State guarantees commonly function as financial panacea, allowing states to consolidate banking systems and create intergovernmental funds. Rules surrounding state guarantees were relaxed during the 2007-2008 financial crisis, allowing states to use them for financing small and medium-sized enterprises (SMEs) and workers' severance payments. Despite many multi-level interventions in many areas after the financial crisis, from international treaties to EU regulations, no specific regulation has been put in place to control state guarantees. This book addresses the subject of state guarantees in the Eurozone, and questions the stability of the instruments implemented so far by states and by the European Union. Using a methodology combining law and finance, it examines the tools adopted by European institutions and Member States in the EU's evolving institutional context, in order to evaluate the effectiveness of the tools themselves as well as of the new European institutional framework. It also addresses the unconventional measures adopted by the European Central Bank, its role as safeguard for European state guarantees and its interaction with the European Union and national courts. In From Saviour to Guarantor the authors suggest that the absence of specific regulatory interventions and the variety and vagueness of existing rules has resulted in state guarantees further destabilising public international finance.

While the highly technical measurement techniques and methodologies of Value at Risk have attracted huge interest, much less attention has been focused on how Value at Risk and the risk-adjusted performance measures such as RAROC or economic profit/EVA . can be effectively used to improve a bank s decision making processes. Academic books are typically concerned primarily with measurement techniques, and devote only a small section to describing the applications, usually without discussing the problems that changing organizational processes in banks may have on business units behaviour. Practitioners books are often based on a single experience, presenting the approach that has been pursued by a single bank, but often do not adequately evaluate that approach. In actual practice, the choice of how to use Value at Risk and risk-adjusted performance measures has no single optimal solution, but requires effective decision making that can identify the solution that is consistent with the bank s style of management and coordination mechanisms, and often with characteristics of individual business units as well. In this book, Francesco Saita of Bocconi University argues that even though risk measurement techniques have greatly improved in recent years for market, credit and now also operational risk, capital management and capital allocation decisions are far from becoming purely technical and mechanical. On one hand, decisions about capital management must consider handling different capital constraints (e.g. regulatory vs. economic capital ) and face remarkable difficulties in providing a measure of aggregated ] Value at Risk (i.e. a measure that considers the overall value at risk of the bank after diversification across risk types). On the other hand, the aim of using capital more efficiently through capital allocation cannot be achieved only through a sort of centralized asset allocation process, but rather by designing a Value at Risk limit system and a risk-adjusted performance measurement system that are designed to provide the right incentives to individual business units. This connection between sophisticated and cutting edge risk measurement techniques and practical bank decision making about capital management and capital allocation make this book unique and provide readers with a depth of academic and theoretical expertise combined with practical and real-world understanding of bank structure, organizational constraints, and decisionmaking processes.
*Contains concise, expert analysis of the latest technical VaR measures but without the highly mathematical component of other books
*Discusses practical applications of these measures in the real world of banking, focusing on effective decision making for capital management and allocation
*Author is based at Bocconi University in Milan, Italy, one of the foremost institutions for banking in Europe"

This book aims to integrate the notions of contagion in epidemiology and contagion in financial market crises to discover why emerging markets are so susceptible to financial crises. The author first provides a brief introduction of the contagious spill-over of recent financial market crises and models the pattern of these crises. He finds that the contagion between crises in emerging markets, such as that of the crises in Russia and Brazil in 1998-1999, is explicable, despite the fact that at first sight they appear to have little in common. Finally, Friedrich Sell integrates these findings to outline a proposal for a 'new international financial architecture'. This groundbreaking book will be of interest to scholars of financial economics, emerging economies and international money and finance.

With the passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act and the Riegle Community Development and Regulatory Improvement Act in 1994, some Americans celebrated the dawn of a new banking era. These laws, which provided some relief from regulation, represented the first revision of the Glass-Steagall Act of 1933. In the intervening sixty years, the U.S. banking industry had undergone dramatic changes, both domestically and internationally, and yet the laws associated with banking remained fixed and intransigent. No amount of regulatory flexibility or bankers' ingenuity was able to substitute fully for modernization of the banking laws necessary to keep pace with the revolution in the banking and financial services industries. The new legislation represented a rapid realignment of American banking laws with societal norms; as such, it generated confusion and uncertainty for many bankers and their constituents, for example, stockholders, customers, and employees. Matasar and Heiney examine public data since 1994 in an effort to fully apprise scholars and practitioners of the changes that have irrevocably altered the landscape of American banking.

The Riegle-Neal Act and the Riegle Act were the first blows to the dominance of Depression-era legislation in banking. The second was the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which eliminated major portions of the Glass-Steagall Act. This study, which analyzes data from 1994 to 1999, ably captures and isolates the effects on American banking of the twin Riegle laws alone, with the noted exceptions of changed circumstances that may have resulted from other environmental factors (but not from other banking legislation). The focus here is on interstate banking experiences. Matasar and Heiney's analysis reveals the direction that changes associated with the law are likely to take and thus serves as a baseline for future research and analysis.

The terms "Eurodollar" and "Eurocurrency" were widely used in the 1970s, a time when the US dollar was prevalently traded in Europe. Later, the Eurodollar market was extended to Asia, especially Singapore and Hong Kong, and to cover a wider range of non-local currencies. But international markets have changed, with Renminbi set to become the world's dominant offshore currency. Leading bankers, analysts, bank supervisors, economists, journalists, professors, and lawyers contributed to Investing in Asian Offshore Currency Markets, exploring various issues regarding offshore currency markets in Asia, and especially the challenges and issues in building the offshore market for Renminbi.

Much critical attention has been given in recent years to market and credit risks, which have a significant effect on corporate and financial operations and must be understood and managed with care. While these areas have rightly received considerable scrutiny, another critical dimension of financial risk - based on corporate liquidity - has been largely overlooked. Liquidity risk is the risk of loss arising from an inability to quickly realise asset value or obtain funding and can be damaging if not properly considered or actively managed. Lack of liquidity can lead to large losses in asset/liability portfolios and off balance sheet activities and in extreme cases can trigger financial distress and insolvency. Liquidity Risk is a comprehensive treatment of the topic focusing on the nature of the risk, problems that arise in asset and funding liquidity and mechanisms that can be developed to monitor, measure and control such risks.

Financial capital, whether mediated through the financial market or Foreign Direct Investment has been a key factor in European economic growth. This book examines the interaction between European and global financial integration and analyses the dynamics of the monetary sector and the real economy in Europe. The key analytical focus is on the theoretical and empirical dynamics of financial markets in Europe, however, it also provides regional case studies of key institutional developments and lessons from foreign direct investment. There is a broad range of findings for Central, Eastern and Western Europe as well as EU Partner Countries. Crucially the analysis includes new approaches and options for solving the transatlantic banking crisis and suggests policy innovations for a world with unstable financial markets.

For over fifty years, Eli Schwartz has inspired generations of economists through his prolific publications and dedicated in teaching. In 2008, the Martindale Center for the Study of Private Enterprise at Lehigh University invited prominent academics and practitioners-including Nobel Prize recipients, Robert Solow and Harry Markowitz, and former Chairman of the Economic Advisers to Ronald Reagan, Murray Weidenbaum-to contribute pieces that reflect their own approaches to issues that Schwartz has explored over the long span of his career. The twelve original essays cover a range of topics, including tax reform, corporate finance, fiscal policy, banking, economic growth, and globalization, representing a variety of methodologies, including economic theory, econometrics, and case analysis. The collection emphasizes the underlying connections among seemingly disparate facets of economic activity, and underscores the tremendous influence of Schwartz on economic analysis, policy, and leadership today.

The papers in this volume empirically examine three evolving and important topics in financial economics: the determinants of monetary and bank efficiency and the key factors that contribute to successful monetary and banking operations; the institutional factors that enhance or detract from the efficient manner in which financial markets work; and the macro, micro, and social factors that impact stock valuation and optimum portfolio selection.

The book presents arguments against the taxpayers'-funded bailing out of failed financial institutions, and puts forward suggestions to circumvent the TBTF problem, including some preventive measures. It ultimately argues that a failing financial institution should be allowed to fail without fearing an apocalyptic outcome.

This book provides an account of the principal phases in the development of the English banking system, and goes on to analyse the financial structure of the economy of the UK. The book focuses in detail on the regulatory and supervisory aspects of the UK banking system, and the interactions between the structural aspects of the banking and supervisory system.

This book provides two important contributions to existing theories in the financial innovation literature. First, it extends the existing literature of innovation orientation to a completely new field and construct that is based on a religious imperative as a framework within which financial innovation is constrained. It explains how an innovation orientation in IFIs can be directed within religious rules, which indicates that innovation orientation in IFIs is a learning philosophy. Second, the book introduces and examines the plasticity of Shariah as a shared boundary object and its dynamic role in managing tension and conflicting values in the financial innovation process. Furthermore, building on the empirical results, the study illustrates the insights that each theoretical lens affords into practices of collaboration and develops a novel analytical framework for understanding religious orientation towards financial innovation. This practical contribution, of the developed framework, could form the basis for a standardised framework for the Islamic finance industry. The book concludes by noting the policy and managerial implications of its findings and provides directions for further research.

This book investigates the main features of the evolution of the cooperative banking model in European countries, using 'country case-study' analysis. Structured in two parts, the first deals with a sample of countries that joined European Union before 2000; the second part with a sample of other newly admitted European Union member countries.

A credible central bank can effectively lead the process of financial sector reform in a developing country. This book discusses central banking issues and offers a clear path to building credible central banks in emerging economies.

A sensational and compelling insider's view that lifts the lid on the fast-paced and dazzling world of derivatives, now in a smaller, paperback format.

Traders Guns and Money is a wickedly comic expose of the culture, games and pure deceptions played out every day in trading rooms around the world. And played out with other people's money.

This sensational insider's view of the business of trading and marketing derivatives, explains the frighteningly central role that derivatives and financial products played in the global financial crisis.

This worldwide bestseller reveals the truth about derivatives: those financial tools memorably described by Warren Buffett as 'financial weapons of mass destruction'. Traders, Guns and Money will introduce you to the players and the practices and reveals how the real money is made and lost.

This book analyses how the financial system adjusts to institutional changes such as new technology, political tendencies, cultural differences, new business models, and government interactions. It emphasises how different institutional settings affect firms' borrowing and increases our understanding of how efficient financial markets are formed.

Despite considerable progress on political and economic convergence over the last decade, financial structures of individual countries within the EU remain diverse. This book considers the future prospects of the banking industry in the context of enlargement, application of the IFRS and a potential new member country, Turkey.

"Microfinance" is a comprehensive analysis of the operational, managerial and financial aspects of microfinance. The text provides a contemporary analysis of microfinance business covering the risks, returns and management issues associated with such activity. It analyses the main products and services available in modern microfinance and explains how to manage the financial and non financial risks involved. The book also provides a performance and monitoring model for microfinance programmes and describes how microfinance can be regulated.

In today's increasingly global and integrated financial climate, there is an amplified need for cooperation between regulators and supervisors across the globe in order to promote economic growth and maintain competitive markets. However, idiosyncrasies remain within local markets, and for those wishing to participate within them, it is necessary to understand the distinctive qualities of each. This book explores the intermediaries of the Italian financial system. It examines the banks, investment services, electronic payment institutions, insurance companies and credit rating agencies functioning in the country, to explore how Italian regulation functions within the context of a wider harmonizing trend. The authors present a study on the current control models of the Italian markets in the wake of changes induced by the privatization of public banks, the increased size and complexity of the intermediaries, the increased level of competition, and the internationalization of the financial innovation. They explain how the country's financial markets are controlled by a combination of bodies, including the State, the authorities and the market participants themselves.

Do you know how banking and money will look like in the new digital age? This book collects the voices of leading scholars, entrepreneurs, policy makers and consultants who, through their expertise and keen analytical skills, are best positioned to picture from various angles the ongoing technological revolution in banking and finance. You will learn how lending and borrowing can exist without banks; how new forms of money can compete to better serve different society needs; how new technologies are banking the unbanked communities in the poorest parts of the world, and how ideas and small projects can be financed by the crowds without the need to rely upon banks. You will learn how, in the new digital age, we will interact with new self-organised and autonomous companies that operate without any human involvement, based on a set of programmed and incorruptible rules. You will learn that new business models will emerge thanks to technology-enabled platforms, upon which one can build new forms of non-hierarchical cooperation between strangers. And you will also learn that new forms of risks and threats are emerging that will destabilise our systems and jeopardise the stability of our financial order.

The book covers topics related to banking regulation and credit risk modelling. The proposed rules are presented and key issues regarding implementation of the accord identified. The model used to calibrate the capital requirements under Basel 2 is analyzed and projected forward to present what could be key new elements in the future Basel 3 regulation. A CD-ROM is included to illustrate regulator models.

This book introduces the reader to the 'world of finance', more exactly to one core activity: investment banking. Analysing the practices of traders, analysts, brokers and bankers it reveals how their contrasting perspectives on shares are put to use and the consequences this has for investment banks, corporations, investors and the stock markets.

Banking Reforms in South-East Europe gives a critical and detailed overview of banking system restructuring in the transitional countries of South-Eastern Europe - Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania and Yugoslavia - and offers suggestions for future reforms. The book opens with a comparison of the experiences of Central European advanced transitional economies with those of the Balkan countries. Proposals are put forward for ways in which positive aspects of the Central European experience can be applied to banking reform in the Balkans. The authors examine the importance of regional collaboration for the overall economic and social transition in the region, and consider whether it can facilitate the next stage of banking reform. They also analyse the results of currency board arrangements as a possible alternative to classical central banking, using the experiences of Bulgaria, Bosnia and the Yugoslav Republic of Montenegro. The book concludes with an analysis of the experience of individual economies and consists of a number of country-specific banking studies, covering all the transitional economies of South-East Europe. The book will be of great interest to both scholars of transition economies and policymakers in finance and financial institutions.

Banking and investment in Mexico have changed radically over the past decade, and the economic events that prompted these changes will have a significant impact on Mexico's role in regional and world financial markets. Adams traces the evolution of Mexico's banking and investment activities, reviews current conditions and their implications for future investment opportunities in Mexico, and makes clear that what happens to Mexico's economy and political stability will have major implications for what happens elsewhere in the world. One of the first books to look at banking and investment in Mexico after the peso crash of 1994-1995, with a highly detailed bibliography and notes, Adams's study will be important reading for international business, finance, and investment professionals and for their colleagues with similar interests throughout the academic community.

The fate of both Mexico and the United States is that the two countries are forever tied by geography. The historical evolution of the dual interaction between the peoples of these two nations is and will be significant for the future of both countries. With this in mind, the book is divided into chapters reviewing such themes as the interaction and historical financial events that transpired during the advent of the North American Free Trade Agreement (NAFTA) and the expansion of cross-border financial and investment services, as well as a framework and background review of the events leading up to and resulting from the devaluations of the 1970s and 1980s, and more recently the evolution of the peso crisis of 1994-1995. The imperceptible yet gradual economic integration of the two economies has required time in developing, while not always being seamless in its implementation and transition. American macroeconomic policy has long had a direct impact on the economy of Mexico, as is evidenced by the impact of U.S. interest rates on the financial underpinnings of the Mexican treasury and the banking system to assist with the overall economic growth of the nation. An appreciation for the historically sensitive issues and perspectives, be they nationalization of the oil industry, immigration, or market access for foreign financial services, is paramount to a fuller understanding of doing business on both sides of the border.