective against the backdrop of the following formal and functional legal characteristics that render assets ‘safe’: governing law, dispute settlement forum, investor protection, and investor representation in sovereign debt restructurings. Against this backdrop, targeted recommendations on critical design elements of safe assets, with the aim of reconciling the economic policy objectives with the pertinent legal constraints, are advanced.
欧洲主权债务危机以及最近的新冠肺炎疫情暴露了欧洲经济和货币联盟的脆弱性,其本质上源于单一货币政策与分散财政政策之间的内在紧张关系。为了缓冲经济和金融冲击,切断主权银行的恶性循环,人们提出了不同的建议,以创建一个共同的公共债务安全,尽管到目前为止,这些建议都没有被采纳。本文以相关的经济和金融学术为基础,从法律角度回顾了四种有前途的安全资产建议:主权债券支持证券(SBBS)、E-bonds、紫色债券和冠状债券。本文并不关注它们在欧盟法律或国家宪法下的可行性,而是从投资者的角度,在以下使资产“安全”的正式和功能性法律特征的背景下,对这些建议进行比较:管治法、争端解决论坛、投资者保护和主权债务重组中的投资者代表。在此背景下,提出了关于安全资产的关键设计要素的有针对性的建议,目的是使经济政策目标与有关的法律限制相协调。
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引用次数: 3
The Role of Bank Management in the EU Resolution Regime for NPLs 银行管理层在欧盟不良贷款处置机制中的作用
IF 2.6 Q1 LAW Pub Date : 2020-08-05 DOI: 10.1093/jfr/fjaa007
A. Kokkinis, A. Miglionico
During the global financial crisis, the growth of non-performing loans (NPLs) was partly a consequence of lack of regulatory oversight and poor bank internal processes. NPLs require intrusive monitoring tools and effective corporate governance is crucial in dealing with the deterioration of loans; however, perverse incentives to delay their recognition leave the process at risk. The EU legislation has adopted a set of regulatory measures to resolve and restructure non-performing exposures. While existing literature approaches NPLs from a regulatory and accounting perspective, this article takes a distinctive corporate governance view in order to conceptualize the NPL problem. The strategies through which senior management and shareholder incentives may undermine regulatory objectives on NPL disclosure are identified and an evidence-based approach to reconsidering and settling these problems is advanced.
在全球金融危机期间,不良贷款的增长在一定程度上是缺乏监管和银行内部流程不佳的结果。不良贷款需要侵入性的监控工具,有效的公司治理对应对贷款恶化至关重要;然而,推迟承认它们的不当动机使这一进程面临风险。欧盟立法通过了一系列监管措施来解决和重组不良风险敞口。虽然现有文献从监管和会计的角度来处理不良贷款,但本文采用了独特的公司治理观来概念化不良贷款问题。确定了高级管理层和股东激励可能破坏不良贷款披露监管目标的策略,并提出了重新考虑和解决这些问题的循证方法。
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引用次数: 2
Restructuring Euro Area Sovereign Debt: Have the Options Narrowed? 重组欧元区主权债务:选择余地缩小了吗?
IF 2.6 Q1 LAW Pub Date : 2020-06-25 DOI: 10.1093/jfr/fjaa003
W. M. C. Weidemaier
This Essay examines the intersection between two key attributes of sovereign debt governance in the Euro Area. First, sovereigns mostly issue bonds governed by their own law. This “local law advantage” should make debt restructuring comparatively easy, for the sovereign can change the law to reduce its debt. The second attribute is the so-called Euro CAC, a contractbased restructuring mechanism mandated by the Treaty Establishing the European Stability Mechanism (ESM). Euro CACs let a bondholder supermajority approve a restructuring and bind dissenters. Since 2013, nearly all Euro Area sovereign debt has included the clause. Many believe the ESM Treaty requires governments to use the Euro CAC to restructure. But if so, the Treaty is a suicide pact, for the design of the Euro CAC is flawed. In a meaningful subset of cases, the clause will not provide adequate debt relief. This Essay makes two primary contributions. First, using an Italian restructuring as an example, it explains why the ESM Treaty does not, in fact, require the use of the Euro CAC. Second, it examines the legal constraints—the most pertinent of which derive from the European Convention on Human Rights—that do restrict the use of local law advantage.
本文考察了欧元区主权债务治理的两个关键特征之间的交叉点。首先,主权国家大多发行受本国法律管辖的债券。这种“地方法律优势”应该会使债务重组相对容易,因为主权国家可以修改法律来减少债务。第二个属性是所谓的欧洲CAC,这是一个由《建立欧洲稳定机制条约》(ESM)授权的基于合同的重组机制。欧元CAC允许债券持有人以绝对多数批准重组,并约束持不同意见者。自2013年以来,几乎所有欧元区主权债务都包含了该条款。许多人认为,ESM条约要求各国政府利用欧洲CAC进行重组。但如果是这样的话,该条约就是一个自杀式的协议,因为欧洲CAC的设计是有缺陷的。在一部分有意义的情况下,该条款不会提供足够的债务减免。这篇文章有两个主要贡献。首先,以意大利的重组为例,它解释了为什么《ESM条约》实际上不要求使用欧洲CAC。其次,它审查了法律约束——其中最相关的来自《欧洲人权公约》——这些约束确实限制了当地法律优势的使用。
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引用次数: 0
The Role of Deposit Insurance in Bank Resolution 存款保险在银行清算中的作用
IF 2.6 Q1 LAW Pub Date : 2020-06-25 DOI: 10.1093/jfr/fjaa002
C. Hofmann
Deposit Insurance Schemes (DIS) are mechanisms that reimburse depositors when banks default; however, they also serve important functions in bank resolution proceedings. Whereas it is evident that DIS should contribute to the rescue of banks’ critical financial functions in such resolution scenarios, the resulting questions of who should benefit from their payments and whether these payments result in any repayment obligations have so far remained unaddressed. In response to these questions, the article suggests distinguishing between scenarios in which banks’ critical financial functions are transferred to other institutions and scenarios in which the critical financial functions remain with recapitalized banks. The latter is the more complex situation because it leads to the survival of the bank in resolution and raises the question of hierarchies among several groups of contributors to recapitalizations. The article argues for a subordinate role for DIS in these hierarchies and suggests that DIS payments should lead to holdings of Tier 2 regulatory capital in recapitalized banks.
存款保险计划(DIS)是在银行违约时补偿存款人的机制;然而,它们在银行清算程序中也起着重要的作用。虽然在这种解决方案中,DIS显然应该有助于拯救银行的关键财务职能,但由此产生的问题是,谁应该从这些付款中受益,以及这些付款是否导致任何偿还义务,迄今仍未得到解决。为了回答这些问题,本文建议区分银行的关键金融功能转移到其他机构的情况和关键金融功能保留在资本重组银行的情况。后者的情况更为复杂,因为它会导致银行在解决方案中生存下来,并引发几个资本重组贡献者群体之间的等级问题。本文主张DIS在这些层级中扮演从属角色,并建议DIS支付应导致在资本重组银行中持有二级监管资本。
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引用次数: 3
When Governments Promise to Prioritize Public Debt: Do Markets Care? 当政府承诺优先处理公共债务时:市场会在意吗?
IF 2.6 Q1 LAW Pub Date : 2020-03-20 DOI: 10.1093/jfr/fjaa001
Mitu Gulati,Ugo Panizza,W Mark C Weidemaier,Gracie Willingham
Abstract During the European sovereign debt crisis of 2011–13, some nations faced with rising borrowing costs adopted commitments to treat bondholders as priority claimants. That is, if there were a shortage of funds, bondholders would be paid first. In this article, we analyse the prevalence and variety of these types of commitments and ask whether they impact borrowing costs. We examine a reform that was widely touted at the height of the Euro sovereign debt crisis in 2011, in which Spain enshrined in its constitution a strong commitment to give absolute priority to public debt claimants. We find no evidence that this reform had any impact on Spanish sovereign bond yields. By contrast, our examination of the US Commonwealth of Puerto Rico suggests that constitutional priority promises can have an impact, at least where the borrower government is subject to supervening law and legal institutions.
在2011 - 2013年欧洲主权债务危机期间,一些面临借款成本上升的国家采取了将债券持有人视为优先索赔人的承诺。也就是说,如果出现资金短缺,债券持有人将首先得到偿付。在本文中,我们分析了这些类型承诺的普遍性和多样性,并询问它们是否会影响借贷成本。我们研究了一项在2011年欧洲主权债务危机最严重时被广泛吹捧的改革,在这项改革中,西班牙在其宪法中郑重承诺绝对优先考虑公共债务索赔人。我们没有发现任何证据表明这一改革对西班牙主权债券收益率有任何影响。相比之下,我们对美国波多黎各联邦的研究表明,宪法优先承诺可能会产生影响,至少在借款人政府受监管法律和法律机构约束的地方是如此。
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引用次数: 0
Controlling the Long-Term Problem of Short-Term Funding 控制短期融资的长期问题
IF 2.6 Q1 LAW Pub Date : 2020-01-17 DOI: 10.1093/JFR/FJZ004
B. Johnson, H. Scott
While financial crises can be triggered by several causes, runs on short-term liabilities are at the heart of all financial crises, with the recent 2007–09 financial crisis being no exception. Given the unpredictability of crisis triggers and the overwhelming predictability of short-term funding’s role in financial crises, legislative and regulatory responses to the recent financial crisis should focus on the consequences of relying on short-term funding in the financial system. However, in addressing the problem of such funding, it is important to recognize the social benefits afforded by short-term liabilities and not simply the costs. To this end, this paper provides a brief overview of short-term funding in the U.S. financial system, while also highlighting the trade-off between the costs and benefits of short-term liabilities. The paper proceeds with an analysis of various proposals aimed at addressing the short-term funding issue.
虽然金融危机可能由多种原因引发,但短期负债挤兑是所有金融危机的核心,最近的2007-09年金融危机也不例外。鉴于危机触发因素的不可预测性以及短期融资在金融危机中所起作用的不可预测性,立法和监管机构对最近金融危机的反应应侧重于金融体系中依赖短期融资的后果。然而,在解决这种筹资问题时,重要的是要认识到短期负债所带来的社会利益,而不仅仅是成本。为此,本文简要概述了美国金融体系中的短期融资,同时也强调了短期负债的成本和收益之间的权衡。本文接着分析了旨在解决短期资金问题的各种建议。
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引用次数: 0
Volume Limit: An Effective Response to the India Flash Crash? 成交量限制:对印度闪电崩盘的有效回应?
IF 2.6 Q1 LAW Pub Date : 2019-12-31 DOI: 10.1093/JFR/FJZ006
Viktoria Dalko, Michael H. Wang
This paper assesses the recently enacted securities regulation, called the volume limit, by the Securities and Exchange Board of India. It reviews the literature on the negative consequences of large sale volumes on the stability of the stock market. The paper also examines the recent development of high-frequency trading in India. The two investigations unveil areas in which the regulation is effective and those in which it is inadequate. That is, the effectiveness of the regulation of the volume limit lies in reducing large price impacts due to genuine transactions. However, the inadequacy of this regulation is exposed when manipulation tactics arise regarding order display, such as spoofing by certain high-frequency traders.
本文评估了印度证券交易委员会最近颁布的被称为交易量限制的证券监管。它回顾了大量销售对股票市场稳定性的负面影响的文献。本文还考察了印度高频交易的最新发展。这两项调查揭示了该法规有效的领域和不足的领域。也就是说,监管数量限制的有效性在于减少真实交易对价格的巨大影响。然而,当出现与订单显示有关的操纵策略时,例如某些高频交易者的欺骗,这一规定的不足就暴露出来了。
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引用次数: 0
期刊
Journal of Financial Regulation
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