What makes a good ‘bad bank’? The Irish, Spanish and German experience
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Other documents of the author: Directorate-General for Economic and Financial Affairs (European Commission); Peresa, Irena; Medina Cas, Stephanie
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Title
What makes a good ‘bad bank’? The Irish, Spanish and German experienceAuthor (s)
DOI
10.2765/848761Date
2016-11-25Abstract
This paper examines the experience of three asset management companies (AMCs) or ʽbad banksʼ established in the euro area following the 2008 global financial crisis. Specifically, it studies NAMA, Sareb and FMS ... [+]
This paper examines the experience of three asset management companies (AMCs) or ʽbad banksʼ established in the euro area following the 2008 global financial crisis. Specifically, it studies NAMA, Sareb and FMS Wertmanagement (FMS). These AMCs were set up to purchase growing nonperforming loans on banks’ balance sheets with the aim of their eventual disposal. The study seeks to identify factors that support an AMC’s success. It also analyses the impact of the European regulatory framework, including the Eurostat rules, State-aid regulations and bank resolution rules, on the AMCs’ design. It also reflects on the way recent changes to EU bank resolution rules now limit the involvement of State aid in AMCs. The study finds that the type of assets transferred and the macroeconomic environment are crucially important for successful asset disposals. The paper also focuses on additional success factors, such as clean asset documentation, a solid valuation process, efficient asset servicing, a strong legal framework and skilled staff. Though challenges remain, the three AMCs have contributed to banking sector stabilisation as they have been undertaken alongside bank restructuring measures. The financial backing of the authorities, decisive in the cases analysed, has however come at a fiscal cost. [-]
Subject
Alemania | Germany | Ayuda Pública | State Aid | Banco | Bank | Crisis Monetaria | Monetary Crisis | España | Spain | Institución Financiera | Financial Institution | Irlanda | Ireland | Política Bancaria | Banking Policy | Política Fiscal | Fiscal Policy | Préstamo | Loan | Resolución Internacional | Resolution
ISBN
978-92-79-54444-6Type
info:eu-repo/semantics/reportPublisher
Publications Office of the European UnionRights
http://rightsstatements.org/vocab/CNE/1.0/
info:eu-repo/semantics/openAccess
info:eu-repo/semantics/openAccess