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Ring-Fencing in Europe / Part III – Legal Comparative Analysis
Ring-Fencing in Europe / Part III – Legal Comparative Analysis
Contents
Chapter
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Page
1–22
Titelei/Inhaltsverzeichnis
1–22
Details
23–24
List of Abbreviations
23–24
Details
25–35
Introduction
25–35
Details
I. Overview
Details
II. Current State of Scientific Research
Details
III. Research Problem
Details
IV. Research Questions
Details
V. Scientific Approach
Details
A. Part I
Details
B. Part II
Details
C. The Concept of Ring-Fencing II
Details
VI. Methodology
Details
36–99
Part I – The Concept of Ring-Fencing
36–99
Details
I. Universal Banking Model
Details
A. Universal banking in Europe
Details
a. Definition
Details
1. “The entire range of financial services”
Details
2. Universal banking after ring-fencing
Details
b. Dominance
Details
B. Benefits and costs of universal banking
Details
a. Benefits
Details
b. Costs
Details
1. Access to the safety net: explicit and implicit subsidies
Details
2. Risk-taking, trading risks, culture and complexity
Details
II. Changes in the Realm of International Banking
Details
A. Change of banks’ business models
Details
a. Environment
Details
b. Relationship-based banking
Details
c. Market-based banking
Details
B. Proprietary trading and market making
Details
a. Proprietary trading
Details
b. Market making
Details
C. Bigger, more complex, more interconnected
Details
a. Bigger banks
Details
b. Complexity and interconnectedness
Details
c. Post-crisis response
Details
III. Bailouts and Too-Big-to-Fail
Details
A. Bailouts
Details
B. Bailout decision and too-big-to-fail
Details
C. Implicit subsidies
Details
D. Global systemically important banks (G-SIBs)
Details
E. Bank Size and TBTF
Details
IV. Structural Reform and Ring-fencing
Details
A. Structural reform as an umbrella term
Details
B. Ring-fencing as a structural reform: the concept of ring-fencing
Details
C. Ring-fencing and full separation
Details
a. Digression: The Glass-Steagall Act
Details
1. Reasons for the adoption of the Glass-Steagall Act
Details
2. Full separation
Details
3. Criticism and impact of the Glass-Steagall Act
Details
b. Differences between ring-fencing and full separation
Details
D. Ring-fencing and the activities ban
Details
a. Digression: The Volcker Rule
Details
1. Section 619 Dodd-Frank Act
Details
2. Activities ban
Details
3. Criticism
Details
b. Differences between ring-fencing and the activities ban
Details
V. The Basic Rationale and Goals of Ring-Fencing
Details
A. The basic rationale of ring-fencing
Details
B. Other benefits of ring-fencing
Details
a. Resolvability
Details
b. Subsidies and moral hazard
Details
c. Complexity and size
Details
d. Culture and competition
Details
C. Differences to recovery and resolution
Details
VI. Different Methods of Ring-Fencing
Details
A. Underlying assumption
Details
B. Two methods
Details
a. The defensive method
Details
b. The containment method
Details
VII. Attempt at a Definition
Details
A. Origins of the term “ring-fencing”
Details
B. Ring-fencing outside banking regulation
Details
a. From public utility companies to securitisations
Details
b. Results
Details
C. Ring-fencing in banking regulation
Details
a. Jurisdiction-oriented ring-fencing
Details
b. Activities-oriented ring-fencing
Details
c. Establishing a definition
Details
VIII. Results
Details
100–153
Part II – Legal Developments on EU Level
100–153
Details
I. Liikanen Report
Details
A. Mandate and structure
Details
B. Avenue 1
Details
a. Outline
Details
b. Costs and benefits
Details
C. Avenue 2
Details
a. Outline
Details
b. Costs and benefits
Details
c. Final proposal
Details
D. Results and discussion
Details
a. Reception by stakeholders
Details
b. Criticism of the Liikanen Report
Details
c. Characterisation and method of ring-fencing
Details
II. Commission Draft Regulation
Details
A. Introduction
Details
a. Importance of a harmonized approach
Details
b. Structure
Details
B. Scope of the draft regulation
Details
C. Separation of proprietary trading
Details
a. Prohibitions
Details
b. Discussion
Details
D. The conditional separation of trading activities
Details
a. Trading activities
Details
b. Review of trading activities
Details
c. Separation procedure
Details
E. Rules following a separation
Details
a. Activities restrictions
Details
b. Subgroups
Details
c. Exercise of power
Details
d. Designation
Details
e. Exemption for the United Kingdom
Details
F. Results and discussion
Details
a. Characterisation
Details
b. Implications
Details
c. Reception and criticism
Details
d. Method of ring-fencing
Details
III. Council of the European Union Negotiating Stance
Details
A. Introduction
Details
B. Scope
Details
a. Tiers
Details
b. Negative scope
Details
C. Separation of proprietary trading
Details
a. Mandatory separation
Details
b. Three-step procedure
Details
1. First step: prohibition of proprietary trading
Details
2. Second step: exemptions
Details
3. Third step: identification procedure
Details
c. Results
Details
D. The conditional separation of trading activities
Details
a. Assessment of other trading activities
Details
b. Results
Details
E. Rules following a separation
Details
a. Corporate structure
Details
b. Activity-restrictions
Details
c. Exemption for the United Kingdom
Details
F. Results and discussion
Details
a. Negotiating manifest
Details
b. Watered down
Details
c. Method of ring-fencing
Details
d. Influence of Germany and France
Details
IV. Withdrawal of the File and Alternatives
Details
A. European Parliament
Details
B. Withdrawal
Details
C. Alternatives
Details
a. Starting position
Details
b. Legislative options
Details
c. Existing regimes
Details
1. BRRD
Details
2. SRMR
Details
3. Results
Details
V. Results and Outlook
Details
154–305
Part III – Legal Comparative Analysis
154–305
Details
I. Banking Landscape
Details
A. United Kingdom
Details
a. Importance of the financial centre
Details
b. Number of banks their nature
Details
c. HSBC, Barclays, RBS, Standard Chartered
Details
B. Germany
Details
a. Importance of the financial centre
Details
b. Number of banks and their nature
Details
c. Deutsche Bank
Details
C. Switzerland
Details
a. Importance of the financial centre
Details
b. Number of banks and their nature
Details
c. UBS and Credit Suisse
Details
D. Results
Details
a. Importance of the financial centre
Details
b. Number of banks and their nature
Details
c. G-SIBs
Details
II. Preparatory Work and Legal Sources
Details
A. United Kingdom
Details
B. Germany
Details
C. Switzerland
Details
a. Decision against structural reforms
Details
b. Policy mix and core measure organization
Details
1. Organisational measures
Details
i. Emergency plan
Details
ii. Organisational measures to improve general resolvability
Details
2. Subsidiarity principle
Details
3. TBTF evaluation
Details
c. Legal sources
Details
1. Banking Act and Banking Ordinance
Details
2. Finma emergency plan assessment
Details
D. Results
Details
a. Expert commissions
Details
1. National focus
Details
2. Composition
Details
b. Legal sources
Details
1. Primary, secondary legislation, guidance
Details
2. Principle of legality
Details
3. Transparency
Details
c. Chronology
Details
d. Influence
Details
e. Invasiveness
Details
III. Who Is Subject to the Fence?
Details
A. United Kingdom
Details
a. Personal scope
Details
b. Threshold and exemptions
Details
c. Affected banks
Details
B. Germany
Details
a. Personal scope
Details
b. Threshold
Details
c. Affected banks
Details
C. Switzerland
Details
a. Personal scope
Details
b. Threshold and exemptions
Details
c. Affected banks
Details
D. Results
Details
a. Focus of the scope
Details
b. Personal scope
Details
c. Thresholds
Details
1. Clear cut thresholds?
Details
2. Consolidated basis
Details
3. Setting the threshold
Details
d. Other exemptions
Details
e. Affected G-SIBs
Details
f. Relation to expert commission recommendations
Details
IV. What Activities Fall on Which Side of the Fence?
Details
A. United Kingdom
Details
a. Ring-fenced body
Details
1. Core activities
Details
2. Core services
Details
3. Excluded activities and prohibitions
Details
b. Non-ring-fenced bodies
Details
1. Excluded activities
Details
2. Prohibitions
Details
c. Summary
Details
d. Affected banks
Details
B. Germany
Details
a. Non-ring-fenced body
Details
1. Excluded activities
Details
2. Exceptions
Details
b. Ring-fenced bodies
Details
1. Explicit activity restrictions for the financial trading institution
Details
2. Other activity restrictions for the financial trading institution
Details
i. First starting point: Financial service institution
Details
ii. Deliberate decision or editorial error
Details
iii. Second starting point: Objectives of the Act
Details
iv. Limitations
Details
3. Conclusio
Details
c. Summary
Details
d. Affected banks
Details
C. Switzerland
Details
a. Ring-fenced body
Details
1. Ex ante Separation
Details
i. Caveat
Details
ii. Mere planning?
Details
iii. Three options?
Details
2. Systemically important functions
Details
b. Non-ring-fenced bodies
Details
c. Affected banks
Details
1. UBS
Details
2. Credit Suisse
Details
3. Conclusio
Details
d. Summary
Details
D. Results
Details
a. Activities within the ring-fence
Details
b. Excluded activities
Details
1. Basis of the exclusion
Details
2. Activities
Details
3. Exceptions
Details
c. Ring-fencing method
Details
1. Ring-fencing
Details
2. Method of ring-fencing
Details
d. Flexibility
Details
e. Relation to expert commission recommendations
Details
V. Height of the Fence
Details
A. United Kingdom
Details
a. Capital and liquidity
Details
b. Governance
Details
c. Intragroup transactions and exposures
Details
d. Distributions
Details
e. Continuity of services
Details
B. Germany
Details
a. Financial trading institution
Details
1. Proper business organisation
Details
2. Regulatory requirements of the German Banking Act
Details
b. Capital and liquidity
Details
c. Governance
Details
d. Intragroup transactions and exposures
Details
e. Distributions
Details
f. Continuity of services
Details
C. Switzerland
Details
a. Legal sources
Details
1. Emergency plan assessment
Details
2. Resolvability incentives
Details
3. Relation between emergency plan and resolvability incentives
Details
b. Capital and liquidity
Details
c. Governance
Details
d. Intragroup transactions and exposures
Details
e. Distributions
Details
f. Continuity of services
Details
D. Results
Details
a. Elements of the fence
Details
1. Capital and liquidity
Details
2. Governance
Details
3. Intragroup transactions and exposures
Details
4. Distributions
Details
5. Continuity of services
Details
b. Other findings
Details
1. Character
Details
2. Ring-fencing in Switzerland
Details
i. Generally unnoticed
Details
ii. Special features of the Swiss approach
Details
iii. Considerable fence
Details
3. Ring-fencing
Details
4. Practical relevance
Details
5. Switzerland as a role model for the EU?
Details
VI. Timeline and Full Implementation
Details
A. United Kingdom
Details
B. Germany
Details
C. Switzerland
Details
D. Results
Details
VII. Results and Outlook
Details
306–308
Outlook
306–308
Details
309–342
List of Sources
309–342
Details
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Ring-Fencing in Europe , page 154 - 305
Part III – Legal Comparative Analysis
Autoren
Konstantin Oppolzer
DOI
doi.org/10.5771/9783748903451-154
ISBN print: 978-3-8487-6229-3
ISBN online: 978-3-7489-0345-1
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