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Zombie Bank
A zombie bank is a financial institution that has an economic net worth less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support. The term was first used by Edward Kane in 1987 to explain the dangers of tolerating a large number of insolvent savings and loan associations and applied to the emerging Japanese crisis in 1993. A zombie can continue to operate and even to grow as long as creditors remain confident in the relevant government's ability to extract the funds needed to back up its promises from current or future taxpayers. But when this ability seems doubtful, zombie institutions face runs by uninsured depositors and margin calls from counterparties in derivatives transactions. Etymology In an article published in the Mar/Apr 1992 issue of ''Society'' entitled "The Savings and Loan Insurance Mess," Edward Kane expanded on the source of the analogy. "Although the Savings and Loan (S&L) ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Lost Decade (Japan)
The was a period of economic stagnation in Japan caused by the asset price bubble's collapse in late 1991. The term originally referred to the 1990s, but the 2000s (Lost 20 Years, 失われた20年) and the 2010s (Lost 30 Years, 失われた30年) have been included by commentators as the phenomenon continued. From 1991 to 2003, the Japanese economy, as measured by GDP, grew only 1.14% annually, while average real growth rate between 2000 to 2010 was about 1%, both well below other industrialized nations. Debt levels continued to rise in response to the Global Financial Crisis in Great Recession in 2008, the Tōhoku Earthquake and Tsunami and Fukushima Nuclear Disaster in 2011, and with the COVID-19 pandemic, the subsequent recession in 2020 further damaged the Japanese economy. Broadly impacting the entire Japanese economy, over the period of 1995 to 2007, GDP fell from $5.33 trillion to $4.36 trillion in nominal terms, real wages fell around 5%, while the country e ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Institution
Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial institutions: # Depository institutions – deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; # Contractual institutions – insurance companies and pension funds # Investment institutions – investment banks, underwriters, and other different types of financial entities managing investments. Financial institutions can be distinguished broadly into two categories according to ownership structure: * Commercial banks * Cooperative banks Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
United States Of America
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territories, nine Minor Outlying Islands, and 326 Indian reservations. The United States is also in free association with three Pacific Island sovereign states: the Federated States of Micronesia, the Marshall Islands, and the Republic of Palau. It is the world's third-largest country by both land and total area. It shares land borders with Canada to its north and with Mexico to its south and has maritime borders with the Bahamas, Cuba, Russia, and other nations. With a population of over 333 million, it is the most populous country in the Americas and the third most populous in the world. The national capital of the United States is Washington, D.C. and its most populous city and principal financial center is New York City. Paleo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bad Banks
''Bad Banks'' is a German-Luxembourgish television series first aired in February 2018. In March 2018, it was renewed for a second season. In the U.S., the series was acquired by Hulu. Production Production was carried out by Federation Entertainment and the first season was filmed in Berlin, Frankfurt am Main, London and Luxembourg. Release The first series consisting of six episodes was premiered in Berlin in February 2018 and broadcast on ARTE on March 2, 2018. Subsequently, U.S. network Hulu acquired the series. In August 2018, the series was released in the Netherlands on the channel AVROTROS. The series is also available on Netflix in Germany, Luxembourg, Netherlands, Switzerland and France. Series 1 & 2 are both available in the UK from Channel 4 / Walter Presents Walter Presents is a video-on-demand service of the UK's Channel 4, part of its All 4 online platform. Launched on 3 January 2016, it specialises in foreign-language drama and comedy with English sub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Zombie Company
In political economy, a zombie company is a company that needs bailouts in order to operate, or an indebted company that is able to repay the interest on its debts but not repay the principal. Description Zombie companies are indebted businesses that, although generating cash, after covering running costs, and fixed costs (wages, rates, rent) only have enough funds to service the interest on their loans, but not the debt itself. As such, they are generally dependent on the refinancing of maturing debt for their continued existence, and may face solvency risks should interest rates rise or investors withdraw from further financing. History The term "zombie company" was applied to Japanese firms supported by Japanese banks during the period known as the " Lost Decade" after the collapse of the Japanese asset price bubble in c.1990. Japanese banks continued to support weak or failing firms. The retailer Daiei is an example of a large company that expanded greatly during the period ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bridge Bank
A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found. While national laws vary, the bridge bank is usually established by a publicly backed deposit insurance organisation or financial regulator and may be instituted to avoid systemic risk and provide an orderly transition avoiding negative effects such as bank runs. Typically, the tasks of a bridge bank are to ensure seamless continuity of banking operations by: * Assuming the deposits of and honouring the commitments of the failed bank, so that service to retail clients is not disrupted * Servicing adequately secured existing loans to avoid their premature interruption or termination * Assuming other existing assets, liabilities or functions of the defunct bank at the discretion of the regulator These tasks are carried out on a temporary basis (usually for no more than two or three years) to provide time to find a buyer for the bank as a going co ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bad Bank
A bad bank is a corporate structure which isolates illiquid and high risk assets (typically non-performing loans) held by a bank or a financial organisation, or perhaps a group of banks or financial organisations. A bank may accumulate a large portfolio of debts or other financial instruments which unexpectedly become at risk of partial or full default. A large volume of non-performing assets usually make it difficult for the bank to raise capital, for example through sales of bonds. In these circumstances, the bank may wish to segregate its good assets from its bad assets through the creation of a bad bank. The goal of the segregation is to allow investors to assess the bank's financial health with greater certainty. A bad bank might be established by one bank or financial institution as part of a strategy to deal with a difficult financial situation, or by a government or some other official institution as part of an official response to financial problems across a number of ins ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Yalman Onaran
Yalman Onaran is a Turkish-born American financial journalist. Onaran came to the United States in 1987 to study at the College of Wooster in Wooster, Ohio. After finishing Columbia University's School of Journalism, and the Columbia University School of International and Public Affairs, Onaran began working as a reporter. Life and career Onaran was born in Istanbul and moved to the United States to attend the College of Woostet from which he graduated in 1991. Onaran earned his graduate degree from Columbia University's School of Journalism, and from its School of International and Public Affairs. Onaran taught in schools before he became a full-time correspondent for the Associated Press, and moved back to Ankara, Turkey in 1995 to cover wars and politics. Onaran found himself covering the war zones first, then switched to financial journalism. opening the company's Istanbul bureau. Onaran has worked for Bloomberg News since 1998 in various capacities including as Istanbul bu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Non-performing Asset
A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and is often presented as preventing banks from lending more to businesses and consumers, which in turn slows down economic growth (although this theory is disputed). In the European Union, the management of the NPLs resulting of the global financial crisis of 2008 has become a politically sensitive topic, culminating in 2017 with the decision by the Council to task the European Commission to launch an action plan to tackle NPLs. The action plan supports the fostering of a secondary market for NPLs and the creation of Asset Management Companies (aka bad bank). In December 2020, this action plan was revised in the wake of the Covid19 pandemic crisis. Definition Non-performing loans are generally recognised as per the following criteria: * Pay ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Moral Hazard
In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place. Moral hazard can occur under a type of information asymmetry where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a principal–agent problem, where one party, called an agent, acts on behalf of another party, called the principal. If the agent has more information about his or her actions or intentions than the princi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Zombie Company
In political economy, a zombie company is a company that needs bailouts in order to operate, or an indebted company that is able to repay the interest on its debts but not repay the principal. Description Zombie companies are indebted businesses that, although generating cash, after covering running costs, and fixed costs (wages, rates, rent) only have enough funds to service the interest on their loans, but not the debt itself. As such, they are generally dependent on the refinancing of maturing debt for their continued existence, and may face solvency risks should interest rates rise or investors withdraw from further financing. History The term "zombie company" was applied to Japanese firms supported by Japanese banks during the period known as the " Lost Decade" after the collapse of the Japanese asset price bubble in c.1990. Japanese banks continued to support weak or failing firms. The retailer Daiei is an example of a large company that expanded greatly during the period ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Outright Monetary Transactions
Outright Monetary Transactions ("OMT") is a program of the European Central Bank under which the bank makes purchases ("outright transactions") in secondary, sovereign bond markets, under certain conditions, of bonds issued by Eurozone member-states. The program was presented by its supporters as a principal manifestation of Mario Draghi's (July 2012) commitment to do "whatever it takes" to preserve the euro. OMT is considered by the European Central Bank once a Eurozone government asks for financial assistance. The Eurozone has established the European Stability Mechanism and the European Financial Stability Facility bailout funds in order to meet the challenges of the European debt crisis. From these funds and through OMT, the Eurozone's central bank can, henceforth, buy government-issued bonds that mature in 1 to 3 years, provided the bond-issuing countries agree to certain domestic economic measures – the latter being the so-called term of "conditionality". The aim of the prog ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
