The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience
Asset management companies have been used to address the overhang of bad debt in the financial system. There are two main types of asset management company: those set up to expedite corporate restructuring and those established for rapid disposal o...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2000/02/438381/use-asset-management-companies-resolution-banking-crises-cross-country-experience http://hdl.handle.net/10986/22336 |
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okr-10986-223362021-04-23T14:04:07Z The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience Klingebiel, Daniela ACCOUNTING STANDARDS ASSET DISPOSITION AGENCIES ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET PRICES ASSET RECOVERY ASSET SALES ASSET TRANSFERS ASSET VALUE AUCTION BAD DEBT BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK RECAPITALIZATION BANK RESTRUCTURING BANK RUNS BANKING CRISES BANKING CRISIS BANKING CRISIS MANAGEMENT BANKING DISTRESS BANKING INDUSTRY BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOOK VALUE CAPITAL BASE CENTRAL BANK COLLATERAL COMMERCIAL BANKS COMPANY MANAGEMENT CONSOLIDATED SUPERVISION CONSOLIDATION CORPORATE RESTRUCTURING CREDIT DISCIPLINE CROSS COUNTRY EXPERIENCE CROSS-COUNTRY EXPERIENCE CURRENT PRICES DEBT DEBT RELIEF DEBT RESTRUCTURING DEPOSIT TRANSFERS DEPOSITORS DISCLOSURE DISPOSITION OF IMPAIRED ASSETS FAILED BANKS FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FORECLOSURE LAWS FRAUDULENT ASSETS FUTURE VALUE IMPAIRED ASSETS LAWS LEGAL FRAMEWORK LEVEL PLAYING FIELD LIQUIDATION MARKET VALUE MONEY CENTER BANKS MORTGAGE LOANS POLITICAL INTERFERENCE PORTFOLIO PRIVATIZATION PROBLEM LOANS PURCHASE ASSUMPTION TRANSACTIONS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESTRUCTURING AGENCIES SAVINGS SECURITIES SECURITIZATION SMALL BANKS SOLVENCY SUBSIDIARIES SYSTEMIC BANK RESTRUCTURING SYSTEMIC BANKING CRISES SYSTEMIC BANKING DISTRESS TRANSPARENCY Asset management companies have been used to address the overhang of bad debt in the financial system. There are two main types of asset management company: those set up to expedite corporate restructuring and those established for rapid disposal of assets. A review of seven asset management companies reveals a mixed record. In two of three cases, asset management companies for corporate restructuring did not achieve their narrow goal of expediting bank or corporate restructuring, suggesting that they are not good vehicles for expediting corporate restructuring. Only a Swedish asset management company successfully managed its portfolio, acting sometimes as lead agent in restructuring - and helped by the fact that the assets acquired had mostly to do with real estate, not manufacturing, which is harder to restructure, and represented a small fraction of the banking systems assets, which made it easier for the company to remain independent of political pressures and to sell assets back to the private sector. Asset management companies used to dispose of assets rapidly fared somewhat better. Two of four agencies (in Spain and the United States) achieved their objectives, suggesting that asset management companies can be used effectively for narrowly defined purposes of resolving insolvent and inviable financial institutions and selling off their assets. Achieving these objectives required an easily liquefiable asset - real estate - mostly professional management, political independence, adequate bankruptcy and foreclosure laws, appropriate funding, skilled resources, good information and management systems, and transparent operations and processes. The other two agencies (in Mexico and the Philippines) were doomed from the start, as governments transferred to them politically motivated loans or fraudulent assets, which were difficult for a government agency susceptible to political pressure and lacking independence to resolve or sell off. 2015-07-29T15:47:44Z 2015-07-29T15:47:44Z 2000-02 Working Paper http://documents.worldbank.org/curated/en/2000/02/438381/use-asset-management-companies-resolution-banking-crises-cross-country-experience http://hdl.handle.net/10986/22336 English en_US Policy Research Working Paper;No. 2284 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Europe and Central Asia Mexico Philippines Spain Sweden United States |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING STANDARDS ASSET DISPOSITION AGENCIES ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET PRICES ASSET RECOVERY ASSET SALES ASSET TRANSFERS ASSET VALUE AUCTION BAD DEBT BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK RECAPITALIZATION BANK RESTRUCTURING BANK RUNS BANKING CRISES BANKING CRISIS BANKING CRISIS MANAGEMENT BANKING DISTRESS BANKING INDUSTRY BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOOK VALUE CAPITAL BASE CENTRAL BANK COLLATERAL COMMERCIAL BANKS COMPANY MANAGEMENT CONSOLIDATED SUPERVISION CONSOLIDATION CORPORATE RESTRUCTURING CREDIT DISCIPLINE CROSS COUNTRY EXPERIENCE CROSS-COUNTRY EXPERIENCE CURRENT PRICES DEBT DEBT RELIEF DEBT RESTRUCTURING DEPOSIT TRANSFERS DEPOSITORS DISCLOSURE DISPOSITION OF IMPAIRED ASSETS FAILED BANKS FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FORECLOSURE LAWS FRAUDULENT ASSETS FUTURE VALUE IMPAIRED ASSETS LAWS LEGAL FRAMEWORK LEVEL PLAYING FIELD LIQUIDATION MARKET VALUE MONEY CENTER BANKS MORTGAGE LOANS POLITICAL INTERFERENCE PORTFOLIO PRIVATIZATION PROBLEM LOANS PURCHASE ASSUMPTION TRANSACTIONS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESTRUCTURING AGENCIES SAVINGS SECURITIES SECURITIZATION SMALL BANKS SOLVENCY SUBSIDIARIES SYSTEMIC BANK RESTRUCTURING SYSTEMIC BANKING CRISES SYSTEMIC BANKING DISTRESS TRANSPARENCY |
| spellingShingle |
ACCOUNTING STANDARDS ASSET DISPOSITION AGENCIES ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET PRICES ASSET RECOVERY ASSET SALES ASSET TRANSFERS ASSET VALUE AUCTION BAD DEBT BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK RECAPITALIZATION BANK RESTRUCTURING BANK RUNS BANKING CRISES BANKING CRISIS BANKING CRISIS MANAGEMENT BANKING DISTRESS BANKING INDUSTRY BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOOK VALUE CAPITAL BASE CENTRAL BANK COLLATERAL COMMERCIAL BANKS COMPANY MANAGEMENT CONSOLIDATED SUPERVISION CONSOLIDATION CORPORATE RESTRUCTURING CREDIT DISCIPLINE CROSS COUNTRY EXPERIENCE CROSS-COUNTRY EXPERIENCE CURRENT PRICES DEBT DEBT RELIEF DEBT RESTRUCTURING DEPOSIT TRANSFERS DEPOSITORS DISCLOSURE DISPOSITION OF IMPAIRED ASSETS FAILED BANKS FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FORECLOSURE LAWS FRAUDULENT ASSETS FUTURE VALUE IMPAIRED ASSETS LAWS LEGAL FRAMEWORK LEVEL PLAYING FIELD LIQUIDATION MARKET VALUE MONEY CENTER BANKS MORTGAGE LOANS POLITICAL INTERFERENCE PORTFOLIO PRIVATIZATION PROBLEM LOANS PURCHASE ASSUMPTION TRANSACTIONS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESTRUCTURING AGENCIES SAVINGS SECURITIES SECURITIZATION SMALL BANKS SOLVENCY SUBSIDIARIES SYSTEMIC BANK RESTRUCTURING SYSTEMIC BANKING CRISES SYSTEMIC BANKING DISTRESS TRANSPARENCY Klingebiel, Daniela The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| geographic_facet |
East Asia and Pacific Europe and Central Asia Mexico Philippines Spain Sweden United States |
| relation |
Policy Research Working Paper;No. 2284 |
| description |
Asset management companies have been
used to address the overhang of bad debt in the financial
system. There are two main types of asset management
company: those set up to expedite corporate restructuring
and those established for rapid disposal of assets. A review
of seven asset management companies reveals a mixed record.
In two of three cases, asset management companies for
corporate restructuring did not achieve their narrow goal of
expediting bank or corporate restructuring, suggesting that
they are not good vehicles for expediting corporate
restructuring. Only a Swedish asset management company
successfully managed its portfolio, acting sometimes as lead
agent in restructuring - and helped by the fact that the
assets acquired had mostly to do with real estate, not
manufacturing, which is harder to restructure, and
represented a small fraction of the banking systems assets,
which made it easier for the company to remain independent
of political pressures and to sell assets back to the
private sector. Asset management companies used to dispose
of assets rapidly fared somewhat better. Two of four
agencies (in Spain and the United States) achieved their
objectives, suggesting that asset management companies can
be used effectively for narrowly defined purposes of
resolving insolvent and inviable financial institutions and
selling off their assets. Achieving these objectives
required an easily liquefiable asset - real estate - mostly
professional management, political independence, adequate
bankruptcy and foreclosure laws, appropriate funding,
skilled resources, good information and management systems,
and transparent operations and processes. The other two
agencies (in Mexico and the Philippines) were doomed from
the start, as governments transferred to them politically
motivated loans or fraudulent assets, which were difficult
for a government agency susceptible to political pressure
and lacking independence to resolve or sell off. |
| format |
Working Paper |
| author |
Klingebiel, Daniela |
| author_facet |
Klingebiel, Daniela |
| author_sort |
Klingebiel, Daniela |
| title |
The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| title_short |
The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| title_full |
The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| title_fullStr |
The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| title_full_unstemmed |
The Use of Asset Management Companies in the Resolution of Banking Crises : Cross-Country Experience |
| title_sort |
use of asset management companies in the resolution of banking crises : cross-country experience |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2000/02/438381/use-asset-management-companies-resolution-banking-crises-cross-country-experience http://hdl.handle.net/10986/22336 |
| _version_ |
1764450625607696384 |