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Article
Publication date: 1 December 2002

Eva H.G. Hüpkes

On 9th July 2002, the Swiss Federal Banking Commission (SFBC) published for consultation a proposal for a new SFBC Money Laundering Regulation. The draft regulation proposes…

4127

Abstract

On 9th July 2002, the Swiss Federal Banking Commission (SFBC) published for consultation a proposal for a new SFBC Money Laundering Regulation. The draft regulation proposes stricter rules for banks and securities dealers to prevent money laundering and financing of terrorism and details specific due diligence requirements with respect to business relationships with politically exposed persons. The draft incorporates the lessons drawn from money laundering cases in Switzerland as well as international developments.

Details

Journal of Financial Regulation and Compliance, vol. 10 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 19 July 2011

Nusret Cetin

The success of banking regulations depends on their effective and efficient enforcement. Therefore, the penalties or sanctions for failures to comply with prudential regulatory…

616

Abstract

Purpose

The success of banking regulations depends on their effective and efficient enforcement. Therefore, the penalties or sanctions for failures to comply with prudential regulatory requirements shall clearly be specified in the law. The aim of this paper is to describe and discuss the enforcement of prudential regulations in Turkish banking law.

Design/methodology/approach

The paper explains the necessity of the prudential standards in banking regulation and their enforcement, and elaborates the Turkish Banking Act to analyze the sanctions provided for the enforcement of prudential requirements.

Findings

The Turkish Banking Act comprises many of the contemporary prudential standards for banks. It also establishes an effective sanctioning regime to ensure the implementation of these standards. The sanctions in the Banking Act can be broadly classified as institutional and personal sanctions. Institutional sanctions consist of three categories: prompt corrective actions, revocation of license and closure, and financial penalties. Personal sanctions, on the other hand, comprise management overhaul and loss of job, temporary prohibition from employment in the banking sector, financial penalties, criminal liability, and civil liability of managers and controlling shareholders.

Originality/value

This paper systematically analyzes enforcement of prudential standards in Turkish banking law, and aims to introduce the Turkish system to international scholars.

Details

Journal of Money Laundering Control, vol. 14 no. 3
Type: Research Article
ISSN: 1368-5201

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Article
Publication date: 24 July 2009

Gillian G.H. Garcia, Rosa M. Lastra and María J. Nieto

The purpose of this paper is to examine the complexities of reorganizing and/or liquidating troubled banks under the European Union's (EU) current institutional framework as it is…

1739

Abstract

Purpose

The purpose of this paper is to examine the complexities of reorganizing and/or liquidating troubled banks under the European Union's (EU) current institutional framework as it is defined by its directives and by national supervisory, remedial, and insolvency practices.

Design/methodology/approach

The paper compares provisions of different EU directives that impact financial institutions and summarizes national remedial practices.

Findings

The paper documents the diversity that currently exists among national supervisory, remedial and failure resolution practices for banks. It also assesses the economic efficiency of the institutional framework for resolving problem banks that is defined by the Reorganization and Winding‐up Directive and identifies components of the directive that can hamper efficient cross‐border resolutions.

Research limitations/implications

There is a deficiency in publicly available information on EU member countries' practices for disciplining and resolving troubled banks.

Practical implications

The paper assesses issues/conditions that can hamper efficient cross‐border resolutions – issues on which policymakers should focus when they reform the current framework. It also explores areas of coordination with other EU directives that deal with financial crisis management that are relevant in the current financial crisis.

Originality/value

The paper makes policy recommendations for reforming the EU's current institutional framework for resolving troubled banks.

Details

Journal of Financial Regulation and Compliance, vol. 17 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 11 May 2015

Eva Ka Yee Kan and Mahmood Bagheri

This paper aims to explain the importance of the international cooperation and coordination among supervisory authorities of different countries in event of banking crises. It…

548

Abstract

Purpose

This paper aims to explain the importance of the international cooperation and coordination among supervisory authorities of different countries in event of banking crises. It also suggests that the harmonious relationship has to be attained in the adoption of ex ante financial regulatory measures and ex post compensation schemes. In other words, the paper highlights the linkage between ex ante preventive regulatory measures and ex post compensation schemes, on the one hand, and cooperation among national regulatory and supervisory authorities in globalized financial markets. Although the paper is relevant to most developed and emerging financial markets, it chooses Hong Kong as a context to examine this proposal. In the current literature, there are no similar approach linking these two paradigms and examining them in an integrated context.

Design/methodology/approach

The paper adopts a conceptual framework after the 2008 global financial crisis and takes Hong Kong, an international financial centre in which numerous branches or subsidiaries of foreign financial institutions locate, as an example to examine how the coordination with foreign supervisory authorities are being conducted and to analyse whether the present regulatory framework in Hong Kong is effective and sufficient against banking crises. Through the review of the literature, the important link between ex ante regulatory measures and ex post compensation schemes is found to be significant in adopting proper solutions.

Findings

Through analysing the Hong Kong financial regulators’ reports on the collapse of Lehman Brother, the paper finds out that even though there is some weakness in the cooperation and coordination between regulators after the 2008 financial crisis, Hong Kong is still in the progress of proposing bank special resolution regime. Although there has been some awareness on the issue of coordination between home and host states regulatory measures, there is still a lack of awareness of the connection between regulatory measures and compensation schemes.

Research limitations/implications

Conflict of interests could hardly be prevented in the course of cooperation and coordination among home and host regulatory authorities, and the coordination of the important link between ex ante regulatory measures and ex post compensation scheme which involves legal and economic analyses is a challenging task.

Practical implications

The paper’s findings show that there are practical implications for the recent rapid development of special resolution regime for global systematically important financial institutions against future banking crises and for managing the balance between the adoption of financial supervisory laws and special resolution measures.

Originality/value

This paper suggests that the harmonious coordination between ex ante regulatory measures and ex post compensation schemes has to be achieved through international context to avoid the absurd situations. This conceptual integrated framework presented in the current paper is not touched upon by the existing literature. This important concept is valuable for future research, and it is significant to financial regulators, legislators and the government in adjusting policy against banking crises in both developed and developing countries.

Details

International Journal of Law and Management, vol. 57 no. 3
Type: Research Article
ISSN: 1754-243X

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