2015 | OriginalPaper | Chapter
Effects of the Guarantees
Authors : Fabio Bassan, Carlo D. Mottura
Published in: From Saviour to Guarantor
Publisher: Palgrave Macmillan UK
Activate our intelligent search to find suitable subject content or patents.
Select sections of text to find matching patents with Artificial Intelligence. powered by
Select sections of text to find additional relevant content using AI-assisted search. powered by
The State guarantees based on valuation standards that coexist temporarily with market prices are an appropriate and adequate instrument of prudential regulation in a time of crisis. Therefore, these measures easily find a place in the progress that regulations are making in this field (e.g., Basel III for EU banks). This trend, besides, is only partially countered — for the time being in the United States — by compensatory structural regulation mechanisms (e.g., the Volker rule). Therefore, from an operational point of view, it appears relevant to investigate the EU pricing formula for State guarantees to cover bank debt, a fortiori because it requires that the fees charged for the provision of the guarantee scheme have to be ‘as close as possible to what could be considered a market price’.