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|Other Titles: ||The function of asset management company and the evaluation of non-performing loans|
|Authors: ||林佳慶;Lin, Chia-ching|
|Keywords: ||資產管理公司;不良資產;Asset Management Company (AMC);Non-performing Loans (NPLs)|
|Issue Date: ||2010-01-11 01:28:39 (UTC+8)|
Established in 1933, Federal Deposit Insurance Corporation (FDIC) created by an amendment of the Federal Reserve Act. Capital necessary to establish the FDIC was to be provided by the United States Treasury and the 12 Federal Reserve Banks.
Resolution of financial crisis did not really begin until February 6, 1989, The Resolution Trust Corporation (RTC) was created by Enforcement Act of 1989 (FIRREA). In accordance with the FIRREA, RTC has to resolve the failure institution within 5 years, under the pressure of time frame the RTC has to use the outsourcing vehicles instead of hiring lots of employees. Some of the vehicles are called service-companies but some of the vehicles are called “asset management companies (AMCs)”. The vehicles to resolve the problems of failed bank can be described as the origination of AMC industry. Since with finance crisis globalized from Mexico to Asia, the AMC brought its know-how and knowledge set up branch-offices from Mexico to Asia as well. The AMC industry was born less than 20 years old since 1990s.
During the proceeding of NPL transaction, there are large bid-offer price gaps between banks and distressed-debt buyers. The reasons for the transaction failure between banks and AMCs can be classified into the internal and external factors. Internal factors such as psychology of the employees of banks, information asymmetry of the buyer AMCs, and the differences in the pricing valuation basis between banks and AMCs, all of the factors can be improved by both parties. But only the external factor--the impact legal environment and procedure to asset evaluation is not able to be solved by both parties. The example in Chapter 4 indicates that the legal environment and procedure is the most important factor impacted the asset evaluation. The results is the same with the conclusion of Klingebiel (2000) and Ingves, Seelig, and He (2004), to have adequate bankruptcy and foreclosure laws and legal environment is important to AMCs business.
We also want to make some recommendation to government as follows:
1. Improving the jurisdiction system. Efficiency in bankruptcies will enhance the potential recovery value to AMCs, reversely add the value to the bank assets.
2. If a bank and an AMC measure the present value of a company identically, then whoever can add more value through time saving in the waiting of foreclosure process should bid higher. The authority division also can refer to the Bank of Japan start to request the use the discounted cash flow (DCF) approach in the non-performing loan asset, which will also help the banks to realize the net value of the assets at the early stage.
|Appears in Collections:||[國際企業學系暨研究所] 學位論文|
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