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A critical evaluation of Central Bank Digital Currencies (CBDCs): payments’ final frontier? Capital Markets Law Journal (IF 0.9) Pub Date : 2024-02-29 Emilios Avgouleas, William Blair
Central Bank Digital Currencies (CBDCs) are the latest advancement in the area of digital money and payments. CBDCs would constitute a claim on the central bank, a central bank liability; CBDCs may be not only for domestic use, as, subject to the connectivity of the chosen type of technology, the digitization of international payments means that some CBDCs may potentially be used on a cross-border
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The DLT sandbox under the Pilot-Regulation Capital Markets Law Journal (IF 0.9) Pub Date : 2022-04-01 Dirk A Zetzsche,Jannik Woxholth
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The principles guiding the ECB’s enforcement and sanctioning powers Capital Markets Law Journal (IF 0.9) Pub Date : 2022-03-21 Andrea Minto
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New York’s requirements for contractual definiteness with application to the formation of investment vehicles Capital Markets Law Journal (IF 0.9) Pub Date : 2022-03-15 Royce de R Barondes
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Policy responses to cross-border central bank digital currencies—assessing the transborder effects of digital yuan Capital Markets Law Journal (IF 0.9) Pub Date : 2022-03-14 Cheng-Yun Tsang,Ping-Kuei Chen
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Fighting insider dealing at all costs?—due process aspects on the EU market abuse regime Capital Markets Law Journal (IF 0.9) Pub Date : 2022-03-10 Helene Andersson
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Sustainability-linked bonds: the next frontier in sovereign financing Capital Markets Law Journal (IF 0.9) Pub Date : 2021-12-20 Giráldez J, Fontana S.
Key points Sustainable finance emerged as a key trend in the debt finance markets in recent years. In 2019 and 2020, debtors were issuing so called ‘green’, ‘social’ and ‘sustainable’ (GSS) bonds in unprecedented amounts, and sovereigns were no exception. 2019 also saw the inaugural issuance of a sustainability-linked or key performance indicator (KPI) bond, and this new instrument became a more and
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From (no) bailouts to bail-in: a comparative assessment of Canada’s bank recapitalization regime Capital Markets Law Journal (IF 0.9) Pub Date : 2021-12-07 Peihani M.
Key points Bail-in within resolution has been at the forefront of the regulatory agenda to end too-big-to-fail. The article examines Canada’s recently introduced bail-in framework through a comparative lens, against the backdrop of the Covid-19 pandemic. It argues that Canada embraces a less stringent approach than its international counterparts in applying the bail-in tool and permitting use of public
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Prefer to defer: has the time for ‘Bendybonds’ finally come? Capital Markets Law Journal (IF 0.9) Pub Date : 2021-11-25 Heller B, Virketis P.
Key points This article notes the deep theoretical justification for state-contingent debt instruments, and the extensive real-world corporate use of contractual terms for limited cashflow deferral (ie ‘PIKs and toggles', ‘hybrids’). It explains why past attempts to use contingent instruments for sovereigns have failed to gain market acceptance, noting issues such as lack of analytical tractability
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Cross-border risks for indenture trustees: the limits of comity and the need to adapt standard provisions of the trust indenture Capital Markets Law Journal (IF 0.9) Pub Date : 2021-11-22 Schaffer E.
Key points Although indenture trustees play a critical role in the administration of public debt, particularly after a default, indentures leave trustees exposed to the risk of conflicting judgments from courts in different countries. The trustees’ experience in the Lehman Brothers flip clause litigation and the Argentina pari passu litigation show that the risk of conflicting international judgments
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Belize’s Green Buyback: A Template for Future Sovereign Debt Restructurings Capital Markets Law Journal (IF 0.9) Pub Date : 2021-10-26 Mitu Gulati
Belize, as of this writing, is undertaking a restructuring of its sovereign bonds. Hard hit by covid and general economic woes, this is that nation’s fifth debt restructuring over the past decade and a half. This time though, Belize is trying to do something different with its restructuring. Something that just might contain lessons for other emerging market nations struggling with covid-related economic
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Investigating the contract production process Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-11 Stephen J Choi, Mitu Gulati, Robert E Scott
Key points Contract law and theory have traditionally paid little attention to the processes by which contracts are made. Instead, contracts among sophisticated parties are assumed to be full articulations of the desires of the parties; whatever the process, the outcome is the same. This article compares debt contracts from US and UK firms, with different production processes, that are trying to do
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Rebuilding trust: regulation of financial advisers in the UK Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-06 Weiping He, Han-Wei Liu
Key points The 2006 UK Retail Distribution Review identified much-needed reforms to the retail investment markets. It suffered chronic problems arising from the provision of conflicted advice by financial advisers to their clients. The global financial crisis (GFC) added intense urgency to the need for reforms. As a result, commission-based charging for financial advisers were banned in 2012, and the
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Accountability in EU sustainable finance: linking the client’s sustainability preferences and the MiFID II suitability obligation Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-06 Félix E Mezzanotte
Key points Doubts remain in EU sustainable finance policy as to the role that the Market in Financial Instruments Directive II (MiFID II) suitability obligation will play in making sure that advisors and portfolio managers adequately service their client’s sustainability preferences. This article tackles this problem by examining the link between ‘sustainability preferences’ and the suitability requirements
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The anatomy of Holding Foreign Companies Accountable Act (HFCAA): a panacea or a double-edge sword? Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-03 Qingxiu Bu
Key points Accurate financial statements are critical to investors in making informed decisions and vital to the overall well-being of the US capital market. For cross-listed and multi-jurisdictional businesses, the current regulatory frameworks fail to create governance equivalency between foreign and US domestic issuers that are listed in the USA. The US Holding Foreign Companies Accountable Act
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Enforcing the market abuse regime in Korea: recent developments and challenges ahead Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-02 Min-woo Kang
Key points Aimed at fighting against securities fraud, a new amendment rule for the enforcement of market abuse regulation has recently been filed by the Korean lawmakers. The gist of the bill is to enable regulators to impose civil or administrative penalties on a party involved in fraudulent behaviours (eg insider dealing, market manipulation, unfair trading) as a more effective means of sanction
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Boilerterms Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-02 John F Coyle
Key points Contract boilerplate generates many benefits for contract users. It also generates costs. In the past, reformers have attempted to mitigate these costs by drafting model contract language and urging contract users to incorporate this language into their agreements. This article argues in support of a different approach. It calls for a replacing of several standard pieces of contract boilerplate
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Nailing the flag to the mast—promises of super-priority in public debt Capital Markets Law Journal (IF 0.9) Pub Date : 2021-08-30 Mihalis Gousgounis, Mitu Gulati, Lee C Buchheit
In days of yore when men fought in sailing ships, a naval captain could only signal his intention to surrender his vessel by ‘striking the colours’—that is, by ordering the ship’s flag to be lowered. In the heat of a naval battle, however, the rope holding a ship’s flag could easily be shot away. The flag would then come fluttering down leading both the crew and the foe to conclude (wrongly) that the
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Overseas on-market buybacks: ASX disclosure requirements and regulation Capital Markets Law Journal (IF 0.9) Pub Date : 2021-09-15 Jason Mitchell
Key points This article considers whether overseas (or foreign) stock exchange buybacks have a similar disclosure to conventional domestic (or local) stock exchange buybacks. The Australian Securities Exchange (ASX) on-market buyback environment is used to evaluate: (a) the different requirements; and (b) the actual disclosure provided, for overseas and domestic buybacks. Required disclosure differs
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Value recovery instruments: a contrarian proposition Capital Markets Law Journal (IF 0.9) Pub Date : 2021-08-01 Mark H Stumpf
Key points Value recovery mechanisms are a subset of sovereign state-contingent debt instruments (SCDIs). Within this category is a further subset: the freestanding value recovery instrument (VRI). This is a restructuring tool that has typically been either geared to a single factor trigger (such as petroleum prices) or a broad macro trigger (GDP). It is constructed in order to trade freely from the
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Make-wholes in sovereign bonds Capital Markets Law Journal (IF 0.9) Pub Date : 2021-07-16 Ugo Panizza, Mitu Gulati
Key points Unnoticed in the literature on sovereign bonds, a number of issuers have begun using ‘doomsday’ or ‘make-whole’ call provisions. These are call options set deep out of the money at issuance. This article documents the birth and evolution of these provisions in the sovereign market. Among the earliest users of the clause were Mexico and Brazil in 2006 and 2007. They were then followed by
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The Markets in Crypto-Assets regulation (MiCA) and the EU digital finance strategy Capital Markets Law Journal (IF 0.9) Pub Date : 2021-07-15 Zetzsche D, Annunziata F, Arner D, et al.
Key points The European Commission published its new Digital Finance Strategy on 24 September 2020. One of the centrepieces of the Strategy is the draft Regulation on Markets in Crypto-Assets (MiCA), designed to provide a comprehensive regulatory framework for digital assets in the EU. With MiCA the EU Commission has proposed bespoke regulation for utility tokens and stablecoins including payments
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Rethinking share repurchases Capital Markets Law Journal (IF 0.9) Pub Date : 2021-07-05 Hans Tjio
Key points Share buybacks have been widely used around the world for some time now. While the financial arguments for and against stock repurchases are still in the balance, there may be legal restrictions with respect to market abuse and capital maintenance, as was once the case in the USA and still is in the UK. A recent Singapore decision suggested that buybacks to counter a short-selling attack
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Why did these standard forms change so quickly? Capital Markets Law Journal (IF 0.9) Pub Date : 2021-06-14 Mitu Gulati
Last August, in one of the most discussed screw ups in the capital markets, Citibank erroneously wired $900 million to a set of lenders to Revlon. Citi was the intermediary here, charged with moving money from one set of accounts to another, and goofed by sending a big chunk of its own money to Revlon’s lenders.
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CACs at work: what next? Lessons from the Argentine and Ecuadorian 2020 debt restructurings Capital Markets Law Journal (IF 0.9) Pub Date : 2021-06-02 de la Cruz A, Lagos I.
Key points This article describes the innovative reading of the ICMA CACs to permit ‘re-designation’ and the sequential use of collective action clauses (ie, the ‘Pac-Man’), that came to light in the Argentine and Ecuadorian 2020 debt restructurings, as well as the adjustments to the contractual clauses introduced by each of these two countries to address concerns expressed by the creditor community
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Editors’ Note Capital Markets Law Journal (IF 0.9) Pub Date : 2021-07-01 Golden J.
Are dedicated international financial tribunals like buses? To paraphrase the familiar saying, you wait ages for one—and then three (or even nine!) come along at roughly the same time.
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The Empire Strikes Back: Derivatives disputes, the financial list, test case scheme and arbitration Capital Markets Law Journal (IF 0.9) Pub Date : 2021-06-24 Malik S.
Key pointsThe proliferation and complexity of derivatives continues to grow. New York and London have built up a body of precedent and judicial expertise. In London, the judicial response is centred around the specialist Financial List and the Test Case Scheme. These have helped ensure the judiciary keeps apace with market developments. However, judges from many jurisdictions grapple with understanding
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The $900 Million Mistake: In re Citibank August 11, 2020 Wire Transfers (SDNY 16 February 2021) Capital Markets Law Journal (IF 0.9) Pub Date : 2021-06-21 Elisabeth de Fontenay
Key points The Citibank case dealt with a $900 million payment sent in error to the lenders of Revlon, Inc, in the midst of a fraught dispute over the loan restructuring. Surprising most market participants, the court ruled that the lenders who refused to return the funds to the administrative agent were entitled to keep the money. (The case is currently on appeal.) The case attracted commentary primarily
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Hidden sovereign finance Capital Markets Law Journal (IF 0.9) Pub Date : 2021-04-05 Lupo-Pasini F.
Key points The term ‘hidden sovereign finance’ refers to sovereign debt transactions in favour of a central government, sub-state entity or state-owned enterprise, whose entire existence or whose terms have not been fully disclosed in violation of local administrative or constitutional requirements. The phenomenon was first reported with regard to the Mozambique hidden loans case, but it likely extends
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Editors’ Note Capital Markets Law Journal (IF 0.9) Pub Date : 2021-01-23
In many ways, this first issue of 2021 has a common theme—the quest for certainty. This chimes well with the current uncertain times and the very uncertain future that we are facing. There will be a great deal of searching for certainty—as to the efficacy of vaccines, how can we save jobs, how can we resolve the vast debts that have been accumulated during the crisis, how we can cope with climate change
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Towards a more robust sovereign debt restructuring architecture: innovations from Ecuador and Argentina Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-25 Ian Clark, Dimitrios Lyratzakis
The Collective Action Clauses published by the International Capital Markets Association in 2014/2015 aim to facilitate orderly and consensual sovereign debt restructurings. The clauses were designed to give sovereigns flexibility in structuring and consummating a transaction that would be capable of attracting broad creditor support, while safeguarding the integrity of the process and the rights of
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Contracts as regulation: the ISDA Master Agreement Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-17 Borowicz M.
Key points There are good legal and economic reasons for courts to enforce regulatory contracts per the plain meaning of their terms as long as that meaning is not inconsistent with the objectives of the applicable regulatory framework. However, when the plain meaning of a regulatory contract is inconsistent with those objectives, courts should instead seek to align the contract’s meaning with those
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Avoiding a lost decade—sovereign debt workouts in the post-Covid era Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-16 Buchheit L, Gulati M.
Key points All sovereign debt restructurings risk undershooting (providing less debt relief than is needed to restore the country to long-term sustainability) or overshooting (extracting more debt relief from creditors than turns out to have actually been necessary). Of these, undershooting will be the greater risk in sovereign debt workouts in the post-Covid era. Bondholders can be expected to prefer
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The influence of the EU prospectus rules on private law Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-13 Busch D.
Key points This article examines the extent to which the civil courts are bound under EU law by the EU prospectus rules when judging issues of liability. The following questions are discussed: (i) May civil courts be more flexible than the EU prospectus rules?; (ii) May civil courts be stricter than the EU prospectus rules?; (iii) How do the EU prospectus rules influence the requirement of relativity
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The development of collateral stripping by distressed borrowers Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-07 Mitchell Mengden
In the past decade, private equity sponsors have taken a more aggressive stance against creditors of their portfolio companies, the most recent iteration of which has come in the form of collateral stripping. Sponsors have been using creative lawyering to transfer valuable collateral out of the reach of creditors. This Article delves deeper into the issue by examining the contract terms and litigation
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The Iraq sovereign debt restructuring Capital Markets Law Journal (IF 0.9) Pub Date : 2020-12-07 Hinrichsen S.
Key points At the time of the US invasion in 2003, Iraq had around 130 billion US dollars in external debt that needed to be restructured. The restructuring was one of the largest in history, yet no clear and detailed historical account exists. Through primary sources and interviews with key actors involved, this article tells the story of how Iraq managed to get a deal done. The restructuring was
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Benchmarks reform: risk-free benchmarks, IBOR fallbacks and the prohibition on compound interest under Italian law Capital Markets Law Journal (IF 0.9) Pub Date : 2020-10-01 G Massimiliano Danusso,Matteo Bencic
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Forest for the trees: are the directors not responsible for disclosures in prospectuses? Capital Markets Law Journal (IF 0.9) Pub Date : 2020-10-01 Chee Keong Low,Tak Hay Low
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Bank–fintech partnerships, outsourcing arrangements and the case for a mentorship regime Capital Markets Law Journal (IF 0.9) Pub Date : 2020-10-01 Luca Enriques,Wolf-Georg Ringe
Fintech firms, once seen as ‘disruptors’ of the traditional banking world, are now increasingly seen as attractive partners for established financial institutions. Such partnership agreements come in different forms and contexts, but most share the goals of outsourcing key banking functions and facilitating market entry for new market players while overcoming relatively tough regulatory hurdles. Yet
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Green bonds: legal and policy issues Capital Markets Law Journal (IF 0.9) Pub Date : 2020-10-01 Lloyd Freeburn,Ian Ramsay
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The subtle relationship between paragraphs 1, 4, 7 and 8 of Article 17 of the Market Abuse Regulation Capital Markets Law Journal (IF 0.9) Pub Date : 2020-10-01 M J Giltjes, A C W Pijls
markdownabstract__Key points__ • Article 17 MAR sets out the legal framework with respect to the disclosure of inside information. Article 17(1) MAR contains the primary duty to disclose inside information and stipulates that the issuer must disclose inside information that directly concerns that issuer. Article 17(4) MAR grants the issuer the possibility to delay the disclosure of inside information
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The Argentine collective action clause controversy Capital Markets Law Journal (IF 0.9) Pub Date : 2020-09-27 Lee C Buchheit,Mitu Gulati
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An examination into the investor protection properties of robo-advisory services in Switzerland Capital Markets Law Journal (IF 0.9) Pub Date : 2020-08-18 Félix E Mezzanotte
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The reform of the ESM and why it is so controversial in Italy Capital Markets Law Journal (IF 0.9) Pub Date : 2020-07-01 Giampaolo Galli
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A vision for regulated digital security infrastructure in Europe Capital Markets Law Journal (IF 0.9) Pub Date : 2020-07-01 Bart Garré,Michael Voisin,Richard Hay,Sophia Le Vesconte
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Restructuring the European Stability Mechanism Capital Markets Law Journal (IF 0.9) Pub Date : 2020-07-01 Aitor Erce
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The value of voluntary COVID-19 securities disclosure—zero? Capital Markets Law Journal (IF 0.9) Pub Date : 2020-07-01 Mitu Gulati
An age-old question in the world of securities disclosure is whether there is value in mandating that issuers disclose key pieces of information about themselves to the investing public or whether these issuers will voluntarily disclose the optimal amount of information as a function of reputational pressures. Many academic articles have been written about this topic, and different regulatory systems
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How to restructure Euro area sovereign debt in the era of Covid-19 Capital Markets Law Journal (IF 0.9) Pub Date : 2020-07-01 Theresa Arnold, Mitu Gulati, Ugo Panizza
Countries with large debts stocks are vulnerable to the vagaries of the markets. Confidence crises can arise out of nowhere, constricting access to the markets. Hence, the question arises as to whether these countries should put in place mechanisms that will help them better prepare for the possibility of crisis. In effect, the choice is whether to buy insurance. The cost of buying such insurance is
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Necessity and the Covid-19 pandemic Capital Markets Law Journal (IF 0.9) Pub Date : 2020-06-12 W Mark C Weidemaier, Mitu Gulati
As the global economic downturn from the coronavirus worsens, many sovereign debtors will have to choose between paying creditors and fighting the virus As of
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Is the European Union going to help us overcome the COVID-19 crisis? Capital Markets Law Journal (IF 0.9) Pub Date : 2020-05-30 Danny Busch
The paper discusses the most noteworthy measures taken or yet to be taken by the EU to combat the coronavirus crisis. Basically, the measures fall into four categories: (i) flexible application of EU rules that could hinder member states in their strenuous efforts to save their national economies; (ii) a financial support package put in place by the EU itself, (iii) monetary action by the ECB and (iv)
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Initial crypto-asset offerings (ICOs), tokenization and corporate governance Capital Markets Law Journal (IF 0.9) Pub Date : 2020-04-01 Stéphane Blemus,Dominique Guégan
This paper discusses the potential impacts of the so-called “initial coin offerings”, and of several developments based on distributed ledger technology (“DLT”), on corporate governance. While many academic papers focus mainly on the legal qualification of DLT and crypto-assets, and most notably in relation to the potential definition of the latter as securities/financial instruments, the authors analyze
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Restructuring Italy’s New York law bonds Capital Markets Law Journal (IF 0.9) Pub Date : 2020-04-01 Andrea E Kropp
It has been begrudgingly presumed that Italy's bonds governed by New York law will remain untouched during an Italian debt restructuring as a result of an expectation that holdout creditors will successfully challenge any such restructuring attempt. However, this presumption was based on the flawed belief, based in a discrepancy between the language contained in the bond prospectus and the underlying
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Reprofiling today for a sustainable tomorrow: a unilateral Italian debt restructuring Capital Markets Law Journal (IF 0.9) Pub Date : 2020-04-01 Emma Cervantes, Victoria Dodev, Shane Ellement, Isabelle Sawhney
Italy should unilaterally extend maturities for its domestic government securities to facilitate an orderly and streamlined restructuring that provides Italy with necessary debt relief. Italy’s domestic government securities are issued as decrees under a 2003 Consolidated Act (the “Act”). Article 3 of the Act explicitly grants Italy the power to unilaterally extend maturities for all domestic government
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Barbados sovereign debt restructuring 2018–2019—like the island, small but perfectly formed Capital Markets Law Journal (IF 0.9) Pub Date : 2020-04-01 Andrew Shutter
The Caribbean is no stranger to sovereign debt restructurings. It is hard to imagine another region of the world with a higher ratio of GDRs per capita. In only the last ten years (a blink of an eye in sovereign debt years), each of Antigua and Barbuda, Belize, Grenada and St Kitts and Nevis have undergone debt restructurings and Jamaica has done so twice. So what is newsworthy about the debt restructuring
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The reform of the European Stability Mechanism Capital Markets Law Journal (IF 0.9) Pub Date : 2020-04-01 Jasper Aerts, Pedro Bizarro
This article seeks to explain the main aspects of the reform of the European Stability Mechanism, as agreed in principle by the leaders of the euro area member states. The article focuses particularly on the ESM’s new mandate to act as the common backstop to the Single Resolution Fund, the reform of its precautionary lending instrument, the expansion of its role in country monitoring both in and outside
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Inefficiencies in trade reporting for over-the-counter derivatives: Is blockchain the solution? Capital Markets Law Journal (IF 0.9) Pub Date : 2019-12-17 Olatunji Jayeola
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In CCP we trust … or do we? Assessing the regulation of central clearing counterparties in Europe Capital Markets Law Journal (IF 0.9) Pub Date : 2019-12-16 Hossein Nabilou, Ioannis G Asimakopoulos
As part of financial market infrastructures, central counterparties (CCPs) have long been deemed systemically important and are likely to gain in importance due to the regulatory developments mandating central clearing for an increasing number of financial products. This paper focuses on the regulation as well as the recovery and resolution of CCPs in Europe. The existing CCP regulatory framework consists
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Blockchain and cryptocurrencies: essential tools in a two-tier financial system Capital Markets Law Journal (IF 0.9) Pub Date : 2019-12-11 Ilias Kapsis
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Choice of governing law for bonds Capital Markets Law Journal (IF 0.9) Pub Date : 2019-11-20 Philip Wood
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Using the local law advantage in today’s eurozone (with some references to the Republic of Arcadia and the Mamatas judgment) Capital Markets Law Journal (IF 0.9) Pub Date : 2019-09-17 Yannis Manuelides