The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin

Tài liệu The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin Tài liệu The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin Tài liệu The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin Tài liệu The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin Tài liệu The bank credit analysis handbook a guide for analysis bankers and investor 2nd by golin

The Bank Credit Analysis Handbook Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States With offices in North America, Europe, Australia and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisors Book topics range from portfolio management to e-commerce, risk management, financial engineering, valuation and financial instrument analysis, as well as much more For a list of available titles, visit our Web site at www.WileyFinance.com The Bank Credit Analysis Handbook Second Edition A Guide for Analysts, Bankers, and Investors JONATHAN GOLIN PHILIPPE DELHAISE Cover Design: Leiva-Sposato Cover Image: Gradient ª Pavel Khorenyan/iStockphoto; Bank note ª Luis Pedrosa/iStockphoto Copyright ª 2013 by John Wiley & Sons Singapore Pte Ltd Published by John Wiley & Sons Singapore Pte Ltd Fusionopolis Walk, #07-01, Solaris South Tower, Singapore 138628 All rights reserved First edition published in 2001 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as expressly permitted by law, without either the prior written permission of the Publisher, or authorization through payment of the appropriate photocopy fee to the Copyright Clearance Center Requests for permission should be addressed to the Publisher, John Wiley & Sons Singapore Pte Ltd., Fusionopolis Walk, #07-01, Solaris South Tower, Singapore 138628, tel: 65–6643–8000, fax: 65–6643–8008, e-mail: enquiry@wiley.com Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor the author shall be liable for any damages arising herefrom Other Wiley Editorial Offices John Wiley & Sons, 111 River Street, Hoboken, NJ 07030, USA John Wiley & Sons, The Atrium, Southern Gate, Chichester, West Sussex, P019 8SQ, United Kingdom John Wiley & Sons (Canada) Ltd., 5353 Dundas Street West, Suite 400, Toronto, Ontario, M9B 6HB, Canada John Wiley & Sons Australia Ltd., 42 McDougall Street, Milton, Queensland 4064, Australia Wiley-VCH, Boschstrasse 12, D-69469 Weinheim, Germany Library of Congress Cataloging-in-Publication Data ISBN ISBN ISBN ISBN 978-0-470-82157-2 978-0-470-82943-1 978-0-470-82942-4 978-0-470-82944-8 (Hardcover) (ePDF) (Mobi) (ePub) Typeset in 10/12pt Sabon-Roman by MPS Limited, Chennai, India Printed in Singapore by Ho Printing 10 Contents Preface to the New Edition vii CHAPTER The Credit Decision CHAPTER The Credit Analyst 37 CHAPTER The Business of Banking 87 CHAPTER Deconstructing the Bank Income Statement 155 CHAPTER Deconstructing a Bank’s Balance Sheet 215 CHAPTER Earnings and Profitability 261 CHAPTER Asset Quality 337 CHAPTER Management and Corporate Governance 415 CHAPTER Capital 449 CHAPTER 10 Liquidity 493 CHAPTER 11 Country and Sovereign Risk 551 CHAPTER 12 Risk Management, Basel Accords, and Ratings 641 v vi CONTENTS CHAPTER 13 The Banking Regulatory Regime 717 CHAPTER 14 Crises: Banking, Financial, Twin, Economic, Debt, Sovereign, and Policy Crises 781 CHAPTER 15 The Resolution of Banking Crises 847 About the Authors 907 Index 909 Preface to the New Edition I n early 1997, Jonathan Golin applied for a position of bank credit analyst with Thomson BankWatch He had limited experience in financial analysis, let alone bank financial analysis, but Philippe Delhaise, then president of BankWatch’s Asia division, had long held the view that outstanding brains, good analytical skills, a passion for details, and a degree of latent skepticism were the best assets of a brilliant bank financial analyst He immediately hired Jonathan Jonathan joined a team of very talented senior analysts, among them Andrew Seiz, Damien Wood, Tony Watson, Paul Grela, and Mark Jones Philippe and the Thomson BankWatch Asia team produced, as early as 1994 and 1995, forewarning reports on the weaknesses of Asia’s banking systems that led to the Asian crisis of 1997 After the crisis erupted, Philippe made countless presentations on all continents, and he conducted, with some of his senior analysts, a number of seminars on the Asian crisis This led to a contract with John Wiley & Sons for Philippe to produce a book on the 1997 crisis that was very well received, and which we hope the reader will forgive us for quoting occasionally When in 1999 John Wiley & Sons started looking for a writer who could put together a comprehensive bank credit analysis handbook, Philippe had neither the time nor the courage to embark on such a voyage, but he encouraged Jonathan to take the plunge with the support of unlimited access to Philippe’s notes and experience, something Jonathan gave him credit for in the first edition of the Bank Credit Analysis Handbook, published in 2001 Meanwhile, Thomson BankWatch—at one point renamed Thomson Financial BankWatch—merged with Fitch in 2000, but Philippe and Jonathan quit prior to the merger Philippe carried on teaching finance and conducting seminars on bank risk management in a number of countries Recently, in Hong Kong, Philippe cofounded CTRisks Rating, a new rating agency using advanced techniques in the analysis of risk Jonathan moved to London, where he founded two companies devoted to bank and company risk analysis During the 2000s, the risk profile of most banks changed dramatically Many changes took place in the manner banks had to manage and report their own risks, and in the way such risks shaped a bank’s own credit risk, as seen from the outside Jonathan’s book needed an overhaul rather than a cosmetic update This is how eventually Jonathan and Philippe joined forces to present this new, expanded edition to our readers In the preface of the first edition, Jonathan thanked Darren Stubing for his substantial contribution to several chapters, and most likely some of Darren’s original input still pervades this new version of the book The same applies to texts contributed by Andrew Seiz in the first edition, and there is no doubt that research done by the Thomson BankWatch Asia team, together with some of their New York–based vii viii PREFACE TO THE NEW EDITION colleagues, permeates the analytical line adopted both in Jonathan’s first edition and in the present new edition of The Bank Credit Analysis Handbook The only direct outside contribution to this edition is coming from Richard Lumley in the chapter on risk management We are thankful to all direct and indirect contributors DRAMATIC CHANGES The crisis that started in 2007 is still on at the time of writing Banks and financial systems should share the blame with profligate politicians, outdated socioeconomic models, and a shift of the world’s center of gravity toward newcomers However deep the resentment against banking and finance—often fanned by otherwise entertaining political slogans1—banks are here to stay Banks remain a major conduit for the transformation of savings into productive investments It is particularly so in emerging countries where capital markets are still not sufficiently developed and where savers have limited access to direct credit risk opportunities Even in advanced economies, access to market risk often involves dealing with banks whose contribution as intermediaries is sometimes—and often justifiably—questionable More than most other financial intermediaries, banks carry substantial credit and market risks They act as shock absorbers by removing from their depositor’s shoulders—and charging, alas, hefty fees for the service—some of that burden As we shall point out in this book, weak banks actually rarely fail—they often merge or get nationalized—or at least their problems rarely translate into losses for depositors2 or creditors Major disasters occur, though, and we should not dismiss the view that the mere possibility of such an occurrence is enough for state ownership or state control of banks to gain respect in spite of the huge inefficiencies such models introduce At the very least, banks should be submitted, within reason, to better regulatory control Banks, however, cannot survive unless they take risks The trick for them is to manage those risks without destroying shareholder value—the fatter the better, from a creditworthiness point of view—and without endangering depositors and creditors STRUCTURE OF THE BOOK This book explores the tools available to external analysts who wish to find out for themselves whether and to what extent a bank or a group of banks is creditworthy It is a jungle out there A wide range of theoretical research is available Extreme opinions exist on most topics, making it difficult to reach a consensus on a middle ground where depositors, creditors, and regulators should confine the banking systems’ risk analysis Our book is a modest attempt at balancing the wealth of research and opinions within a useful handbook for analysts, regulators, risk assessment offices, and finance students Dividing bank credit analysis in separate chapters was a headache Asset quality has an impact on earnings and on capital adequacy, liquidity on asset quality and earnings, management skills on asset quality, earnings on capital, accounting rules on earnings and capital—all on convoluted Möbius strips 910 Bank and banking (continued) bank failure, 25, 28, 339, 351, 389, 437, 450, 455, 461, 471, 479, 512, 544, 655–656, 686, 710, 745, 749, 751, 769, 777, 783, 784, 786, 792–794, 810, 820, 836, 837, 847, 849, 856, 873, 912 bank insolvency, 25, 26, 381, 383, 434, 449, 454, 479, 483, 485, 491, 496, 547, 597, 655–656, 660–661, 666, 710, 736, 755–757, 786–787, 789–790, 792, 794, 834–835, 838, 840, 841, 849–850, 852, 857, 861, 863, 865–866, 870–872, 884, 900, 901 bank intermediation ratio, 570, 587, 605–606, 637, 825 bank mergers, 25, 139, 178, 305, 315, 319, 325, 331–333, 412, 422, 708, 728, 734–735, 783, 790, 827, 874, 892 bank recapitalization, 478, 770, 790, 799, 849, 851–852, 855, 857, 862, 867, 870, 872–874, 877–880, 883–884, 886, 889, 891–892, 894, 896, 900 bank restructuring, 865–869, 873, 876–878, 880–881, 887–889, 891, 896–903 bank run, 165–166, 208–209, 352, 450, 493–494, 497–498, 724, 727, 741, 749–750, 769, 790, 798–799, 815, 826–827, 839–840, 847, 859 bank stock price, 83, 443, 448, 450, 614–615, 638 bank visit, 43, 66–67, 402, 421, 422, 425–426 corporate banking, 95, 337, 652, 865, 871, 887, 907 investment banking, 93–95, 104, 116, 138–141, 144, 150, 171, 180–183, 211, 265, 337, 546, 649, 704, 709, 733–734, 763 merchant banking, 140–141, 152, 763, 783, 905 private banking, 145–146, 806 trust banking, 22, 145, 152, 182, 775 INDEX wholesale banking, 22, 95, 176, 210, 305, 319 banking (or financial) system fragility, 512, 553, 631, 718–719, 758, 786, 821, 844 banking book, 119, 668–670, 675, 682, 695–696 Bank for International Settlements (BIS), 77, 292, 448, 484, 488–491, 547, 695–696, 702, 715, 778, 838–839, 843–844, 889–890, 902–903 Bank Negara Malaysia, 894 Bank of America, 180, 546 Bank of Canada, 845 Bank of Credit and Commerce International, 834 Bank of East Asia, 246, 762 Bank of England, 488, 609, 752, 783, 822, 834, 841, 843, 901, 903–904 Bank of Thailand, 520, 763, 877 Bank of the Netherlands, 631 Bankers Trust, 285, 650 Bankruptcy, 6, 26, 30, 33, 110, 112, 137, 151, 355–356, 369, 370, 375, 404, 517, 557, 586, 635, 661, 666, 756, 757, 776, 799, 813, 835, 857–858, 865–866, 871, 881, 884, 887–888, 904 Baring, Francis, 901 Barings Bank, 650, 686, 714, 782–783, 785, 834 Barth, James R., 720, 722, 731, 755, 773–775, 778 Bartholomew, P., 835 Baruch, Bernard, 282 Basel accords Basel I (1988), 110, 116, 151, 289, 411, 454, 486, 488, 449, 456, 461–462, 464–465, 467, 469–470, 474, 477–484, 486, 488–491, 689–690, 701, 715, 776 Basel II, 35, 53, 82, 284, 290, 454, 461, 469, 477, 479, 481–484, 486, 491, 521, 536, 641, 648, 650, 654, 685, 687–688, 692, 694–697, 699, 701, 706–708, 712, 715, 735, 736, 776, 816, 822, 843 Basel 2.5, 695–696 Index Basel III, 53, 82, 284, 290, 342, 481, 484, 525, 527, 536, 548, 641, 654, 687–689, 695–702, 706, 735–736, 776, 787, 816, 822 Basel Committee on Banking Supervision (BCBS), 344, 437, 448, 468, 481, 488–489, 491, 506, 546–547, 663–664, 689–692, 695–696, 715 Bauer, Gregory W., 484 Beers, David T., 558, 632 Behm, Daniel O., 810 Bell, James, 819, 822–824, 827, 834, 843–845 Bello, Rafael, 903 Berge, 838 Bernanke, Ben, 800, 840, 898 Bernstein, Peter L., 679, 714 Bessis, Joel, 641, 653, 709, 710 best practice, 67, 70, 208, 263, 345, 429–430, 432–434, 438–443, 447, 468, 548, 644–645, 719, 739, 757, 880, 897, 904 Black, Fisher, 131, 247, 649 Blaschke, Winfrid, 837 Blejer, M., 839 Bliss, R.R., 801, 840 Bloem A., 776 Bordo, Michael, 811–812, 841–842 Borio, Claudio, 819, 823–824, 843–844 Bosworth P., 845 Brady Bonds, 814 Bretton Woods, 649, 810–812, 814, 818, 846 Broadfoot, Robert, 566 brokered deposits, 242, 317, 512, 514–515, 527, 533 Brookings Institution, 757, 845 budget surplus or deficit, 561, 569–570, 587–591, 593–595, 598, 616, 628, 634, 692, 756, 771 business confidence, 580–581, 583, 758, 804, 807 Business Environment Risk Intelligence (BERI), 566 buy-side, 40, 49 911 Cadbury, Adrian, 447 Cade, Eddie, 468, 484, 486–488, 641, 651, 709–710, 714 Calomiris, Charles W., 791, 837, 858, 863, 900–901 Calverley, John, 638 CAMEL, 80–81, 83, 85, 256, 261–262, 267, 279, 313, 340, 365, 416, 478, 519, 534–535, 558–559, 565, 642, 644, 667, 728, 742, 792–793, 820, 822, 824–825, 843 Canadian Deposit Insurance Corporation, 778 capacity to pay, 1–2, 8, 10–11, 14, 19, 21, 32, 105, 568, 756 Capital analytical capital, 456, 462–463 compliance capital, 705–707 core capital, 463, 470, 476, 490, 681, 697 economic capital, 35, 213, 269, 284–285, 335, 454, 456, 479, 482–484, 486, 491, 650, 678–679, 683, 686–687, 689–692, 701, 705, 714–715, 898 equity capital, 34, 156, 221, 243, 301, 339, 350, 362, 381, 455–456, 458–460, 462–463, 465, 467, 470–471, 476, 485–486, 488, 491, 530, 721, 741, 783, 788, 825, 835 financial capital, 456, 458–459, 485 regulatory capital, 106, 151, 243, 258, 349, 450, 454–456, 461–462, 464, 467, 469–470, 473–476, 480, 482–486, 490–491, 516, 666, 683, 687, 689–691, 696, 698, 701, 735–736, 776, 787–788 supplementary capital, 470–471, 473, 477, 490 tier capital, 77, 456, 470–478, 489–490, 522, 696–698, 738, 787, 792, 877 tier capital, 77, 411, 456, 470–476, 478, 481, 489–490, 514, 522, 787, 851 tier capital, 474–475, 490 capital (basic ratios and indicators), 463–467 912 Capital (continued) capital account (country’s), 245, 579, 617–621, 626, 638, 800 capital adequacy ratio (CAR), 449, 469–470, 477–478, 481–482, 484, 715, 825 capital productivity, 630 Capra, Frank, 493 Caprio Jr., Gerard, 720, 722, 731, 755, 773–775, 778–779, 791, 810, 834–835, 838, 841–842 cash equivalent, 22, 157, 220, 227–229, 238, 256–257, 459, 521, 523, 531, 537, 544, 548, 625 cash management, 82, 118, 144, 146–148, 220, 231, 255, 257 Cates, Jane, 546 Cavanaugh, Marie, 558, 632 Central Bank of Chile, 823, 835 Central Bank of Kuwait, 509, 546 certificate of deposit (CD), 92, 175, 210, 218, 239–241, 243, 514–515, 529 chaebols, 509–510, 776 Chang, R., 801, 840 charge-off, 77, 115, 213, 236–238, 250, 271, 292–294, 303, 335–336, 344, 352, 355, 358, 363–365, 372, 376, 386–393, 412 Cheng, Andrew, 847, 855–857, 897, 899, 900 Chicago School, 842 Christian, A., 785, 790, 835, 844 Churchill, Winston, 724 Cihak, Martin, 778 Citigroup, 94, 140 Claessens, Stijn, 855, 859, 861, 877, 898–899, 901, 903 clawback (interest), 362, 410, 737, 739–740, 776 clearing, 32, 122–123, 131, 144–145, 147, 182, 256, 265, 540, 684, 773 CLSA, 442–443, 448 Coleman, A., 32, 412 collateralized debt obligation (CDO), 249, 253, 882 Collins, Andrew B., 93, 638 commercial paper, 119–122, 153, 209–210, 228, 239, 242, 258, 504, INDEX 512, 514–515, 517, 521–523, 533, 539, 545, 582, 703 commissions, 76, 90–93, 116, 120, 144–145, 149, 154–155, 178–184, 186–187, 191, 203, 207, 211, 255, 286, 307, 324 Comprehensive Capital Analysis and Review (CCAR), 697 concentration and overconcentration, 5, 107, 270, 340, 371, 396–400, 403, 405, 408, 415, 512, 517, 586, 637, 659–660, 662–663, 684, 693, 700, 714, 728, 734, 736–738, 758–759, 761–762, 776, 779, 831, 898 conflict of interest, 704 connected party lending, 463 consolidation, 85, 203, 405, 647, 705, 718–719, 733, 735, 744, 759, 761–762, 777, 873, 875, 892, 894, 896–897, 905 consumer confidence, 565, 580–581, 583, 728 consumer loan, 98, 150, 173, 235, 237, 271, 293, 335, 396, 400–401, 414, 585 consumer protection, 698, 728, 748–749, 774 contagion, 25, 26, 433, 555, 626, 698, 797–798, 802, 814–815, 820, 822–823, 840, 846, 859, 891 Continental Illinois Bank, 704, 810 contingent funding facilities, 503–504 contingent liabilities, 247, 477, 539, 593, 725, 748, 879 Control Risks Group, 566 Corporate Debt Restructuring Committee (CDRC), 892, 894–895 correspondent bank, 9, 31–32, 46, 51, 67, 82, 84, 106, 126, 128, 503, 545, 704 Corrigan, E Gerald, 721, 773 cost asset ratio, 275–276, 304–305, 307–308, 313, 318 cost income ratio, 275–276, 304–308, 311–313, 318 Index Credit credit cards, 19, 93–95, 98, 109, 111–115, 144, 147, 150, 152, 180–181, 183, 292, 302–303, 335, 396, 402, 518, 585 credit culture, 62, 371, 393–394, 399, 402–404, 406–407, 414, 425, 642, 719, 748, 758, 764, 779, 794–795, 851, 855, 870, 876, 879–880 credit cycle, 118, 314–316, 333, 338, 368–370, 375, 394, 413, 574, 576, 578, 586, 606, 637, 775, 777, 803–804, 816, 840, 845 credit default swap (CDS), 53, 137, 249, 253, 347, 627, 684 credit officer, 40, 52–54, 82, 150, 405, 408, 646, 653, 704, 706 credit scoring, 19, 38, 42, 59, 150, 683, 707 credit-linked notes, 137, 249 Credit Lyonnais, 411, 815 Crises economic crisis, 369, 404, 513, 712, 781, 785, 834, 845, 889, 898 policy crisis, 781 sovereign crisis, 781, 786 financial crisis, 25, 60, 93, 114, 146, 400, 411, 564, 578, 589, 602, 606, 691, 695, 750, 774, 779, 781–782, 784–786, 789, 791–792, 797–799, 801–802, 811–816, 819–822, 828, 830, 835, 837–843, 848, 854, 856, 859, 863, 889, 894, 899–901 twin crises, 774, 781–782, 799–802, 810, 811–812, 839–840, 846 currency crisis, 626, 631, 638, 741, 753, 782, 784, 791, 796–800, 802, 813–814, 820, 823, 828, 831–833, 835, 838–840, 842–844, 891 debt crisis, 60, 98, 253, 256, 439, 509, 540, 614, 625, 632, 698, 704, 811, 813–814, 835, 848, 878 Crouhy, Michel, 709–711 current account (country’s), 570, 579, 588, 615–622–623, 625, 628–630, 637–638, 802, 818, 833, 835 custody, 46, 122–123, 144–145, 152, 265, 538 913 Dah Sing Financial Holdings, 160, 233 Daiwa Securities, 710 Danaharta, 886, 892–896, 904–905 Danamodal, 885, 892, 894–896, 905 Davis, E., 839 DBS, 192 De Winton, W., 259 Deardorff, 839 debit cards, 111–112, 115, 152 DEBT government (or public or national) debt, 47, 80, 106–107, 119–120, 509, 591–593, 595, 598, 610, 635, 638 debt service, 401, 431, 518, 558, 587, 607, 622–625, 741 Delhaise, Philippe, 412, 549, 639, 774–775, 779, 830–831, 837, 840, 843, 845846, 904, 907 DemirgỹỗKunt, Asil, 777, 790, 836, 845 deposit insurance, 29, 256, 352, 467, 494–495, 497, 503, 512, 519, 542–547, 552, 717, 723, 726–728, 730, 741–742, 746, 749, 751, 765, 769, 778–779, 782, 789, 812, 844, 860, 866, 869–870, 902, 907 deposit mix, 317 deposit-taking institution, 29, 88–89, 117, 149, 239, 267, 334, 337, 511, 545, 554, 783 Detragiache, Enrica, 777, 790, 836 Deutsche Bank, 94, 140, 186–187, 203, 212, 441–443, 448, 541 development bank, 747, 774, 907 Dexia Bank, 132, 452, 502, 698 disintermediation, 89, 91, 115–116, 146, 149, 211, 317, 337, 595, 598, 606, 760–761, 764, 779 distress (financial distress) 26, 29, 34, 105, 164, 264, 291, 323, 397, 400, 413, 460, 478, 498, 519, 534, 545, 576, 624, 638, 721, 732, 747, 753, 768–769, 782, 784, 786–788, 790, 792, 798, 803, 807, 819–821, 824, 834, 836–837, 844–846, 848, 849, 861, 864, 874, 877–878, 888–889, 900 914 documentary letter of credit (L/C), 32, 46, 53, 104, 124–129, 246, 396 Dodd-Frank Wall Street Reform and Consumer Protection Act, 698 Dominion Bond Rating Services (DBRS), 294, 463, 487, 493, 497, 505, 510, 532, 538–539, 543–544, 546, 548–549 double leverage, 466–467, 488 Dow, J., 447 Dresdner Kleinwort Benson, 547 Duff & Phelps, 703, 705, 809 Duncan, Richard, 818, 833, 843 Dziobek, C., 863, 898, 901 early warning system, 48, 782, 789–790, 819–828, 832–838, 843–846 earnings quality, 60, 262–264, 268, 325, 334, 448 Economist Intelligence Unit, 566, 907 Econstats, 584 efficiency ratios, 77, 186, 262, 275–276, 285, 303–307, 310, 318, 383, 468, 488, 610, 721–732, 762, 768, 831, 851–852, 870, 881, 883, 887 Eichengreen, Barry, 631, 777, 781, 785, 791, 811–812, 833–834, 837, 841–842, 846 Emmanuel, J., 777 equity analysis, 41, 56, 58, 81, 83, 204, 278, 464 equity-at-risk, 681–682, 765 Estrella A., 824, 844 Euromoney, 148, 484, 630, 639, 907 European Banking Authority (EBA), 697, 715 European Central Bank (ECB), 493, 506, 543–544, 546, 636, 838 European Commission, 583, 697 European Monetary Institute, 838 Evans, Owen, 837, 844 expected loss, 4, 17, 24, 26, 213, 348, 351, 409, 483, 660, 662–663, 679, 706, 821 exposure at default, 5, 24, 61, 409, 483, 660, 662–663, 690, 705, 711 External Credit Assessment Institutions (ECAI), 706–707, 716 INDEX external debt, 559, 570, 687, 588, 591, 615–617, 622–623, 625–626, 630, 632, 635, 639, 845, 890 extraordinary (exceptional) item, 160, 196–197, 207, 213, 220, 594 Facilities overdraft facilities, 92, 101–102, 112, 150, 152, 236, 529, 536, 684, 749 revolving facilities, 92, 99–102, 107, 125, 150, 152, 504, 684 standby facilities, 101–102 rollover facilities, 99–102 note inssuance facilities, 101–102, 153 acceptance facilities, 103–104, 120, 124, 210, 224–225, 521, 533 fair value accounting, 20, 186–187, 218, 229–233, 257, 331, 348 Federal Deposit Insurance Corporation, 171, 256, 258, 467, 488, 503, 505, 519, 542, 544–546, 613, 844 Federal Reserve Bank, 65, 153, 165, 209, 242, 415, 450–451, 463, 481, 484, 487, 532, 537, 544, 575, 580, 582, 584, 598, 604, 608, 612–613, 634, 637–638, 657, 681, 697–698, 715–716, 721, 752, 773, 824, 837 fees 76, 90, 92–93, 104, 106–107, 110, 112–117, 126–127, 135–136, 138–140, 143–145, 149, 152, 154–155, 163–164, 171, 174, 178–184, 186–189, 191, 197, 200, 203, 207, 211–212, 246, 248, 251–253, 255, 303, 307, 316, 324, 356, 500, 538–539, 594, 630, 703–704 Feldman, Ernesto V., 839 Feltenstein, A., 839 Fidelity Investments, 637 Fight, Andrew, 639 Finance One, 498 financial architecture, 817–818, 837, 843 financial innovation, 647, 816, 840, 842 financial liberalization, 791, 796, 801, 810, 812–813, 827–830, 832, 842 Financial Services Authority (FSA), 752–753, 907 915 Index Financial Stability Board (FSB), 25, 697, 715, 762 Financial Times, 493, 543, 715 fiscal policy, 560–561, 569, 586–589, 591–596, 602, 616, 632–633, 785 Fitch Ratings, 40, 49, 66, 215, 255, 294, 415, 430, 444, 446–447, 488, 490, 689, 703, 705, 907 fixed income analysis, 17, 41, 44–45, 52, 54–55, 67, 79, 83 Fontenla, Matias, 839 Foreclosure, 6, 30, 354–355, 358, 383, 404, 406, 413, 757, 857, 869, 881, 883, 904 foreign currency foreign currency exposure, 669, 673–674, 737, 738 foreign currency position, 119, 337, 670, 672–674, 713, 741 foreign currency reserves, 558–559, 622–625, 639, 818 foreign exchange FX spot, 53, 129–130 FX forward, 130–131, 625 FX swap, 130–131, 135–136, 249, 251–252, 650 FX future, 131, 134 FX option, 46, 131, 139 foreign ownership, 422, 630, 734, 759, 766, 777, 858 Fortis Bank, 498, 783, 785 Fortune magazine, 21, 552 Franklin Roosevelt, 812, 842 Freeman, R., 776 Fried, Dov, 210 Friedman, Milton, 602, 842 front office, 54, 118–119, 652, 693 Frost, Stephen, 857, 900 Fukuyama, 843 Fundo Garantidor de Creditos, 751, 778 Furman, J., 845 Galai, Dan, 709, 711 gap analysis, 485, 496, 501, 668–671 Garcia, Gillian, 839, 841 Gardner, Mona, 457, 485 Garg, Sunil, 444 Gaubis, Anthony, 37, 82 Gaytán, A., 785, 790, 835, 844 GDP deflator, 596, 633–634, 636 gearing, 216, 221–222, 279, 281–282, 286–287, 451–452, 505, 637 General De Gaulle, 562 General Motors, 865 general provisions, 332, 411 Gertler, M., 800, 840 Gilchrist, S., 800, 840 Gill, Mahinder, 837 global financial crisis (2007–2012), 35, 52, 60, 93, 109, 114, 146, 211, 228, 250, 418, 429, 433, 494–495, 498, 516, 518, 543, 545–546, 636–637, 691–692, 695, 697, 725, 750, 775, 791, 816, 842, 847, 865, 871 Glossman, Diane B., 259 Goldfajn, I., 801, 840 Goldman Sachs, 81, 140, 679, 709–710, 712, 714, 773, 897 Goldstein, Morris, 767, 778–779, 821, 825, 827–828, 830, 832, 837, 841, 845 Golin, Jonathan, 447, 907 González-Hermosillo, 825, 845 good bank, 849, 852, 883–884 Goodhart, C., 778 goodwill, 34, 217–219, 224, 226, 228, 238, 255, 284, 331–332, 462, 464, 471, 474–475, 479 government debt service, 592 Greenspan, Alan, 415, 444, 605 Grela, Paul, vii Grier, Raymond, 32 Grundfest, Joseph, 393, 506 Guillard, Olivia, 490 Gupta, P., 790, 836 Hale, Roger H., 8, 31 Hamanaka, Yasuo, 710 Hanazaki, M., 841 Hang Seng Bank, 283, 289–290, 306, 762 Hanschel, E., 824, 844 Harford, Tim, 774 Hasan, I., 409 Hawkins, John, 872, 902 Hempel, George H., 32, 412 INDEX 916 Hendricks, D., 824, 844 hidden reserves, 468, 472–473, 475, 489 Hilbers, Paul, 837 Hiroko, Iwaki, 777 Ho, Szu Yin, 31 Ho, T., 845 Hoffman, Paul, 898, 899 Hoggarth, Glenn, 841, 862, 880, 901, 903904 Hollande, Franỗois, x Honahan, Patrick, 821 Hope, Bob, 87, 149 Horiuchi, A., 841 Horngren, C., 259 Hosono, Kaoru, 771 hot money, 175, 547, 807, 813–814 HSBC, 283, 290, 306, 762 Hsieh, M.F., 844 Hume, David, 781 Humphrey, Thomas M., 901 Hutchison, Michael M., 839 hybrid debt, 243, 471–473 insurance products and income, 91, 126, 148–149, 171, 180, 182–184, 188, 193, 211–212, 218, 225, 255, 284–285, 329, 348, 592, 682, 684, 732, 734 interest accrual, 359–363, 410–411, 591, 737, 739, 776 International Monetary Fund (IMF), 11, 633, 717, 726, 776, 811, 819, 833–834, 838–840, 841, 843–845, 863, 898–899 Irving, K., 777 Ismail, Wan, 903 IAS, 197, 206–207, 226, 228–230, 234, 239–245, 255–257, 329, 349, 743 IBCA (see also Fitch), 255, 704–705, 815 IGRC, 465–466 Iguchi, Toshihide, 710 illiquid assets, 108, 165, 493, 508, 523–524, 526, 528, 531–532, 777, 836, 852, 884, Ineke, Jackie, 490 ING Bank, 686, 783 insolvency, 15, 25, 26, 203, 282, 340, 404, 410, 434, 454, 479, 483, 496, 557, 586, 597, 655, 666, 710, 756–757, 786–787, 792, 823, 835, 838, 840–841, 848, 852, 857, 861, 865–866, 871–872, 884, 900–902 institutional investors, 48, 49, 55, 83, 91, 144–145, 153–154, 210, 429, 703, 760, 764, 813, 902 insurance companies, 18, 23, 39, 48–49, 50, 87, 89–91, 123, 148–149, 284, 285, 348, 485, 490, 592, 760, 763–764 Kambhu, J., 824, 844 Kaminsky, Graciela L., 821–822, 825, 827, 832, 837, 840, 844–846 Kane, Edward, 840 Kaufman, George G., 554, 631, 801, 839–840 KB Financial Group, 235–236 Keefe, Bruyette and Woods, 140, 704 Keleher, Robert R., 901 KeyCorp 170, 172–173, 175–177, 181–185, 189–190, 192, 198–199, 210–211, 213, 217–221, 224, 229, 231–237, 239–242, 244, 255, 257 Keynes, John Maynard, 411, 592, 880 Kibritcioglu, A., 839 Kindelberger, Charles, 411, 810, 841 King, Th.B., 824, 844 Klingebiel, Daniela, 791, 837, 858, 863, 900–901, 834–835, 838, 841–842 Kohl, R Neal, 93, 638 Kolari, James, 820, 844 Krueger, Russell, 837 Krugman, Paul, 367, 411, 583, 634 Kuper, Gerard H., 835 J von Hagen, 845 J.P Morgan, 650, 675, 758 Jacobs, Jan P.A.M., 835 Jaffray, Piper, 93, 638 Jagtiani, Julapa, 820, 844 Jiménez, Gabriel, 845 Jones, Mark, vii Jorion, Philippe, 710, 713, 714 Juvenal, 727 Index L’Anson, Kenneth, 639 La Porta, R., 779 Laeven, Luc, 33, 790, 811, 837, 841, 900–901 Lamfalussy, Alexander, 797, 838 Larrain P., Christian, 785, 790, 813, 835, 842, 844, 897 leases and leasing, 85, 108–109, 171–172, 174, 180, 182, 192, 209–211, 218, 235, 237, 357, 401, 408, 410, 521, 533 Lee, Don, 898 Lee, Ivan, 32 Lee, Jih Chu, 31 legal system, 10–12, 14, 33, 383, 558, 565, 632, 718, 721, 756–758, 831, 881–883 Lehman Brothers, 56, 83, 132, 536, 546, 837, 847 Lemieux, Catherine, 820, 844 lender of last resort, 26, 35, 519, 548, 723, 770, 777, 789, 834, 860, 901 Leone, Alfredo M., 837 Lestano, 835 Levine, Ross, 722, 755, 773–775, 778 Lin, Jan Juy, 778 Lindgren, Carl-Johan, 839, 841 liquid Coverage Ratio (LCR), 699, 700 liquidity (basic ratios and indicators), 524–539 liquidity gap, 496, 533, 672 liquidity trap, 597, 634 Lister, Roger, 487, 544 Lizondo, Saul, 822, 844 Llewellyn, David, 791, 837–838, 899 loan classification (NPLs), 341–354 loan loss reserves, 78, 194–195, 213, 234, 236–238, 245, 255, 258, 293–294, 300, 320, 322, 326, 333, 335, 338, 340, 343–344, 351–353, 363–366, 372, 376–377, 379–382, 385, 389, 393, 409, 411, 413, 453, 461, 472–473, 486, 548, 776, 803, 841, 858, 861 loan portfolio, 338, 347–348, 352, 363, 372, 389, 394, 396, 397, 405–406, 408, 412, 414, 517, 528, 540, 593, 917 732, 736, 747, 776, 779, 803, 861, 891, 901 Locke, John, 2, 30 Lok, Anthony, 372, 378, 411 Long Term Capital Management (LTCM), 502, 681, 710, 848, 898 Lopez-De-Silanes, Florencio, 779 loss given default (LGD), 17, 23–24, 35, 61, 344, 387–388, 409, 483, 662–663, 683, 690, 705, 783 Lowe, Philip, 819, 823–824, 843–844 Lowenstein, Roger, 898 Lown, Cara, 637 Loyola University, 554 Lumley, Richard, viii, 681, 691, 709, 714 Lynch, Kevin, 850, 898 Maastricht Treaty, 635 Macfarlane, I., 785, 834 macro level analysis, 42, 47, 62–63, 88, 256, 296, 305, 313, 315, 368–369, 410–411, 551, 553–556, 558, 562, 568–570, 572, 574, 578–579, 584–585, 587, 601–602, 614–615, 626, 632–635, 670, 696, 708, 725, 779, 782, 784–786, 793, 795–796, 798, 808, 815, 819–827, 832–833, 838–842, 844–845, 847, 866, 890, 899 Maculloch, Hugh, 449, 641 Mahathir bin Mohamad, x Mahoney, Christopher T., 484 management’s competence, 16, 32, 60, 63, 296, 416, 420–421, 423, 426, 428, 435–436, 445–446, 709 management’s integrity, 424, 446 Manzer, Virginia L., 555, 631 Marchant, Mary A., 635 Mareels, Carlo, 490 Mark, Robert, 709, 711 mark-to-market, 331, 486, 668, 697 Marquis, Milton H., 631 maturity mismatch, 516, 672–673, 700, 713, 740 Mayer, Martin, 32, 543, 546, 837 McConnell, Patrick, 691 McDonald, George, 152 918 McDonalds Corporation, 633 Meltzer, Allan H., 637 Merrill Lynch, 546, 777 Merriwether, John, 681 Merton, Robert C., 645, 651, 659, 681, 709–710 Meyer, Larry, 487 micro level analysis, 62–63, 296, 315, 318, 338, 410, 412, 708, 782, 784, 793–794, 798, 819, 821–825, 827, 838, 840, 844–845, 847 middle office, 118–119, 651 Mill, John Stuart, 803 Miller, Merton, 717 Mills, Dixie, 457, 485 minority interest, 76–77, 160, 200–203, 206–207, 214, 227, 244–245, 283, 291, 293, 471, 476 Minow, N., 447 Mishkin, F S., 840 Mitsubishi, 178–179 monetarism, 601–602, 634, 637, 657, 842 monetary inflation, 596 monetary policy, 560–561, 569, 578–579, 584, 586–588, 595–596, 598–599, 602–605, 608, 612, 632, 635–637, 721–722, 736, 748, 752–753, 774, 776–777, 785, 793, 799, 801, 807, 813, 827, 829, 835–836, 840, 864, 878, 897, 903 money multiplier, 599–600, 603, 636, 804 money supply (M1-M2-M3), 367, 569–570, 579–582, 586–588, 595–596, 598–599, 601–605, 607, 625, 636–637, 722, 778, 804, 818, 827, 832–833, 891 Monks, R., 447 Monnin, P., 824, 844 Moody’s Investor Services, 27, 40, 49, 57, 66, 261, 292, 294, 337, 408, 450, 484, 487, 537–539, 548, 549, 570, 623, 631–632, 639, 689, 703, 704, 715 moral hazard, 29, 34, 428, 547, 725, 726–727, 741–742, 750–751, 769, 774, 779, 825, 831, 847, 853, 857, 860, 870, 873 INDEX Moretti, Marina, 837 Morgan Stanley, 140, 254, 259, 479, 490, 572 Morgan Stanley Dean Witter, 903 Morgan, Donald P., 637 Morris, Charles, 781, 833 mortgage backed securities (MBS), 53, 82, 102, 108–109, 111–112, 120, 151–152, 232–233, 249, 495, 546, 647, 650, 680, 834 Morton, Katherine, 715 Mosser, P., 824, 844 Mote, L., 835 municipal issuers, 18, 43–44, 46, 121–122, 233, 770 Murphy, R Taggart, 2, 30, 31, 467, 488 Murray, Chester, 704 Myners (Lord), 415, 444 Nagayasu, Jun, 837 Nagy P J., 551, 630 name lending, 10, 32, 404, 406, 414 Natalucci, F., 800, 840 Nationally Recognized Statistical Ratings Organization (NRSRO), 703, 707 NBFI (Non-Bank Financial Institution), 18, 23, 32, 39, 49, 149, 637 net Stable Funding Ratio (NSFR), 699–700 Neuberger, Ilan, 839 New York Times, 82, 714 New York Times Magazine, 679 Nicolich, Daniel, 152 Nocera, Joseph, 679, 680 Northern Rock, 357, 495, 498, 609, 750, 783, 785, 847 Northern Trust, 691, 709, 714 Nuxoll, D.A., 824, 844 O’Brien, Mark, 837 OECD, 429, 442, 446, 454, 470, 474, 480, 490, 589–590, 635, 876 Olson, K., 444, 446 one-off items, 196–197, 270, 286, 315, 325, 328, 330–331 Orange County, 132, 709 Index Pain, Darren, 819, 822–824, 827, 834, 843–845 Paitoon, Chayapat, 256 Palmer, Howard, 87, 148, 450, 484 Park, S., 824, 844 Pazarbasioglu, C., 863, 898, 901 pension funds, 48, 145, 329–330, 441, 760, 764, 768 People’s Bank of China, 636 Peristiani, S., 824, 844 Piana, Valentino, 634 Pigou, Arthur C., 773 Podpiera, Richard, 778 policy lending, 265, 288–289, 316, 395, 397–398, 403, 721, 728, 735, 746–748, 795, 831, 838, 846 Political and Economic Risk Consultancy (PERC), 566 Posner, Richard, 897 preferred (preference) share, 203–205, 214, 225, 243–244, 258, 278, 283, 334, 356, 463, 470–471, 473–474, 476, 489, 539, 878, 894 price inflation, 569, 573, 586, 596, 601–602, 633, 804 probability of default, 4–7, 17–18, 24–25, 32, 35, 60, 409, 483, 659, 662–663, 683, 693, 702, 705, 708, 711, 718, 821, 844 procyclicality, 570, 800–801, 840 profitability (basic ratios and indicators), 274–313 property revaluation, 329 proprietary trading, 40, 54, 117–118, 123, 129–130, 139–140, 153, 231, 233, 263, 410, 499 prospectus, 66, 79, 80, 84–85, 142 PRS Group, 565, 567 Public Bank, 897 purchased funds, 174–176, 210, 239–242, 258, 317, 319, 322, 326, 505, 511, 514–515, 527, 529, 531, 542, 546–547 qualified opinion, 68–71 quasi-liquid assets, 78, 164, 226–228, 256, 506, 521, 523, 525–526, 540–541, 544, 548, 700 919 Radelet, S., 845 Rajan, R.G., 842 Ramos, Roy I., 81, 897 rating agency, 17, 31, 35, 39–43, 45, 47–49, 50, 53, 55–57, 64–69, 71–74, 77, 79–80, 82–84, 92, 151, 292, 294, 333, 374, 402, 405–406, 409, 414, 418, 426, 427, 429, 432, 438–439, 444, 450, 484, 487, 497, 505, 520, 537–538, 542, 548, 555, 565, 570, 631–632, 641, 689, 702–708, 719, 720, 737, 764, 771, 775, 779, 795, 815, 821, 843, 869 rating model (ing), 683, 708, 821 Reagan, Ronald, 812, 842 real-estate (property) lending, 98, 151, 173, 235, 237, 323, 396, 400–401, 408, 737–738, 774, 779 recurring earnings power (REP), 292, 310–313, 335 prudential regulation, 288, 314, 359, 363, 370, 378–379, 387, 418, 437, 453, 468, 525, 534, 536, 545, 547, 637, 718, 721, 723, 728–730, 733–736, 742, 748, 755, 758, 774, 777, 793, 796, 801, 841, 845, 850, 852, 857, 863, 875–877, 887, 896, 904 regulatory filing, 66, 79–80, 255 regulatory forbearance, 349, 376, 874–878, 896–897, 903 Reid, Alan F., 487, 544 Reidhill, Jack, 841, 862, 901 Reinhart, Carmen, 799, 801, 821–822, 824–825, 827, 832, 837, 840, 844–846 related party lending, 32, 340, 400, 405, 408, 414, 730, 735, 738, 742, 875, 904 repurchase agreement, 31, 46, 120, 122–123, 138, 170, 175, 218, 224–225, 242, 257, 259, 489, 507, 514, 542, 548 Reserve Bank of Australia, 785, 834, 842 reserve ratio, 316, 599–600, 603–605, 637 920 reserve requirement, 298, 300, 415, 535, 600, 603, 636–637, 728, 735–736, 738, 746, 748, 776, 877 entry barrier, 733, 735, 775, 897 restructured loan, 77, 328, 343–344, 355–357, 369, 372, 376, 381, 383–385, 393, 413 retail deposits, 34, 88, 140, 149, 178, 239–241, 352, 436, 455, 493–494, 511, 529, 534, 546, 548, 699–700, 726, 749–750, 779, 782, 857, 860, 902 revaluation reserves, 329, 472–474 Risk accounting risk, 263 country risk, 5, 40, 46–47, 63, 82, 332, 369, 541, 551, 553, 555–556, 566–567, 630–631, 633, 639, 644, 665 political risk, 47, 137, 553, 558, 561–563, 565–566, 568, 631–633, 665–666, 710 credit spread risk, 659–660, 666 settlement risk, 4, 30, 46, 57, 130, 661–662, 666, 712 operational risk, 33, 40, 407, 482, 491, 566, 642, 644, 647, 650, 654, 656, 661, 663–667, 670, 678, 684–687, 689–692, 710–715, 721 counterparty risk, 133, 134, 248, 474, 659, 662, 666, 683, 707, 715, 736, 802 event risk, 33, 655, 665, 712, 796 reputation risk, 665–666 call risk, 111, 151 liquidity risk, 40, 151, 267, 319, 493, 496, 499, 501–502, 505, 515, 528–529, 534–535, 537, 544, 642, 647, 650, 654–655, 666–667, 669–670, 687, 709–713, 721, 741, 773, 777, 824–825 extension risk, 111 legal risk, 5, 12, 33, 404, 662, 665–666, 710, 712 pre-payment risk, 111, 151, 517, 658–659, 666, 668 rating migration risk, 16, 17, 55, 659–660, 666, 683, 711 INDEX systemic risk, 5, 25, 47–48, 61, 63, 132, 433, 551, 553–555, 626, 631, 639, 643, 661, 665–666, 719, 721, 723–724, 726, 731, 745, 749, 751, 754, 764, 772–776, 786, 820–821, 835, 839–840, 843–844, 850 interest rate risk, 117–118, 120, 134, 252, 514, 535, 613, 649, 654, 657–659, 666, 668–671, 710, 711, 713 risk mitigation, 6, 54, 347, 433, 610, 643–644, 664, 669, 682, 684 risk modeling, 16, 48, 565, 639, 670, 681, 757–758 risk profile, 26, 47, 62, 117, 235, 269, 289, 317, 326, 334, 337, 349, 353, 394, 416, 418, 477, 498, 504, 552, 565, 568–569, 607, 643, 645, 686–688, 803 risk-weighted asset, 77, 289–290, 292, 294, 335, 465, 470, 474, 478, 521, 697, 772, 779, 825 Robert Morris Associates, 395, 544, 551, 631 Rodrik, D., 845 Rogers, Jim, 1, 29 Rogoff, Kenneth S., 824, 844 Rose, Andrew, 631, 834 Rose, Peter S., 258, 631 Rothbard, Murray, 367, 411 Saal, Matthew I., 839, 841 Santomero, Anthony M., 898, 899 Saurina, Jesús, 845 Savings & Loans, 153, 543, 608, 657, 762–763, 813–814, 842, 878 savings rate, 419, 628–630 SBC Warburg Dillon, 709 Scarff, A., 777 Schachter, Barry, 667, 701 Scholes, Myron, 131, 247, 649, 681 Schumpeter, Joseph, 411 Schwartz, William, 487, 544 scorecard, 420, 428, 440, 445, 559, 565, 820 scoring, 19, 38, 42, 44, 59, 62, 81–82, 150, 421, 438–439, 441–442, 633, 683, 702, 707–708 SEC, 393, 506 Index secured (or unsecured) creditors, 6, 30, 353, 356 secured (or unsecured) lending, 9, 43, 263, 323, 514, 738 Securities securities available for sale, 170, 173, 180, 186–187, 218–219, 224, 226, 229–234, 257, 489 securities brokerage, 23, 138, 140, 143–145, 442, 467, 732, 734, 763 securities held-to-maturity, 119–120, 170, 173, 218–219, 226, 229–230, 232–233, 257, 331, 489, 507, 546, 668 securities lending, 9, 31, 120, 123, 512, 684, 764 securities portfolio, 117, 229, 231–234, 246, 331, 409, 655 securities trading, 180, 185, 230, 424, 684, 777 securitization, 96, 108–113, 151–152, 211, 218, 234, 316, 331, 490, 508, 516–518, 547, 650, 684, 760, 783 Seiz, Andrew, vii sell-side, 40, 42, 49, 426 Shakespeare, William, 209 Shen, C.H., 844 Shin, Hwan, 820, 844 Shleifer, Andrei, 779 Siemens Bank (Munich), 544 Simonson, Donald, 32, 412 Sinclair, Peter, 841, 862, 901 Smith, Adam, 37, 429, 447, 691 Smith, Terry, 155, 207 Snell, William M., 635 social policy, 417, 721, 728, 730, 745, 748, 777–778, 796, 838 solicited rating, 426 Solow, Robert, 897, 898 Sondhi, Ashwinpaul, 210 Soros, George, 29 sovereign ceiling, 518, 547, 556–557, 632 specific provisions, 194, 213, 332, 363–366, 411, 740, 755, 896 stable deposits, 504, 510, 524, 528 stakeholders, 419, 429–430, 432–435, 437–438, 442–443, 447, 643, 795, 864–865, 867–868 921 Standard&Poor’s, 27, 40, 49, 66, 294–295, 429, 446, 558, 593–594, 631–632, 689, 703, 815 standby letter of credit (L/C), 126, 129, 247, 684 state spending, 589–590 state-owned bank, 73, 289, 333, 454, 512, 632, 747, 767–769 state-owned enterprise, 34, 395, 398, 746, 869 Stewart, James, 493 Stiglitz, Joseph E., 845 Stimpson, David, 408 stress test, 670, 682, 697–698, 715 structured finance, 43, 46, 48, 82, 683 Stubing, Darren, vii, 709 Subnational, 18, 43, 47, 121, 395, 507–508, 572, 625, 633, 661, 747, 771 subordinated debt, 77, 243, 258, 456, 461–462, 471–475, 478, 481, 486, 489, 516, 521, 530, 532, 671, 787 Suharto, 889 Sumitomo Corporation, 710 Swedish Riksbank, 859 syndicated loan, 80, 96, 106–107, 142, 183–184, 197, 212, 347, 513, 516, 763, 896 systematically important financial institution (SIFI), 697–698 systemic weakness, 792–794 Taleb, Nassim Nicholas, 545, 678–679, 714 Tan, C.S., 778 Tanaka, M., 880, 901, 903, 904 Tatom, John A., 546 taxation, 76–77, 144, 167, 169, 173–174, 194, 196, 198–200, 212–213, 235, 239–240, 243, 255, 276, 288, 291–292, 315, 321–322, 326, 327, 329, 333, 335, 356, 366, 387, 413, 462, 474, 476, 487–488, 499, 568, 587–590, 592, 639, 664, 666, 696, 720, 737, 740, 742, 746, 748, 777, 795, 830, 856–857, 869, 874, 876, 878–879, 903 922 Taylor, M.W., 778 Ten, Joy, 837 tenor, 5, 24, 34, 39, 46, 96, 102–103, 220, 394, 486, 518, 611, 670, 722 Thatcher, Margaret, 842 Theodore, Sam, 484 Thirwall, A.P., 256 Thomson BankWatch (also Thomson Financial BankWatch), vi, 333, 374–375, 520, 546, 704–705, 737, 795, 907 Thornton, Henry, 901 Ti, Bradford, 256 time horizon, 24, 119, 525, 714, 820, 824, 826, 844 too big to fail, 25, 423, 499, 534, 548, 698, 717, 726, 762, 770, 782, 868, 873, 904 too small to fail, 25, 770 total-return swap (TRS), 136–138 toxic asset, 881–882 Tracy, John A., 84 trade policy, 569, 586–588, 591, 596, 615, 631 trading book, 119, 475, 668, 682, 684, 695–696, 713 treasury bills, 119–122, 209–210, 226, 228, 464, 514, 524, 591, 609, 612–613, 741 treasury operations, 94–95, 98, 116–120, 129, 134, 147, 150, 209–210, 219, 225–228, 232–233, 252, 255, 257, 307, 322–323, 326, 464, 471, 474, 503, 534, 538, 642, 652, 682, 705 Truong, Steven M., 93, 638 Tsuru, Kotaro, 777 Turner, Philip, 778, 821, 872, 902 Twain, Mark, 494 underwriting, 106–107, 138–143, 181, 183, 211, 231, 704, 794, 807 unsecured, 5, 6, 19, 30, 34, 46, 96–97, 112–113, 121, 152, 289, 323–353, 355–356, 414, 474, 537, 546, 699, 738, 861, 892, 904 INDEX unsolicited rating, 67, 84, 426, 703 US GAAP, 170, 202, 206, 224, 230, 238–239, 241–242, 257, 328–329, 743 Valdes, R.O., 801, 840 Valencia, Fabian, 811, 841 value-a-risk (VaR), 251, 259, 502, 667–668, 674–675, 677–679, 681, 687, 710, 713–715 Valukas, A.R., 548 Van Agtmael, Antoine, 33 Van Landschoot, Astrid, 638 Vandenbroucke, Patrick, 639 Vander Vennet, Rudi, 638 Velasco A., 801, 840, 845 Vihriälä, Vesa, 777 Viniar, David, 680 volatility, 83, 133, 146, 189, 251, 263, 268, 324, 496, 503, 516, 546, 549, 577, 615, 651, 674–677, 687, 710, 713–715, 814, 829, 840 Von Mises, Ludwig, 411 Walker, Jim, 411, 818 Walsh, Carl, 634 Warburg Dillon Read, 757 warehouse banking, 711, 733 Washington Mutual, 810 Watson, Tony, vii Waxman, Marjory, 850, 855, 898, 899 Weil, D.N., 633 Whalen, G., 835 White, Gerald I., 210 wholesale funding, 174, 242, 258, 455, 505, 511–512, 516, 528, 532, 540, 547, 650, 655, 659, 668, 783, 860 Wigle R., 775 willingness to pay, 1, 2, 5, 7–11, 14, 16, 32, 557–558 Wilmott, Paul, 714 Wolff, Guntram B., 638 Wood, Damien, vii Woodson, Carter, 209 Woodward, G Thomas, 544 923 Index workout, 150, 344, 355, 405, 682, 851–852, 883–885, 888, 893–896 World Bank, 14, 33, 145, 447, 494, 625, 627, 639, 721, 726, 746–747, 755, 757, 775, 779, 784, 813, 819, 834, 837, 841–842, 847, 855–856, 863, 897–900 World Bank Development Research Group, 757 World Bank Institute, 757 Worldwide Governance Indicators (WGI), 757 Worrell, Delisle, 838 write-off, 194–195, 271, 300, 325, 331–332, 341, 344, 354–355, 358, 363–364, 376–377, 387–389, 391, 393, 405, 412–413, 462, 466, 736–737, 740, 776–777, 857, 863 Yeager, T.J., 824, 844 yield curve, 27, 91, 178, 211, 317, 556, 570, 580–581, 587, 596, 605, 609–615, 637, 710–711, 713 Zielinski, Robert, 56, 83, 837 ... À0.30 Rwanda Maldives Colombia China Bosnia–Herzegovina Belize Serbia Moldova Uganda Senegal Mongolia Albania Mali Armenia Guyana Vietnam Zambia Swaziland Jamaica Mozambique Tanzania Gambia Gabon... 10 THE BANK CREDIT ANALYSIS HANDBOOK individuals to decide whether to extend or to repay a debt, and manuals on banking and credit analysis as a rule make some mention of the importance of taking... Zealand Luxembourg Netherlands Austria Canada Switzerland Australia United Kingdom Ireland Greenland Singapore Iceland Germany Liechtenstein United States Hong Kong Sar, China France Malta Anguilla