Rodrigo Olivares-Caminal

Managing Risk in the Financial System

Managing Risk in the Financial System makes important and timely contributions to our knowledge and understanding of banking law, financial institution restructuring and related considerations, through the production of an innovative, international and interdisciplinary set of contributions which link together the law and policy issues surrounding systemic risk and crisis management.

The Greek Tragedy: Is There a Deus Ex Machina?

The purpose of this article is mainly twofold: first, to discuss the difficulties that being a member of the European Monetary Union (‘EMU’) entail, with particular focus on Greece and on the implications of an internal devaluation. Secondly, how debt re-profiling can help to support the mechanisms of fiscal rehabilitation and external financing at the sovereign and corporate level. Among other issues, this article will attempt to clarify the situation that Greece is currently confronted with and provide a description of the different mechanisms to restructure/re-profile sovereign debt.

Non-performing Loans: Challenges and Options for Banks and Corporations

The chapter addresses the challenge that non-performing loans pose to banks as lenders and domestic corporations as debtors. Firstly, it looks into how NPLs can deteriorate a bank’s portfolio affecting its financial position and forcing its restructuring. Secondly, it considers the restructuring options for both banks and corporations drawing similarities and highlighting differences. Thirdly, the chapter discusses the main aspects of out-of-court private expedited workouts and formal court-supervised procedures.

Preface: It Has Been ‘A Hard Day’s Night’

The subtitle to this part of the book could have been – What have we learned since the demise of Lehman Brothers? The question, however, could not actually have been that short as we would have needed to add something about the number of investment banks that had to convert to become US holding companies, the renationalization of Fannie Mae and Freddie Mac, the death and then resurrection of AIG, the collapse of the Icelandic banking system, the overhauls of fi nancial regulation in the UK, US and much of Europe, the Greek debt tragedy, and of course, we would need to list the extraordinary measures that governments took around the world to prop up their banking systems through explicit guarantees that contributed to the ballooning of government fi scal defi cits. Instead, we think that The Beatles’ 1964 tune A Hard Day’s Night is more appropriate. While some of us might remember the lyrics better than others, the words go a long way in describing the recent global fi nancial crisis. For some, people have been ‘. . . working like a dog’, or not working at all, trying to save their homes from a short sale or foreclosure. For others, they are fi nally seeing conditions in fi nancial markets improving as low interest rates and quantitative easing are helping to boost the real economy and improving bank profi tability; leading managers and traders to long for a return to large bonuses and the prospects of acquiring bargainpriced vacation homes in exotic locations. Perhaps it is not much more than a natural evolution of the capitalist system. By and large, policymakers and regulators have not been ‘. . . sleeping like a log . . .’ (as the song goes), as many of them have awoken with what seems to be a terrible hangover. Some of those morningsafter were brought about through bank managers taking excessive risks or an evaporation of confi dence, while others are suff ering after following advice or the spin of people like Bernie Madoff , R. Allen Stanford and Marc Dreier – fraud artists who were not ‘playing by the rules’.1 As well, central bankers had