The Library
Credit creation : reconciling legal and regulatory incentives
Tools
Tools
Tools
Castellano, Giuliano G. and Dubovec, Marek (2018) Credit creation : reconciling legal and regulatory incentives. Law and Contemporary Problems, 81 (1). pp. 63-85. ISSN 0023-9186.
|
PDF
WRAP-credit-creation-reconciling-legal-regulatory-incentives-Castellano-2018.pdf - Unspecified Version - Requires a PDF viewer. Download (710Kb) | Preview |
Official URL: https://scholarship.law.duke.edu/lcp/vol81/iss1/4
Abstract
As international organizations adopt new legal standards to promote access to credit through the modernization of national secured transactions law, the lack of coordination with regulatory standards for banking institutions thwarts the effectiveness of these efforts. In recognizing the relevance of the problem, UNCITRAL - for the first time since its establishment - is currently considering how to coordinate secured transactions law reforms with the implementation of the Basel Accord. In a similar vein, the problem is currently approached by other international organisations. Although efforts at the national level to coordinate legal and regulatory standards are commendable, coordination between secured transactions law and capital requirements should be addressed at the highest level of the lawmaking process, i.e. when international soft-laws are defined. To advance this argument, the key functions of secured transactions law and capital requirements are isolated and a holistic understanding of the legal and regulatory rules governing the creation of credit is presented. The Article steers away from the idea that banks are mere intermediaries and offers a fresh understanding of the role of regulatory capital in controlling credit creation, through the management of risk. Within this context, the incentives created by secured transactions law and capital requirements are examined by comparing the capital charges for different credit protections, including credit derivatives and commercial loans to small business. First, it emerges that the implementation of new secured transactions law and the limited ability of security interests in personal property to reduce regulatory capital under the Basel Accords stimulate the creation of credit outside the banking system. Second, to control this phenomenon, the Article shows that it is essential to reconcile the incentive structures created by international legal and regulatory standards.
| Item Type: | Journal Article | ||||||
|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HG Finance | ||||||
| Divisions: | Faculty of Social Sciences > School of Law | ||||||
| Library of Congress Subject Headings (LCSH): | Credit -- Law and legislation, Basle Committee on Banking Supervision | ||||||
| Journal or Publication Title: | Law and Contemporary Problems | ||||||
| Publisher: | Duke University | ||||||
| ISSN: | 0023-9186 | ||||||
| Official Date: | 2018 | ||||||
| Dates: |
|
||||||
| Volume: | 81 | ||||||
| Number: | 1 | ||||||
| Page Range: | pp. 63-85 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||
| Date of first compliant deposit: | 11 November 2017 | ||||||
| Date of first compliant Open Access: | 13 November 2017 | ||||||
| RIOXX Funder/Project Grant: |
|
||||||
| Open Access Version: |
Request changes or add full text files to a record
Repository staff actions (login required)
 |
View Item |
Downloads
Downloads per month over past year
