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Flight 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 2024Sustainable finance: perspectives on some of the difficult questions
This article explores some of the current thinking behind “sustainable finance”. After briefly describing what is involved and offering up some perspectives, it raises questions and sets out modest proposals in reply. Several different questions are raised but the common theme explored is – whether or not sustainable finance as currently envisaged risks making the situation any worse than it already is.
19 March 2024Are 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 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 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 2024Fixed and floating charges: still favouring absolutism over multi-factored nuance
The academics did not fare well in Re Avanti Communications Ltd (in admin) [2023] EWHC 940 (Ch). Edwin Johnson J determined that the security in issue was fixed, not floating, but not without finding himself in respectful disagreement with Beale, Bridge, Goode (if only by book title), Gullifer and Worthington. It is perhaps predictable that one of us might rush to a defence. I hesitated, appreciating that judges are not similarly free. But the issue is important, and the approach advocated in Avanti appears, with the greatest respect, and even greater admiration for the unravelling of security documents needed in that case, to be unsupported by the cases and unworkable in practice. In short, even if the answer is right (space prevents that being addressed here), the means of reaching it is surely not. What follows seeks to defend that claim, and also to address further issues raised in Avanti which continue to create unnecessary confusion in this area.11 1
18 March 2024Rethinking rights of use as an English law concept after Brexit
The enforceability of rights of use in English law was often doubted until legislation implemented the EU Financial Collateral Directive in 2003. Statutory safeguards are likely to be retained in a similar form post-Brexit but are not comprehensive nor free from uncertainties. This Spotlight article argues that it is time to rationalise rights of use as a valid concept under English common law.
18 March 2024“Debtor-in-possession” processes and moratoria in English restructuring and insolvency law: a hesitant journey
This Spotlight article explores the efficacy of the relatively new moratorium procedure introduced under the Corporate Insolvency and Governance Act 2020 and whether the existing domestic legislation already housed a more effective debtor-in-possession rehabilitative procedure in the form of the “light-touch” administration and if so, why it has thus far been largely overlooked.
18 March 2024Crying wolf: the effect of sub-participants exercising control over lenders in the medium-term loan market
In this Spotlight article Matthew Hoyle considers the effect that secondary duties in sub-participation agreements (duties which control the principal lender’s exercise of powers) may have on the validity of the exercise of rights and powers in the underlying loan agreement.
18 March 2024
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