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Legal and Conduct Risk in the Financial Markets, 3rd Edition by McCormick, Roger; Stears, Chris (22nd March 2018)

Index

From: Legal and Conduct Risk in the Financial Markets (3rd Edition)

Roger McCormick, Chris Stears

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(p. 646) Index

(p. 647) Abbey National 24.6224.64
accidents 25.17
accountability see individual accountability
accounting treatment 8.91
see also Turner Review
ACLA/CLANZ Handbook 30.1730.18, 30.33
acquisitions 26.2926.32
adequacy see capital: adequacy
advance purchase transactions 28.03
allocation of responsibility 23.0923.10
see also legal risk
Andersen Amicus Briefs 30.04, 30.08, 30.40
anti-deprivation rule 8.66, 8.69, 8.84
apartheid 5.03
appropriate consent 27.04
appropriateness test 30.23
Approved Persons Regime (APR) 15.05, 15.10
Arch Cru funds 16.27
asset backed securities (ABSs) 24.34
attestations 15.13, 15.38
austerity programmes 11.09
authorised disclosure 27.04
authorities 7.18
‘bad’ banks 8.07, 8.25
‘bad’ law 24.40
back office functions see outsourcing
bail-in 14.14
bail-outs 6.16, 6.18, 17.34
balance sheet dressing 24.15
balance sheet tax 13.06
bancassurance 24.32
bank
definition of 1.03
Bank of Credit and Commerce International (BCCI) 2.05, 7.117.12, 12.1712.19, 20.29, 22.4622.48
bank insolvency and administration 8.438.62
bank administration order 8.50
bank insolvency order 8.468.49
bank insolvency procedures 7.18
investment bank insolvency 8.518.62
overview 8.438.45
Bank for International Settlements (BIS) 22.10, 24.17
bank secrecy 17.12, 17.31
Bank Special Administration Regulations 2011 14.14
Banking Code 24.66
banking levies 13.06
Banking Liaison Panel 8.41
banking profession 12.1612.19
Banking Act 2009 8.07, 8.118.62
Banking (Special Provisions) Act 2008 8.07, 8.118.62
Banking Liaison Panel 8.228.23
Banking Standards Board (BSB) 3.02, 10.04, 11.53, 12.0212.07, 12.1712.19, 14.11, 15.26, 17.01
Banking Standards Review (Lambert Review) 12.0212.05, 12.19
Banking Standards Review Council (the ‘BSRC Report’) 32.0632.07
Banking Structural Reform (BSR Regulation) 7.26
bankruptcy 22.5122.54
Barclays 11.28, 11.30
Barings Brothers 2.05, 17.03
Basel I 5.20
Basel II 6.20, 7.16, 9.149.15
capital rules 2.07, 2.10
Basel III 2.07, 5.20, 14.04, 17.25
Basel Accord of 1988 2.07
(p. 648) Basel Committee on Banking Supervision (BCBS)
board of directors Appendix 5
responsibilities for compliance Appendix 5
business resiliency and continuity Appendix 5
compliance function principles Appendix 5
control and mitigation Appendix 5
cross-border issues Appendix 5
definition of compliance 30.05
fundamental principles of operational risk management Appendix 5
governance Appendix 5
independence Appendix 5
internal audit, relations with Appendix 5
monitoring and reporting Appendix 5
outsourcing Appendix 5
principles 29.16, 29.35, 29.50
Report (2004) 2.07
resources Appendix 5
response to the Financial Crisis of 2007–2009 9.149.20
risk identification and assessment Appendix 5
risk management environment Appendix 5
risk management principles for electronic banking Appendix 5
role of disclosure Appendix 5
senior management Appendix 5
responsibilities for compliance Appendix 5
behavioural standards 12.1012.11
benchmarking 10.08, 12.1212.14, 29.46, 32.21
Big Bang 20.21, 20.23, 20.2520.26
blocked accounts 28.25
Bloxham Review 8.57, 8.62
bonus culture 8.93, 13.06
book-entry holdings 26.05
boom and bust lending 17.27
breach of statutory duty 16.16
Brexit 3.01, 4.02, 4.13, 7.25, 19.0119.05, 33.11
risk issues 19.05
bridge banks 7.18, 8.14, 8.50
British Bankers Association (BBA) 10.05, 10.08, 14.08
British Eagle Case 22.5922.73, 24.48
British Gas 17.17, 20.22
British National Oil Corporation 28.0328.04
Brundtland Commission of the United Nations 11.06
building societies 7.22, 8.14, 20.26
business culture 11.53
business day provisions 29.63
business ethics 11.05
Business Information Packs (BIPs) 8.61
Business Principles 24.64
but-for test 25.18
C&I (Commerce & Industry) Group 30.0930.11
Paper 29.61
capital 8.91
adequacy 2.02
market activity 20.18, 20.27
market arrangements 8.28
risk and 2.012.10
see also Turner Review
Capital Requirements Directive 6.19
capitalism 8.04, 17.28, 17.32, 20.24
caps on liability 29.62
case-study based standards 32.1232.18
FICC markets and beyond 32.1732.18
value of 32.1232.16
casino capitalism 6.04, 17.32
causation 25.0125.18
case law and common sense 25.1025.18
context 25.01
risks and causation chains 25.0225.09
Cause Codes 10.45
caveat emptor concept 17.12
CDO (Collateralized Debt Obligation) 6.10, 6.19, 24.26, 24.34
central counter party (CCP) 22.63
central securities depositary (CSD) 22.63, 26.04
Certification Regime (CR) 14.15, 15.0415.06, 15.2015.26, 29.0629.07, 33.08
Conduct Rules 15.2715.33
early observations 15.3415.39
changes in circumstances 29.62
‘charge-backs’ 21.0121.05, 22.57
charged securities 8.57
Chief Risk Officer (CRO) 8.97
choice of law 29.62
citizenship reports 11.2411.35
City of London Law Society 22.23, 24.53
class action suits 17.27
clearing 8.91
clearing houses/ clearance procedures 22.6022.70
see also Turner Review
Client Asset Agency (CAA) 8.61
client asset protection 8.56
Client Asset Trustee (CAT) 8.61
client money 8.59, 8.63
close-out netting provision
definition 22.37, 22.5522.58
Clustered Criminality 10.49
co-financings 17.04
‘Collateral’ 8.68
Collevecchio Declaration 11.43
(p. 649) Combined Code of Corporate Governance 1.07, 24.57
commercial banking, ‘classic’ 8.91
see also Turner Review
Committee of European Bank Supervisors (CEBS) 9.20
communism 17.27
Companies Act 2006 2.05
compensation 8.298.37
culture 17.28, 24.60, 24.69
principles for sound practice 9.189.19
scheme order 8.29
complaints procedures 29.38
compliance function principles 30.0530.07
Basel Committee on Banking Supervision Appendix 5
compliance risk
definition Appendix 7
conceptual impossibility 21.0121.13, 22.57
‘charge-backs’ 21.0121.05
legal logic 21.0121.05
loose ends 21.0821.13
pressure from other jurisdictions 21.0621.07
Conduct Costs Project 8.08, 10.2810.49, 11.52, 12.13, 24.44, 31.20, 33.12
Conduct Costs Report (2017) 10.36
see also Libor Scandal
Conduct Crisis 10.2310.27
see also Libor Scandal
conduct metrics 31.1331.22
see also metrics
conduct risk 23.2323.27
definition 10.25
reputation management 31.0131.22
see also legal risk
conduct rules 14.15
Certification Regime (CR) 15.2715.33
Senior Managers Regime (SMR) 15.2715.33
conflicts of interest 29.12, 29.61
CONRED (consumer redress scheme sourcebook) 16.27
consequential loss 29.62
consumer protection 5.165.17, 24.68
Consumer Protection and Markets Authority 13.06
contingent claims 22.54
Contracts Working Group of the Bank of England’s Task Force 29.6329.64
contractual estoppel principle 16.1916.21
control and mitigation
Basel Committee on Banking Supervision Appendix 5
risk management 29.5629.65
convergence of agendas 33.0133.12
Corporate Conduct/Behavioural Failure 10.49
corporate governance 8.95, 11.05, 17.30, 29.12
Corporate Integrity-Related Regulatory Breach 10.49
corporate misbehaviour 23.14
corporate wrongdoing 7.27
see also legal risk
Corporate Reputational Event 10.49
corporate sustainability reporting (SR) 11.23, 11.26
Cost Codes 10.46
cost-benefit analysis 16.25
‘creative accounting’ 24.15
credit crunch 2.01, 6.04, 8.93
credit default swaps 6.13, 24.26
credit derivatives 24.27
credit enhancing ‘wraps’ 6.13
Credit Rating Agencies (CRAs) 6.136.14, 9.11
financial crisis 2007–2009 6.246.30
Turner Review 8.91
Credit Risk Transfer 24.29
credit unions 8.14
CRESTCo 26.09
crime 27.02
criminal activity 14.11, 24.42, 27.05
corporate 15.4615.47
criminal offences
financial crisis of 2007–2009 16.0316.10
individual accountability 15.4015.49
criminal property 27.05, 27.0727.08, 27.1627.18
cross-border risk
Basel Committee on Banking Supervision Appendix 5
cross-border business 24.3724.39
Guernsey Financial Services Commission Appendix 8
cross-border transactions 17.03, 29.33, 30.26
cross-pollination meetings 24.72, 32.20
cross-selling 24.33
Crown preference 28.20
Culpability Codes 10.4710.49
custodians 24.30, 26.04
customer service 11.29
data management 30.3830.43
data room 29.62
de Larosière Report 6.04, 6.20, 6.23, 6.26, 6.28, 9.019.10
de minimis threshold 27.05, 29.62
debt management 20.13, 20.15
debt restructuring 17.27
(p. 650) default arrangements, definition 22.73
defective documentation 25.06
see also causation
dematerialization of securities 26.07
depositaries 24.30
deregulation 24.32
derivative transactions 5.18
derivatives ‘squared’ 6.13
derivatives trading
central counterparties in 8.91
Derivatives Traders 10.09
see also Turner Review
derivatives transactions 30.22
direct agreements 24.25
direct product regulation 2.08, 8.91
see also Turner Review
discipline 12.15
disclaimers of liability 29.62
disclosure letters 29.62
disposals 26.2926.32
document retention policy 29.61
documentation 29.59
double dip financial leases 24.25
Dow Jones Sustainability Index (DJSI) 11.3211.33
‘due’, definition of 22.41, 22.54
due diligence reports 29.62, 30.36, 30.44
duff loans 7.01
duty of care 16.30
Earth Summit (1992) 11.18
Economic and Monetary Union (EMU) 9.10
electronic banking
risk management principles Appendix 5
electronic trading systems 26.04
emergency appointments 15.24
end investors 26.04
entrepreneurship 2.01
environmental and social issues 11.3611.53, 16.04, 24.59
Environmental Social Governance (ESG) performance 11.22, 11.24, 11.30
Environmental and Social Management Plan (ESMP) 11.40
Equator Principles 11.3711.43, 11.4711.48, 17.25
Equitable Life Assurance Society 5.18
equity 28.19
Equivalent, concept of 22.30
equivalent financial collateral
definition 22.29
ethics and standards 8.99, 10.2910.30, 12.0112.29, 17.04, 24.58, 29.52, 30.02, 30.18
banking as a profession 12.1612.19
Banking Standards Board 12.0212.07
behaviour and professional standards 12.1012.11
benchmarking 12.1212.14
context 12.01
discipline 12.15
ethical banks 11.13
‘ethical drift’ 11.02
ethics 12.0812.09
FICC Markets Standards Board 12.2012.24
‘grey areas’ 32.21
standards, ethics, and culture, relationship between 12.2512.29
training 12.09
Euromoney global political risk map 29.47
European Bank for Reconstruction and Development (EBRD) 17.04, 18.03, 18.05, 24.71
legal indicator survey 29.45
Legal Transition Programme 18.0918.18
Model Law on Secured Transactions 18.12
European Banking Authority (EBA) 9.06, 31.1631.19
definition of conduct risk 10.25
European Economic Area (EEA) 7.25
EURIBOR rates 10.09
European Insurance and Occupational Pensions Authority (EIOPA) 9.06
European Market Abuse Regulations 14.08
European Securities Authority 9.069.07
European Securities and Markets Authority (ESMA) 9.07
market abuse 27.28
European Single Market 20.29
European Supervisory Authorities 9.069.08
European System of Financial Supervision (ESFS) 9.08
European Systemic Risk Board (ESRB) 9.08
European Union (EU)
EU 27 19.02
EU Financial Services Action Plan 17.25
response to the financial crisis 9.019.20
eurozone 11.07
government bond trades 23.22
Event of Default 8.84
exchange controls 20.26
exchange rates 22.58
execution only contracts 16.17
exploiting the letter of the law 24.1224.15
Fair and Effective Markets Review (FEMR) Final Report 3.02, 12.2612.27, 15.05, 31.13, 32.0332.06, 32.1032.11, 32.14, 32.17
(p. 651) Fed window 7.25
FICC Markets Standards Board 3.02, 11.53, 12.1912.24, 17.01, 32.05
‘grey areas’ 32.1732.18
financial collateral arrangements 22.58, 26.05
Financial Conduct Authority (FCA) 3.02, 3.10, 8.07, 13.06
Annual Conduct Meetings (ACM) 29.15, 31.0631.08, 31.12
business activities and functions 15.09
Code of Market Conduct 27.3127.41
core principles for regulated businesses 29.0329.05
Final Notices 33.0433.05
fines 10.40, 33.12
FIT Manual 15.10, 15.23
netting agreements 30.2630.27
role 33.09
financial covenants 28.04
Financial Crisis of 2007–2009 6.019.20
European Union and international response 9.019.20
Basel Committee on Banking Supervision 9.149.20
de Larosière Report 9.019.10
Financial Stability Board 9.149.20
G20 response 9.11–9.13
general legal and conduct risk implications 16.0116.31
bank mis-selling cases 16.1516.21
general 16.0116.02
government influence over banks 16.1116.14
litigation and criminal charges 16.0316.10
post-crises redress schemes and legal risk 16.2216.31
post-financial crisis regulatory environment 16.1116.14
initial impact on financial markets 7.017.28
Inter-bank market, seize-up of 7.017.06
Northern Rock and liquidity issues 7.077.10
US financial market problems 7.237.28
market and regulatory failure 6.016.30
casinos and utilities 6.016.05
Credit Rating Agencies (CRAs) 6.246.30
‘originate and distribute’ 6.196.23
origins of the crisis 6.066.18
United Kingdom 8.018.99
bank insolvency and administration 8.438.62
Banking (Special Provisions) Act 2008 8.118.62
Banking Act 2009 8.118.62
financial institution failure and rescues 7.22
FSA, initial response of 8.91
Landsbanki ‘Freezing Order’ 8.898.90
legal and regulatory responses, overview of 8.018.10
Lehmans UK litigation 8.638.88
‘regulatory failure’ and proposed changes 7.117.21
Special Resolution Regime, stabilization options under 8.138.42
Turner Review 8.91
Walker Review 8.928.99
financial deregulation 20.26
financial innovation 24.2424.31
financial institutions (FIs)
failure and rescues 7.22
materials Appendix 7
principles and commitments 11.4311.45
financial law 24.43
Financial Law Panel (FLP) 1.061.07, 3.02, 33.11
First Guidance Notice 22.1722.24
Guidance Notice and Statement of Law 22.1522.24
guidance notices 24.53
Financial Markets Law Committee (FMLC) 1.07, 3.02, 3.05, 23.17, 24.53, 26.02, 33.1033.11
function and purpose Appendix 1
property interests in directly held investment securities 26.3526.37
Financial Ombudsman Service 24.65, 24.69
Financial Policy Committee (FPC) 13.06, 13.09
Financial Risk Outlook 5.10
Financial Services Act 2012 13.0113.23
consultation phase 13.0713.14
context 13.0113.04
Financial Services Act 2012 13.1513.23
‘new’ approach to financial regulation 13.0713.14
prescription for better financial regulation 13.0513.06
Financial Services Action Plan 3.05
Financial Services Authority (FSA)
Client Asset Sourcebook (CASS 7) 8.758.82
Code of Market Conduct 24.57
factsheet 24.6024.63
market abuse 27.40
Northern Rock 7.11, 7.147.16
Principles for Business 10.09
response to the financial crisis 8.91
‘Treat Customers Fairly’ initiative (TCF) 24.68
Financial Services (Banking Reform) Act 2013 6.04, 7.25
Financial Services Compensation Scheme 14.14
Financial Services and Markets Tribunal 5.03
Financial Stability Board (FSB) 11.21
response to the financial crisis 9.149.20
(p. 652) Financial Stability Forum 6.20
firm conduct risk metrics 31.0631.12
see also metrics
fixed charges 22.58
floating charges vs 28.1928.21
flip provision 8.69
floating charges 22.58, 24.70
definition 28.2228.25
fixed charges vs 28.1928.21
FMSB standards 3.02
force majeure clauses 19.04, 29.6229.63
see also Brexit
forward sales 28.03
fraud 11.08, 16.07
fraudulent misrepresentation 16.16
free market ideology 17.01
freezing orders 30.31
FTSE 4Good 11.32
future property 24.24
G8 (Group of 8) 17.31
G20 (Group of 20) 4.04–4.05, 4.08, 6.14, 13.03, 14.04, 17.01
response to the financial crisis 9.119.13
gaming behaviour 12.21
General Agreement on Trade in Services (GATS) 4.13
Geneva Securities Convention see UNIDROIT
gilt-edged stock 22.30
Giovannini Legal Certainty Group 26.1126.12, 26.16, 26.34
Glass Steagall, return to 7.25, 7.277.28, 8.91
global context 4.014.14
global financial markets 3.10, 4.12, 17.0117.34
banks in a global market 17.0117.06
globalization debate and context 17.0717.11
legal certainty, need for 17.3217.34
limits of global law 17.2517.26
media influence 17.1717.24
reactions to globalization 17.2717.31
social and political background 17.1217.16
sources of legal risk 24.7024.73
Global Master Securities Lending Agreement 22.30
Global Reporting Initiative (GRI) 11.24, 11.31
Global Reporting Initiative Index 12.14
globalization see global financial markets
good faith 26.34
government influence
over banks 16.1116.14
grace periods 29.63
Greece, sovereign default 17.03
green groups 16.04
green investment banks (GIBs) 11.13
‘grey areas’ 32.0132.23
case-study based standards 32.1232.18
FICC markets and beyond 32.1732.18
value of 32.1232.16
context 32.0332.08
definition of 32.02
general discussion issues 32.2132.23
benchmarking 32.21
ethics 32.21
general 32.21
incentives 32.21
legacy and change 32.21
metrics 32.21
professionalization of banking 32.21
practicalities 32.1932.20
benefits 32.19
cross-pollination meetings 32.20
grey area standards 32.20
human resource commitment 32.20
objectives 32.19
preliminary phase 32.20
roundtable discussion meetings 32.20
suggested programme 32.2032.20
preliminary issues 32.0132.02
risks presented by 32.12
‘scenario analysis’ and agreement on standards 32.1332.16
‘standard’, definition of 32.09
standards and 32.1032.11
group credit risks Appendix 8
Guernsey Financial Services Commission 29.11
basic documentation issues Appendix 8
cross-border risk Appendix 8
group credit risks, relations with Appendix 8
IBA working party on legal risk Appendix 8
independence Appendix 8
legal risk guidance note for banks Appendix 8
mis-selling risk Appendix 8
organisational issues Appendix 8
Halifax Bank of Scotland (HBOS) 7.22
hard law 24.5124.59, 27.36
see also soft law
harmonization 11.01
Hazell v Hammersmith and Fulham London Borough Council 3.03, 20.0120.30, 22.01, 22.17, 24.05
background facts 20.1720.19
legal debacle 20.0120.12
market shock 20.0120.12
(p. 653) points of law 20.1320.16
wider context of the case 20.2020.30
hedge funds 7.02, 8.91, 16.03
see also Turner Review
Henry VIII clause 8.38
hindsight principle 22.51
HM Revenue & Customs 15.48
human capital management 11.05
Human Resources Group Conference 24.20
Icelandic banks 4.06, 4.12, 8.89
implementation failure and misconduct 24.0924.11
Imputed Breach 10.49
inaccessible law 24.4724.48
incentives see ‘grey areas’
incorrect transaction description risk 28.07
Independent Commission on Banking (ICB) 13.1313.14, 14.0214.06
individual accountability 15.0115.54
Certification Regime (CR) 15.0415.06, 15.2015.26
Conduct Rules 15.2715.33
early observations 15.3415.39
context 15.0115.03
criminal offences 15.4015.49
duty of responsibility 15.1615.17, 15.37
globalization 17.30
overall responsibility 15.36
Prescribed Responsibilities 15.09, 15.11, 15.39
presumption of responsibility 15.16
reckless mismanagement and facilitation 15.4015.49
Senior Managers Regime (SMR) 15.0415.19
Conduct Rules 15.2715.33
early observations 15.3415.39
whistleblowing 15.5015.54
Individual Criminality 10.49
Individual Reputational Event 10.49
Initial Public Offering (IPO) 11.33
innovation 6.17
insider dealing 17.27, 27.30, 27.37
insolvency and administration see bank insolvency and administration
insolvency risk 17.28
Insolvency (Amendment) Rules 2005, Rule 4.90 Appendix 3
Insolvency Rules 1986, Rule 4.90 Appendix 3
intangibles 1.01
integrated reporting 11.28
Inter-bank market
seize-up of 7.017.06
Interagency Statement on Sound Practice Concerning Complex Structural Finance Activities 29.18, 29.51, 29.54
interest rate hedging products (IRHP) 16.2916.30
intermediaries 24.30
definition 26.06
intermediate events 25.02
see also causation
intermediated securities
definition 26.23, 26.27
internal capital adequacy assessment process (ICAAP) 31.19
International Air Transport Association (IATA) 22.6422.66
international bankruptcy law 17.27
International Bar Association (IBA) 23.18, 23.2023.22, 29.35, Appendix 8
definition of ‘legal risk’
international central securities depositary (ICSD) 22.63
International Financial Organizations (IFOs) 11.36
international institutions 18.0118.18
EBRD and ‘law in transition’ 18.0918.18
impetus for financial law reform 18.0118.02
principal reform bodies 18.0118.02
UNCITRAL 18.0418.08
UNIDROIT 18.0418.08
International Securities Lending Association 22.27
International Swaps and Derivatives Association (ISDA) 6.09, 18.03
forms 8.84
investment bank insolvency 8.518.62
investment banking 20.21
investment bank, definition 8.52
special insolvency regime 8.548.57
investment business 20.20
Investment Management Association 8.55
investor rights 26.2126.28
judicial reasoning
unpredictability of 24.4924.50
justice, definition 17.08
labelling 28.0628.09
laissez-faire market capitalism 17.32
(p. 654) Lambert Report 31.14
language, ‘legalistic’ 22.36, 22.50
Landsbanki ‘Freezing Order’ 8.898.90
Law Commission 4.01
lawmakers 5.015.20
lawyers
charters/ handbooks for in-house counsel 30.1730.18, 30.33, 30.42
‘constitution’ for 30.20
discretionary areas 30.2130.22
document retention 30.3830.43
duty of care 30.50
ethical foundations 30.18
Interagency Statement 30.43
need for clear methodology 30.0130.04
opinions and documents 30.2530.37
responsibility 30.0130.50
role of 30.0530.24
clarity 30.4430.50
role of legal department 30.0530.24
legacy and change see ‘grey areas’
Legal & General 5.03
legal advisers 33.02
legal awareness 24.0524.08
Legal Certainty Group 4.02, 26.16
legal engineering 30.15
legal logic 21.0121.05
legal risk
categories of 2.03
causation and 25.09
challenges and drivers for change Appendix 7
definition 23.0123.27
allocation of responsibility 23.0923.10
background and context 23.0123.07
‘compliance risk’ vs Appendix 7
conduct risk 23.2323.27
corporate misbehaviour, responsibility for 23.14
effective risk management 23.0923.10
flexibility, need for 23.1723.19
IBA working party on legal risk Appendix 8
impact on policy 23.1123.13
International Bar Association’s Definition 2.03, 23.2023.22
‘norm,’ advantages of a 23.1523.16
requirement for a 23.0823.19
Rogue Trader 23.2323.27
documentation by financial institutions Appendix 7
events 25.02 see also causation
guidance note for banks Appendix 8
importance and history of 1.011.11
‘is particularly likely to be high’ 5.09
London Market 3.013.10
management see risk management
parameters 5.20
risk indicators 29.53
risk mitigators 29.63
risk situation 33.05
risk society 23.05
sources of 24.0124.73
behaviour of financial institutions 24.0424.23
interaction of law and finance 24.5124.73
nature of the financial markets 24.2424.39
problems within the law 24.4024.50
Legal Risk Review Committee (LLRC) 1.051.08, 3.02, 20.06, 22.15, 23.02
Lehmans administration 1.03, 1.10, 4.024.03, 4.12, 6.13, 6.16, 7.227.23, 8.058.06, 8.51, 8.55, 8.58, 8.61, 16.01
interview with administrators Appendix 2
UK litigation 8.638.88
lender of last resort (LOLR) 8.298.31, 13.06
Lender’s Dilemma 28.2628.27
Libor Scandal 1.09, 8.02, 11.11, 11.32, 11.35, 15.04
Conduct Costs Project 10.2810.49
Conduct Crisis 10.2310.27
context 10.0110.03, 10.5010.53
impact of 10.0110.53
Libor Scandal 10.0410.22
PCBS 14.0914.11
Wheatley Review of LIBOR 14.0714.08
limited liability 17.28
liquidity 7.04, 7.06
Northern Rock 7.077.10
support 7.22, 7.25
Turner Review 8.91
Lloyd’s Market Association 23.2423.26
Lloyds Banking Group 16.12
London Investment Bankers Association 8.65
London Market 3.013.10, 20.18, 20.2120.23
see also legal risk
London Metal Exchange 33.11
London School of Economics (LSE) 10.29
Joint Colloquia Proceedings Appendix 7
Law and Financial Markets Project 15.43
London Stock Exchange 20.21, 22.27, 29.09
loss 25.02
definitional causes of 25.02, 25.07
trigger events 25.02, 25.06, 29.20
see also causation
low-balling 10.05
LTRO (long term refinancing operation) 11.10
(p. 655) Management Responsibilities Map (MRM) 15.1115.12, 15.1415.15, 15.17, 15.34, 15.3715.38
mandatory principle 22.5122.52
manipulating transactions 27.30
market abuse 27.2627.41
see also vague laws
market contracts 8.28
market convention override provisions 29.63
Master of the Rolls 8.67
material adverse change (MAC) 29.62
clauses 19.04
see also Brexit
maturity transformation 2.01, 18.12
metrics 32.21
conduct metrics 31.1331.22
conduct risk and reputation management 31.0131.22
Conduct Risk Questions 31.06
context 31.0131.05
culture 31.1331.22
dashboards 31.10
firm conduct risk metrics 31.0631.12
support 31.10
trust 31.1331.22
Millennium Development Goals (MDGs) 11.17
mis-selling 5.04, 5.16, 16.1616.19, 16.2216.28, 23.26, 24.62, 29.34
risk 16.1516.21, Appendix 8
misleading information 27.30
mismanagement 15.4015.49
‘misplaced philanthropy’ 20.19
mitigation tools see control and mitigation
money
laundering, definition 27.16 see also Proceeds of Crime Act 2002
methods of raising 28.0128.05
monoline insurers 6.13, 7.23
morality 22.04
mortgages 7.227.23, 20.26, 22.46, 28.1228.13
endowment 24.62
multilateral netting 22.5922.73
see also netting
mutual credit
Rule 4.90 Appendix 3
‘naked collateral’ 22.50
‘narrow banking’ 8.91
see also Turner Review
National Association of Criminal Defense Lawyers 30.04
National Criminal Intelligence Service (NCIS) 27.13, 27.20, 27.22, 27.40
nationalization of banks 8.15, 8.36
negative pledge 24.09
negligence 15.43
netting 21.03, 30.2630.27
arrangements, definition 8.258.26
multilateral 22.5922.73
settling differences 22.0122.03
Turner Review 8.91
New Issue Process for Fixed Income Markets 12.22
new market sectors 24.3224.36
NGOs (non-governmental organisations) 11.1411.15, 11.22, 11.33, 16.11, 18.03
no-look through-principle 26.30, 26.36
Non-executive directors (NEDs) 8.97
‘norms’ 23.1523.16
see also legal risk
Northern Rock 6.06, 6.13, 6.16, 7.02, 7.22, 8.06, 8.31, 8.45, 8.93, 17.22, 30.13
liquidity issues 7.077.10
notified NEDs 15.33
Office of Fair Trading 13.06, 20.21
offshore centres 8.91
see also Turner Review
on-pledge 22.31, 22.35
operational reserve 8.61
Organization for Economic Cooperation and Development (OECD) 11.12, 18.03, 24.71, 26.09
Guidelines for Multinational Enterprises 11.37
originate to distribute model (OTD) 6.196.23, 7.01, 24.14
out of court settlements 16.07, 27.11
outright transfer method 22.39
outsourcing 24.1624.23
over-ambitious legislation 27.0127.02
see also vague laws
over-regulation 8.93
pari passu principle 8.69, 8.84, 22.66, 22.68
Parliamentary Commission on Banking Standards 8.07, 8.09, 10.04, 10.22, 12.01, 13.14, 14.0914.12
Final Report 15.02, 15.05
Parliamentary Committees 6.18
Parmalat scandal 2.05, 24.21
passporting issues 19.0419.05
see also Brexit
Payment Protection Insurance (PPI) 8.02, 15.04, 16.15, 16.31
(p. 656) penal/punitive damages 17.31
performance reporting 12.14
PFI Schemes 24.70, 28.05
policy concerns 24.4124.46
Ponzi frauds 16.03
Ponzi schemes 1.10
PPP Schemes 24.70, 28.05
PRA Rulebook 15.30
precautionary principle 17.18
PRIMA (place of relevant intermediary approach) 26.12, 26.15
principal debtor language 22.50
principles-based regulation 8.93, 12.28, 29.01
privatization 17.17, 20.22, 20.2420.25
Proceeds of Crime Act 2002 24.40, 27.0327.25
see also vague laws
professional standards 12.1012.11, 31.15
professional behaviour 11.53
professionalization of banking 32.21
property 26.23
definition 27.17
market 7.227.23
rights 17.29, 17.32
property interests in directly held investment securities 26.0126.37
FMLC proposals 26.3526.37
global legal reforms 26.1726.18
Hague Convention 26.1226.16
market practice compared with law 26.0126.11
UNIDROIT Convention (‘Geneva Securities Convention’) 26.1926.34
acquisitions 26.2926.32
disposals 26.2926.32
investor rights 26.2126.28
other provisions 26.3326.34
security interests, creation of 26.2926.32
property transfers, partial 8.258.28
protected arrangements
definition 8.25
public participation 11.46
Public Private Partnership projects 24.24
quasi-securities 28.08
re-hypothecation see rights of use
re-securitisations 6.13
reasonable procedures 15.49
recharacterization 22.14, 22.39, 24.13, 24.15, 28.0128.30
fixed v floating charges 28.1928.21
floating charges, definition 28.2228.25
Lender’s Dilemma 28.2628.27
raising money, different methods of 28.0128.05
sale and security, essential differences between 28.0928.14
Spectrum case 28.2828.30
Welsh Development Agency v Export Finance Co Ltd case 28.1528.18
wrong labels, risk of 28.0628.09
reconciliation (accounting) 8.79
Recovery and Resolution Plans (RRPs) 8.61
redress schemes 16.2216.31
regulators 5.015.20, 13.02, 14.11, 24.17, 33.02
approach to risk management 29.0129.15
relevant intermediary
definition 26.24
remuneration 8.91
code 14.11
Remuneration Code (SYSC 19D) 15.20, 15.38
see also Turner Review
Repo 105 transactions 8.87
repo markets 22.09
Reserve Assets Ratio requirement 20.26
resolution fund order 8.29
responsibility see individual accountability
restriction of liability 16.20
restructuring officers 7.18
retroactivity principle 22.51
right of redemption 28.18
rights of use 8.568.57, 22.58
Rio+ 20 Conference 11.17–11.18, 11.23
risk management 1.11, 2.092.10, 11.05, 29.0129.65, 30.0130.50
assessment of risks 15.48, 17.05, 29.4329.47, Appendix 5
contractual provisions 29.6429.65
control and mitigation 29.5629.65
definition 29.19
effective 23.0923.10
electronic banking principles Appendix 5
environment Appendix 5
examples of scenarios 29.2229.35
fundamental operational principles Appendix 5
general approach of regulators 29.0129.15
focus on people 29.0629.11
priorities 29.1229.15
identification of risks 29.3629.42, Appendix 5
key questions Appendix 7
lawyers’ responsibility 30.0130.50
clarity of lawyer roles 30.4430.50
document retention 30.3830.43
need for clear methodology 30.0130.04
opinions and documents 30.2530.37
role of lawyers 30.0530.24
role of legal department 30.0530.24
monitoring 29.4829.55
practicalities Appendix 7
principles 29.1629.18, Appendix 5
rationale for study Appendix 7
scope of the function 29.1929.21
(p. 657) senior management Appendix 7
Turner Review 8.91
see also legal risk
risk-based, definition 33.02
risky products 5.07
risky trading activities 8.91
see also Turner Review
Rogue Traders 17.03, 23.09, 23.2323.27
Royal Bank of Scotland (RBS) 8.06, 10.10, 16.06, 16.13
bail-out of 6.16, 7.22
Sustainability Report 11.2811.29, 11.31
safety culture 17.30
sale and lease-back 28.08
sale and security
essential differences between 28.0928.14
Sales and repurchase (‘repos’) 28.08
scheme liability theory 17.23
‘scenario analysis’ 32.1332.16
securitization 1.02
securities
definition 26.23
interests, creation of 26.2926.32
lending 22.27
Securities and Investments Board (SIB) 20.20
segregation 8.79
self-regulating organizations 20.20
Senior Management Functions (SMFs) 15.0715.11, 15.14, 15.20, 15.35
Senior Managers Regime (SMR) 8.09, 14.15, 15.0415.19, 29.0629.07, 29.40, 30.01, 33.0733.08
Conduct Rules 15.2715.33
early observations 15.3415.39
Senior Persons Regime 14.11
Serious Fraud Office 13.06
set-off 21.0421.05, 21.1221.13, 22.0522.07, 22.15, 22.4022.43, 22.45, 22.47, 24.48, 24.72
arrangements 8.258.26
as quasi-security 22.54
Rule 4.90 Appendix 3
settling differences 22.0122.03
Settlement Finality Directive 22.71
‘sham’, concept 28.0928.10
shareholder revolts 5.08
Single Resolution Mechanism (SRM) 9.10
Single Supervisory Mechanism (SSM) 9.10
SIVS 8.91
see also Turner Review
small and medium sized businesses (SMEs) 8.038.04, 11.53, 16.29
social justice 17.09
Social Licence Concept 11.02, 11.23, 11.3611.53
Social Licence to Operate (SLO) 11.4911.51
soft law 11.0111.02, 11.3411.35, 24.41, 24.5124.59, 27.36
consumerism and 16.02, 24.6024.69
see also hard law
sources of legal risk 24.0124.73
behaviour of financial institutions 24.0424.23
exploiting the letter of the law 24.1224.15
implementation failure and misconduct 24.0924.11
limited legal awareness 24.0524.08
outsourcing 24.1624.23
interaction of law and finance 24.5124.73
globalization 24.7024.73
hard and soft law 24.5124.59
soft law and consumerism, interaction of 24.6024.69
nature of the financial markets 24.2424.39
cross-border business 24.3724.39
financial innovation 24.2424.31
new market sectors and convergence 24.3224.36
problems within the law 24.4024.50
bad law 24.40
inaccessible law 24.4724.48
policy concerns 24.4124.46
unpredictable judicial reasoning 24.4924.50
see also legal risk
South Africa 5.03
sovereign risk 25.08
special purpose vehicle (SPV) 1.02, 6.13, 17.22
Special Resolution Regime (SRR) 7.177.18, 8.11, 8.43, 8.51, 8.61, 22.09
Banking Liaison Panel 8.228.23
code of practice 8.208.23
compensation 8.298.37
other provisions 8.248.28
overview 8.138.15
partial property transfers 8.258.28
power to change the law 8.388.42
special resolution objectives 8.19
stabilization options under 8.138.42
trigger for exercise of stabilization powers 8.168.19
specific charge 28.25
see also fixed charges
Spectrum case 28.2828.30
stabilisation powers 1.09
stamp duties 30.29
(p. 658) standards
definition 32.09
‘grey areas’ and 32.1032.11
standards boards 11.53
state aid 16.05
Statements of Responsibility (SoR) 15.1215.15, 15.17, 15.34
stigma effect 10.07
stock lending 22.30
Stock Lending Documentation
problems with 22.2522.43
stress testing 5.07, 5.14, 29.12, 33.06
strict liability 15.43
structured transactions 29.12
sub-prime lending market 6.07, 6.13, 7.01, 7.047.06, 7.23, 16.07
subsidiarisation 4.06
Supplementary Special Deposits Scheme 20.26
Suspicious Activity Reports (SARs) 27.23
suspicious transaction and order reports (STORs) 27.28
suspicious transaction reports (STRs) 27.41
sustainable banking 11.0111.05
sustainable development 11.37
alignment of the financial system 11.1611.23
Sustainable Development Goals (SDGs) 11.17, 11.21
sustainability 10.2310.24
citizenship reports of banks 11.2411.35
definition 11.0611.15
Sustainability Report 12.14
Sustainability Accounting Standards Board (SASB) 11.24
swap markets 20.17
swap transactions 5.18
systemic risk 2.04, 6.13
Task Force on Climate-Related Financial Disclosures 11.21
tax evasion 15.46, 17.05
tax shelters 28.04
terrorism 17.31, 27.02
The Law Society 24.53
The Legal Risk Review Committee (LRRC) 21.0621.07
think tanks 6.18
third party compensation orders 8.29
tipping off 27.06
title finance 28.08
title transfer concept 8.58
title transfer financial collateral arrangement
definition 22.28, 22.30
‘too big to fail’ concept 6.02, 7.17, 7.23, 8.91, 8.93
tortious claims 16.16
tortious duty of care 16.17
training 12.09, 29.61
‘tranches’ of risk 6.13
transfer of control 26.34
transfer order
definition 22.72
Transparency International Corruption Perceptions Index 29.47
Triodos Bank 11.13
Triple Bottom Line approach 11.03
trust 11.29
definitions 26.26
see also metrics
TSB group 20.24
Turnbull Report 29.0929.10
text extracts Appendix 4
Turner Review 6.04, 6.266.27, 8.91, 13.0313.04
accounting treatment 8.91
capital 8.91
central counterparties in derivatives trading 8.91
‘classic’ commercial banking 8.91
clearing 8.91
CRAs 8.91
direct product regulation 8.91
hedge funds 8.91
liquidity 8.91
‘narrow banking’ 8.91
netting 8.91
offshore centres 8.91
remuneration 8.91
risk management and governance 8.91
risky trading activities 8.91
SIVS 8.91
systemic/intrusive approach to regulation 8.91
ultra vires doctrine 20.12, 20.19
UNCITRAL (United Nations Commission on International Trade Law) 18.0418.08, 24.71
UNEP Finance Initiative 11.18, 11.20, 11.28, 11.37
UNEP Statement of Commitment by Financial Institutions on Sustainable Development 11.19
UNIDROIT (International Institute for the Unification of Private Law) 2.04, 24.01, 26.1626.17
Convention (‘Geneva Securities Convention’) 26.1926.34
acquisitions 26.2926.32
disposals 26.2926.32
investor rights 26.2126.28
other provisions 26.3326.34
security interests, creation of 26.2926.32
international institution 18.0418.08
United Kingdom (UK) 8.018.99
bank insolvency and administration 8.438.62
bank administration order 8.50
bank insolvency order 8.468.49
(p. 659) investment bank insolvency 8.518.62
overview 8.438.45
Banking (Special Provisions) Act 2008 8.118.62
Banking Act 2009 8.118.62
Coalition Government (2010) 13.0513.06
Conservative Party 20.23, 20.2520.26, 20.29
debates over bonuses 9.20
financial institution failure and rescues 7.22
foreign banks 4.09; see also Brexit; London Markets
FSA, initial response of 8.91
gaming laws 6.04
government White Paper (2012) 14.0514.06
Landsbanki ‘Freezing Order’ 8.898.90
leading role as a financial centre 7.20
legal and regulatory responses, overview of 8.018.10
Lehmans UK litigation 8.638.88
New Labour government (1990s) 5.12, 7.11, 7.13, 20.20
public policy 6.05
‘regulatory failure’ and proposed changes 7.117.21
single market 9.10
Special Resolution Regime, stabilization options under 8.138.42
Banking Liaison Panel 8.228.23
code of practice 8.208.23
compensation 8.298.37
other provisions 8.248.28
overview 8.138.15
partial property transfers 8.258.28
power to change the law 8.388.42
special resolution objectives 8.19
trigger for exercise of stabilization powers 8.168.19
Thatcher government 20.21
tripartite regulatory system 7.11
Turner Review 8.91
accounting treatment 8.91
capital 8.91
central counterparties in derivatives trading 8.91
‘classic’ commercial banking 8.91
clearing 8.91
CRAs 8.91
direct product regulation 8.91
hedge funds 8.91
liquidity 8.91
‘narrow banking’ 8.91
netting 8.91
offshore centres 8.91
remuneration 8.91
risk management and governance 8.91
risky trading activities 8.91
SIVS 8.91
systemic/intrusive approach to regulation 8.91
‘Twin Peaks’ regulatory system 5.02, 8.07, 13.06
UK Listing Authority (UKLA) 13.09, 13.12
Walker Review 8.928.99
wariness of financial regulatory reform 7.21
United Nations (UN) 17.27
Environment Programme (UNEP) 11.18
Global Compact 11.37
Principles for Responsible Investment 11.37
United States (US)
class actions 5.045.06
Credit Rating Agencies 6.30
Dodd Frank law 4.13, 7.277.28
Federal Deposit Insurance Corporation (FDIC) 10.05
fiduciary rule 4.13
financial market problems 7.237.28
freeze orders 30.31
housing market; see also sub-prime lending market 6.13
Securities and Exchange Commission (SEC) 7.27, 24.45
securitization market 7.05
stress tests 5.07
trade imbalances with China 6.13
Treasury bonds 6.13
Trump Administration 4.13, 7.28
Uniform Commercial Code 26.18
US Commodity Futures Trading Commission 10.10
universal banks 1.02, 24.32
upper-tier attachment 26.2726.28
vague laws 27.0127.41
market abuse 27.2627.41
over-ambitious legislation 27.0127.02
Proceeds of Crime Act 2002 27.0327.25
Valukas Report 8.878.88
vendor credit 28.08
Vickers Commission 8.07, 13.14
Volcker Rule 7.27
voluntary codes 11.3611.53
Walker Review 2.09, 8.928.99
War Game exercise 1.01
Washington Consensus 17.01, 17.25, 17.32
Welsh Development Agency v Export Finance Co Ltd case 28.05, 28.13, 28.1528.18
(p. 660) Wheatley Review of LIBOR 10.1710.21, 14.0714.08
whistleblowing 12.19, 15.5015.54
white collar crime 8.02, 13.06
winding up liabilities 8.448.49, 22.41, 22.49, 22.51
Woolf reforms 3.09
Working Capital Guarantee Scheme 16.13
World Bank 18.03
Worldwide Financial Institutions Professional Liability policy (NMA 3000) 23.24
wrongful disclosure
of inside information 27.30