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Public asset management companies : a toolkit (English)

This toolkit is designed for policy makers and stakeholders who are considering the establishment of a publicly funded asset management company (AMC). An AMC is a statutory body or corporation, fully or partially owned by the government, usually established in times of financial sector stress, to assume the management of distressed assets and recoup the public cost of resolving the crisis. AMCs were first used in the early 1990s in Sweden (Securum) and the United States (the RTC), and again during the Asian crisis (for instance, Danaharta in Malaysia, KAMCO in the Republic of Korea). The 2008 financial crisis marked a renewal of the use of this tool to support the resolution of financial crises (for instance, NAMA in Ireland, SAREB in Spain). The toolkit does not address broader bank resolution issues. It has a narrow focus on the specific tool of a public AMC established to support bank resolution, and with the objective of providing insight on the design and operational issues surrounding the creation of such AMCs. It seeks to inform policy makers on issues to consider if and when planning to establish a public AMC through: 1) An analysis of recent public AMCs established as a result of the global financial crisis. 2) Detailed case studies in developed and emerging markets over three generations. 3) A toolkit approach with questions and answers, including questions on design and operations that are critical for authorities confronted with the issue of whether to establish an AMC. 4) An emphasis on “how to” that is, a practical versus a principled approach. The toolkit is structured as followed: Part I summarizes the findings on the preconditions, the design, and the operationalization of public AMCs. Part II provides case studies on three generations of AMCs, whose lessons are embedded in Part I. The case studies cover emerging and developed markets, and have been selected based on the lessons they offer.

Details

  • Author

    Cerruti Hailey,Caroline Marie C., Neyens,Ruth

  • Document Date

    2016/05/24

  • Document Type

    Publication

  • Report Number

    105984

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2016/05/27

  • Disclosure Status

    Disclosed

  • Doc Name

    Public asset management companies : a toolkit

  • Keywords

    saving and loan association;bank resolution;financial system;bank regulation and supervision;Legal and Judicial Reform;legal and regulatory framework;Federal Deposit Insurance Corporation;institution need;free flow of capital;asset management companies;asset management company;distressed asset;power of sale;failed bank;impaired asset;nonperforming loan;open bank;public fund;due diligence process;economies of scale;independent third party;direct government intervention;financial system crisis;level of governance;deposit insurance agency;global financial crisis;ownership of state;improvement in governance;sale of property;misuse of fund;corrective action plans;active asset management;real estate price;foreign currency debt;risk management regulations;privileges and immunity;public debt sustainability;real estate market;stable financial system;blanket deposit guarantee;internationally accepted standards;bank resolution process;real estate asset;Rule of Law;private equity fund;lower interest rate;earnings before interest;interest rate swap;fund asset management;certified public accountant;initial public offering;nonperforming asset;Financial Sector;transfer price;legal framework;banking system;political will;asset quality;Debt Enforcement;internal control;operational issues;corporate restructuring;recovery process;capital position;debt restructuring;fiscal cost;viable bank;national account;asian crisis;public assistance;price discovery;bargaining power;Financial Stability;asset purchase;banking sector;liquidity support;sunset clause;commercial focus;direct intervention;public accountability;insolvency reform;sunset date;price gap;insolvent bank;mortgage debt;financial product;legislative framework;large bank;systemic crisis;negative equity;financial instrument;insurance companies;recovery technique;grace period;working capital;statutory bodies;debt obligation;merchant bank;severely limits;bond issue;original work;sole responsibility;corporate loan;individual loan;credit boom;asset resolution;tax legislation;insolvency legislation;restructuring process;primary residences;debt forgiveness;state aid;fiscal space;foreclosure auction;foreign investor;cooperative sector;local market;asset market;maturity extension;foreclosure law;asset securitization;permanent loss;private bank;inflation targeting;global market;transparent methodology;board membership;oversight committee;international expert;legal reform;public reporting;private contractor;recovery effort;eligible loan;majority ownership;adequate safeguard;enhanced transparency;financial supervision;political consensus;asset recovery;valuation date;earning assets;government participation;separate subsidiary;effective operations;equity capital;safeguard mechanism;government guarantee;multiple creditor;asset disposition;negative value;guarantee scheme;holding company;insolvency framework;credit discipline;copyright owner;collateral valuation;traditional investment;workout process;valuation standard;legal ownership;commercial offices;bank recapitalization;institutional framework;connected party;governance environment;banking crisis;Banking Law;external expertise;small bank;bank debt;efficient market;valuation process;financial structure;loan default;judicial proceeding;judicial foreclosure;sale proceeds;legal obligation;mortgage lender;crisis resolution;business venture;operational performance;mandatory participation;measure of use;asset-backed security;Asset backed securities;future price;commercial purpose;restructuring plan;consumer mortgage;rehabilitation plan;credit loss;consumer loan;strategic industry;effective restructuring;asset classification;asset stripping;market failure;public resource;gross debt;high-income household;

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Citation

Cerruti Hailey,Caroline Marie C. Neyens,Ruth

Public asset management companies : a toolkit (English). A World Bank Study Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/293361467996695247/Public-asset-management-companies-a-toolkit