Investment Banking - Exit Strategy or a Living Will Dissertation

Investment Banking - Exit Strategy or a Living Will - Dissertation Example Financial and banking institutions play a fundamental role in determining economic growth and development globally. Given their importance to the public and other arms of the government, financial institutions are strongly regulated and controlled. The central government through its legal bodies establishes sound financial legislations aimed at monitoring, controlling, and regulating financial institutions and the banking sector. Financial experts following the Asian global meltdown of 1997 later criticized the Asian miracle that was embraced for its success in Asian. This financial crisis spilt over to other parts of the world leading to global financial failures. In less than a decade after such financial disaster, the world experience one of the worst financial crises whose magnitude is estimated to that of the great depression of the 1930s. This research paper seeks to discuss the chronological events of the Asian and global financial crisis, bankruptcy legislations, the moral ha zard, insolvency, resolutions, and institutional frameworks designed by the legal team to restore sanity in the global financial sector. In addition, this paper evaluates the exit strategy adopted by the investment financial institutions. ... conomic prospects of creditors in a debt bound firm 18 2.5 Case law and obligations owed to creditors 19 CHAPTER THREE 21 3.0 Corporate laws and economics 22 3.1 Regulatory styles 27 3.2 Moral hazards and great failures 27 CHAPTER FOUR 4.0 The TURNER/ VICKERS PROPOSAL 30 4.1 Policy objectives 30 4.2 Defaults of the report 31 4.3 Legal and economic thoughts 33 4.4 The cost of ring-fencing 34 4.5.0. Defects of ICB report on corporate and retail banking 39 4.5.1. Competition in retail banking 39 4.6.0. Non-ring fenced residuals 40 4.6.1. Banking outside the EEA 40 4.6.2. The concept of separation 42 4.6.3. Cost of investment banking in the UK 43 4.7 The rationale of the dimensions in banking 44 4.8 Alternative approach to banking 45 CHAPTER FIVE 5.0. Analysis and discussions 45 5.1.0. THE LIVING WILL IN INVESTMENT BANKING 46 5.1.1. Concepts and descriptions 46 5.1.2. The Funeral plan of the US 46 5.2 Effects of the living will 48 5.3 The mild and strong variants 49 5.4 The EU framework for crisis management in the financial sector 53 5.5 Economic performance in Europe 54 CHAPTER SIX 6.0 CONCLUSION AND RECCOMENDATION 56 BIBLIOGRAPPHY 58 APPENDIX AND CASE TABLES 69 CHAPTER 1 1.0. Introduction Banking systems are shaped by financial stability arrangements. As the European Union ponders reforms towards its financial arrangements, it is in the course of determining which type of financial system it will have in the future. The financial crisis has brought the long-building tension between progressively more transitional financial institutions and national financial stability arrangements to a breaking point. The European Union now needs to select how to eliminate that tension that will eventually shape its economic and financial future. 1.1. The Crisis The European financial