Spotlight
56
Go to page
of
6
Are leveraged LDI strategies lawful?
In this Spotlight article, Richard Salter KC discusses the legality of the use by defined benefit pension schemes of repos to achieve leverage as part of their liability driven investment (LDI) schemes.
19 March 2024Governance to keep net zero transitions on track
This Spotlight article sets out a governance framework – comprising robust board oversight, strong alignment mechanisms, and regular external validation – that companies can deploy to ensure that their net zero pledges stay on course. In addition, it illustrates how firms in different sectors are applying the governance measures discussed herein.
19 March 2024Flight of the deposits
As illustrated by the recent failure of Silicon Valley Bank, N.A. (SVB) and the stabilisation of its UK subsidiary Silicon Valley Bank UK Limited (SVBUK), this Spotlight article examines how the flight of uninsured deposits from banks in financial difficulty can be a decisive factor that tips them towards a resolution process or even insolvency.
19 March 2024A wolf in sheep’s clothing: are transfers of economic interests undermining privity of contract in the medium-term loan market?
In this Spotlight article Graham Penn considers how recent changes to the form and legal substance of sub-participation agreements (and other more conventional credit derivatives) are undermining privity of contract between the borrower and its lenders and creating a form of privity with the sub-participant.
19 March 2024Financial Services and Markets Bill: from retained EU law, to revocation and restatement
The Financial Services and Markets Bill 2022-23 (FSM Bill) makes way for potentially sweeping reforms to the UK’s post-Brexit financial services regulatory framework.
19 March 2024The urgent need for better law and rule making: challenges and solutions
This article, the second of two (see ‘Risk elimination by legislating: the limits of the law and challenges of reality’ (2023) 5 JIBFL 287) looking at significant policy making challenges, argues that too much recent legislation and regulation is of poor quality, often developed with good intentions but in silos, without effective consultation, proportionality or consistent principle. Too much is created so policy makers can be seen to have “done something” when it will not address the real goals. The article proposes possible solutions, including changing policy maker incentives and the creation of a new Parliamentary Select Committee to introduce accountability for legislative and regulatory outcomes, comparable to spending accountability.
19 March 2024Are the times ripe for “super senior” capital structures that include term loan debt?
In this Spotlight article Francesco Lione considers the pros and cons for rolling out “super senior” capital structures that include term loan debt, in addition to or as an alternative to secured bonds.
19 March 2024Increasing interest? Hedging considerations in light of rising interest rates
If what goes up must come down, then what comes down will go back up; such is the case with interest rates. Taking approximate figures for three-month ICE GBP LIBOR (source: Bloomberg): an increase in that rate from 0.26 bps on 31 December 2021, to 3.36 bps on 1 November 2022, appears steep. It is easy to forget that the same rate was 6.3 bps on 30 September 2008. The present rising interest rate environment is refocussing the minds of borrowers on the importance of hedging interest rate risk.
19 March 2024The bubbling emerging market crisis and what the world should do about it
A silent wave of financial stress is running through world financial markets. The proximate cause of the crisis is the combination of COVID-debt and a jump in the US dollar. Fighting the dollar’s appreciation with higher interest rates on debt will push the world into crisis and recession. To forestall the worst, the IMF Board must immediately: – increase access to its unconditional rapid financing facilities; – increase access to its unconditional rapid financing facilities; – temporarily suspend interest rate surcharges; – fulfil their commitment to rechannel to developing countries at least $100bn of its recently issued special drawing rights (SDRs) that give holders automatic access to liquidity; and – agree to a new $650bn SDR allocation. Delay will spread social and economic collapse that will reverberate worldwide. Let us not be quick to save banks but slow to save countries.
19 March 2024Risk elimination by legislating: the limits of the law and challenges of reality
This Spotlight article, the first of two looking at significant policy making challenges, argues that legislators and regulators too often seek to avoid and even eliminate risks, at disproportionate social and economic cost to the desired policy outcomes. This reflects challenges in setting better policy goals. It gives examples across financial services and other sectors. Accountability is needed to achieve outcomes, but not all failures or bad outcomes require change of law or regulation. The balance between improving standards and real outcomes on the one hand, with controlling social and economic costs on the other, needs more complex consideration and comprehensive cost-benefit assessment.
19 March 2024
Go to page
of
6
