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Special Report on

Netting, financial contracts, and banks

netting financial contracts and banks special research report Photo by photos.mris.com
Losses from bank failures have significant adverse implications for bank stakeholders, as well as for the macroeconomy. This article examines the potential sources of such losses, in particular the losses that may occur after the date a bank is failed, and makes recommendations on how to minimize these losses. To download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page . Note that these files are not on the IDEAS site. Please be patient as the ...
is an agreement or contract that is not based on a real, or true, exchange, i.e.: There is nothing tangible like money, or a product, that is being exchanged. For example, a person goes to the grocery store, exchanges a currency (money) for a commodity (say, an apple). The exchange is complete, both parties have something tangible. If the purchaser had called the store and asked for the apple to be held for one hour while the purchaser drives to the store, and the seller agrees, then a derivative has been created. The agreement (derivative) is derived from a proposed exchange (trade money for apple in one hour, not now). In ...
REVIEWS AND OPINIONS
Streetwise Professor » That's His Story, and He's Sticking To It
his story being that mandated clearing will improve the stability of the financial system by eliminating interconnectedness : “Over-the-counter derivatives are meant to lower risk on our economy, and to some extent they do,” Mr. Gensler says. “But they have concentrated risk in a few big banks…through their interconnectedness.” He says forcing them onto clearinghouses would shift the risk from any single institution to the clearinghouse. It can more easily offset, for instance, bets that interest rates will rise with bets that they will fall. That would make it possible to allow a big financial firm ... market research, surveys and trends
Winston & Strawn LLP: Financial Services Update - June 21, 2010
It was seemingly a good week last week for the banking system in Europe and the United States. For one, the government of the United Kingdom announced what has been described as a complete overhaul of the banking and financial services sector in the U.K. Among various components of this planned reform is the dismantling of the Financial Services Authority (FSA), with authority over banks and the financial services business being returned to the U.K. central bank, the Bank of England. This announcement heralds the end of a tripartite system of regulation, which split the regulation of the U.K. banking and financial services ... market research, surveys and trends

SURVEY RESULTS FOR
NETTING, FINANCIAL CONTRACTS, AND BANKS

Netting, Financial Contracts, and Banks: The Economic Implications
15In 2002 U.S. banks had total derivative credit exposures of $525 billion, 96 percent of which (measured by notional value) was concentrated in seven banks ... industry trends, business articles and survey research
Federal Reserve Bank of Chicago
billion (43 percent) were inter-dealer positions and only 687 billion USD (16 ..... Netting, Financial Contracts, and Banks: The Economic Implications ... industry trends, business articles and survey research
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The taxation of equity total return swaps (TRSs) held by a foreign investor not subject to U.S. federal net income tax has been the subject of many wide-ranging audits in recent years. These audits have canvassed both the financial institutions that offer TRSs and the foreign clients (e.g., hedge funds) that execute them. The issue is whether any dividend-equivalent payments made under the terms of a TRS are subject to the 30% gross withholding tax or to a reduced amount under an applicable tax treaty. Even though actual dividend payments made by U.S. corporations to foreign investors are generally subject to withholding tax, ... market trends, news research and surveys resources
Goldman Sachs More Responsive to FCIC After Subpoena
June 29 (Bloomberg) -- Goldman Sachs Group Inc. has been more responsive to information requests from the Financial Crisis Inquiry Commission since being subpoenaed and has made Chief Executive Officer Lloyd Blankfein available for an interview, the panel’s leaders said. Blankfein was interviewed recently by FCIC staff “at length,” commission Chairman Phil Angelides said today in a conference call with journalists. Angelides said on June 7 that the panel had subpoenaed Goldman Sachs after the bank tried to hinder a probe by overwhelming the commission with documents. “I have no question” that New ... market trends, news research and surveys resources

INFORMATION RESOURCES

Financial Contracts and the New Bankruptcy Code: Insulating ...
Jan 25, 2006 ... 10 William J. Bergman et al., Netting, Financial Contracts, and Banks: The Economic Implications 31–32. (Fed. Res. ... technology research, surveys study and trend statistics
OCC: PUBLICATIONS
A legally enforceable arrangement between a bank and a counterparty that creates a single legal obligation covering all included individual contracts. This means that a bank's obligation, in the event of the default or insolvency of one of the parties, would be the net sum of all positive and negative fair values of contracts included in the bilateral netting arrangement. Derivative : A financial contract whose value is derived from the performance of assets, interest rates, currency exchange rates, or indexes. Derivative transactions include a wide assortment of financial contracts including structured debt ... technology research, surveys study and trend statistics
REAL TIME
NETTING, FINANCIAL CONTRACTS, AND BANKS
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Ques.2    Describe the different kinds of international financial flows and analyze the recent trends in India�s balance of payments. Ques.3   Explain in detail the Purchasing Power Parity Relationship and Interest Rate Parity Relationship. Ques.4   What are currency Futures, Options and Swaps? Explain the application of these instruments. Ques.5    What are the different types of Exchange Rate Exposures? Explain the techniques used to manage these exposures. Ques.6   Why is cost of capital different across countries? Ques.7    Examine and explain the ...
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Ques.2    Describe the different kinds of international financial flows and analyze the recent trends in India�s balance of payments. Ques.3   Explain in detail the Purchasing Power Parity Relationship and Interest Rate Parity Relationship. Ques.4   What are currency Futures, Options and Swaps? Explain the application of these instruments. Ques.5    What are the different types of Exchange Rate Exposures? Explain the techniques used to manage these exposures. Ques.6   Why is cost of capital different across countries? Ques.7    Examine and explain the ...