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 a country's financial system - by expediting corporate restructuring or rapidly disposing of corporate assets. A study of seven cases suggests that such companies tend to be ineffective at corporate restructuring a...
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Format: | Elektronisch E-Book |
Sprache: | English |
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Washington, D.C
The World Bank
2000
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Zusammenfassung: | Asset management companies have been used to address the overhang of bad debt in a country's financial system - by expediting corporate restructuring or rapidly disposing of corporate assets. A study of seven cases suggests that such companies tend to be ineffective at corporate restructuring and are good at disposing of assets only when they're used to meet fairly narrow objectives in the presence of certain factors: an easily liquefiable asset (such as real estate), mostly professional management, political independence, adequate bankruptcy and foreclosure laws, skilled resources, appropriate funding, good information and management systems, and transparent operations and processes. - 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 system's 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. |
Beschreibung: | 1 Online-Ressource (58 Seiten)) |
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520 | 3 | |a Asset management companies have been used to address the overhang of bad debt in a country's financial system - by expediting corporate restructuring or rapidly disposing of corporate assets. A study of seven cases suggests that such companies tend to be ineffective at corporate restructuring and are good at disposing of assets only when they're used to meet fairly narrow objectives in the presence of certain factors: an easily liquefiable asset (such as real estate), mostly professional management, political independence, adequate bankruptcy and foreclosure laws, skilled resources, appropriate funding, good information and management systems, and transparent operations and processes. - 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. | |
520 | 3 | |a 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 system's 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. | |
520 | 3 | |a 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. | |
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author | Klingebiel, Daniela |
author_facet | Klingebiel, Daniela |
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spelling | Klingebiel, Daniela Verfasser aut The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience Klingebiel, Daniela Washington, D.C The World Bank 2000 1 Online-Ressource (58 Seiten)) txt rdacontent c rdamedia cr rdacarrier Asset management companies have been used to address the overhang of bad debt in a country's financial system - by expediting corporate restructuring or rapidly disposing of corporate assets. A study of seven cases suggests that such companies tend to be ineffective at corporate restructuring and are good at disposing of assets only when they're used to meet fairly narrow objectives in the presence of certain factors: an easily liquefiable asset (such as real estate), mostly professional management, political independence, adequate bankruptcy and foreclosure laws, skilled resources, appropriate funding, good information and management systems, and transparent operations and processes. - 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 system's 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. Online-Ausg Asset Management Asset Management Companies Bad Debt Bank Bank Restructuring Banking Banking Crises Banking Distress Banking System Bankruptcy Banks Banks and Banking Reform Currencies and Exchange Rates Debt Markets Debt Restructuring Enterprises Finance and Financial Sector Development Financial Crisis Management and Restructuring Financial Institutions Financial Literacy Governments Impaired Assets Investment and Investment Climate Laws Liquidation Loans Macroeconomics and Economic Growth Public Sector Corruption and Anticorruption Measures Systemic Banking Crises Klingebiel, Daniela Sonstige oth Klingebiel, Daniela The Use of Asset Management Companies in the Resolution of Banking Crises http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2284 Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Klingebiel, Daniela The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience Asset Management Asset Management Companies Bad Debt Bank Bank Restructuring Banking Banking Crises Banking Distress Banking System Bankruptcy Banks Banks and Banking Reform Currencies and Exchange Rates Debt Markets Debt Restructuring Enterprises Finance and Financial Sector Development Financial Crisis Management and Restructuring Financial Institutions Financial Literacy Governments Impaired Assets Investment and Investment Climate Laws Liquidation Loans Macroeconomics and Economic Growth Public Sector Corruption and Anticorruption Measures Systemic Banking Crises |
title | The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience |
title_auth | The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience |
title_exact_search | The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience |
title_exact_search_txtP | 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 Klingebiel, Daniela |
title_fullStr | The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience Klingebiel, Daniela |
title_full_unstemmed | The Use of Asset Management Companies in the Resolution of Banking Crises Cross-Country Experience Klingebiel, Daniela |
title_short | The Use of Asset Management Companies in the Resolution of Banking Crises |
title_sort | the use of asset management companies in the resolution of banking crises cross country experience |
title_sub | Cross-Country Experience |
topic | Asset Management Asset Management Companies Bad Debt Bank Bank Restructuring Banking Banking Crises Banking Distress Banking System Bankruptcy Banks Banks and Banking Reform Currencies and Exchange Rates Debt Markets Debt Restructuring Enterprises Finance and Financial Sector Development Financial Crisis Management and Restructuring Financial Institutions Financial Literacy Governments Impaired Assets Investment and Investment Climate Laws Liquidation Loans Macroeconomics and Economic Growth Public Sector Corruption and Anticorruption Measures Systemic Banking Crises |
topic_facet | Asset Management Asset Management Companies Bad Debt Bank Bank Restructuring Banking Banking Crises Banking Distress Banking System Bankruptcy Banks Banks and Banking Reform Currencies and Exchange Rates Debt Markets Debt Restructuring Enterprises Finance and Financial Sector Development Financial Crisis Management and Restructuring Financial Institutions Financial Literacy Governments Impaired Assets Investment and Investment Climate Laws Liquidation Loans Macroeconomics and Economic Growth Public Sector Corruption and Anticorruption Measures Systemic Banking Crises |
url | http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2284 |
work_keys_str_mv | AT klingebieldaniela theuseofassetmanagementcompaniesintheresolutionofbankingcrisescrosscountryexperience |