Collateral Agreements Research Articles

Significance of Spousal Consent in a Loan Agreement as The Enforcement of Joint Asset Provisio

Joint asset causes legal consequences in entering into a loan agreement and its accessor, collateral agreement. These legal consequences shall arise as spousal consent is necessary in entering into such agreement. However, many collateral agreements are arranged without a spousal consent. The purpose of this writing to find out the legal consequences of collateral agreements which are entered into only by one of the parties, husband or wife, over the joint assets and responsibility(s) of the Notary Public and Land Deed Official Certifier (“Pejabat Pembuat Akta Tanah/ PPAT”) regarding the agreement. This study utilizes normative juridical approach which was carried out by examining data from legal norms in the society, including laws and regulations. Based on its characteristic, this research is a descriptive study. The result of this study is agreement remains binding on the joint asset despite the collateral agreement being entered into without spousal consent. Meanwhile, the responsibility of the Notary Public and PPAT if they are proven to neglect their obligation is considered unlawfulacts.

Eksistensi Jaminan Hak Tanggungan Sebagai Jaminan Cross Collateral

The freedom to impose more than one mortgage as stated in Article 5 of the Mortgage Right Act is a gap in the misconception of guarantee execution. The existence of more than one debtor or more than one creditor but still on the same collateral motorcycle taxi requires a strict application of clauses in the agreement.The purpose of this study is to examine the existence of mortgage rights as cross-collateral guarantees. This research was carried out in a normative juridical manner, using library data as secondary data for the study of rules and norms in law. The conclusion obtained from this study is that the imposition of mortgage rights can be carried out through two series of activities, namely the granting of mortgage rights and registration of mortgage rights. The freedom to be burdened with more than one mortgage to guarantee more than one debt is waived by Article 5 UUHT. The history of recording more than one mortgage will be recorded on the Mortgage Certificate (SHT) with the mention of the first/second/third rank and so on. The execution of mortgage rights can be carried out by Article 20 UUHT, namely based on the execution parate in Article 6 UUHT, Based on the executorial title in Article 14 and voluntary sale by agreement of both parties Article 20 paragraph (2). Execution constraints are still encountered in practice, especially in the imposition of more than one mortgage. The meaning of the priority principle is a misconception of the appropriate agency. In order to minimize execution constraints, the use of the cross-collateral clause is a way for the application of the creditor prudence principle. The use of cross-collateral which is equipped with cross-default and confirmed in the collateral agreement for collateral registration is then carried out.

The Criminal Liability of Bank-Affiliated Notaries for the Confidentiality Principle of Banks in Connection with Deposit Collateral Agreements

This research focuses on the criminal liability of notaries affiliated with banking institutions for the guarantee binding act in the form of a deposit connected to the principle of bank secrecy in Indonesia. Through the analysis of relevant laws, including Bank Indonesia Regulation No. 2 of 2000, Notary Position Law, and Bank Confidentiality Law, the study aims to answer two research questions: the form of criminal liability of notaries affiliated with banking institutions for the guarantee binding act and the ideal concept of criminal liability. The findings suggest that notaries who breach the principle of bank secrecy can face criminal charges, and the ideal concept of criminal liability should balance the interests of customers and banking institutions while maintaining bank secrecy and customer privacy. The study's implications call for clear guidelines and regulations for notaries' responsibilities in guaranteeing binding acts related to deposits and penalties for notaries who violate the principle of bank secrecy.

Making Sense of Anything thru Analytics: Employees Provident Fund (EPF)

Employees Provident Fund (EPF) has always been a hot topic, from the previous Government permitted “withdrawals” during the pandemic to the present Government disallowing further withdrawals (afraid it would lead to a financial crisis) and allowing emergency loans through an EPF collateral agreement. The latter used median studies to “contribute” MYR 500 to EPF members with less than RM 10,000 in their accounts. Baffled/bewildered by the current Government’s generosity and highlighted in this paper, I used Monte Carlo simulation, a method used by analysts when determining the size of a client’s portfolio to support their desired retirement lifestyle, to establish a reference-type table displaying ideal savings when reaching 50. The Government could use the table mentioned above to give more meaningful contributions to EPF members, apart from EPF active and inactive members, knowing where they stand concerning their current EPF savings.

The Private Contract in Transportation of Cargo by Railway: the Problem of Terminological Definition

The author explores legal nature of rail haulage contracts. There is an analysis of the use of private law principles when governing rail transportation relations. The article explores the interrelation between transportation statutes and codes, Rules of Carriage and haulage contract in the context of scope of control over haulage relations. There is justification of the necessity to differentiate haulage contracts and other collateral agreements and to make their legal connection. Proposals are formed to make amendments to the Statute of Railway Transportation of the Russian Federation aimed at legal entrenchment of the civil regulation model for haulage contracts.

THE URGENCY OF MORTGAGE AGREEMENT AS AN EFFORT TO REALIZE THE TRUST BY BANK AS CREDITOR

This study focuses on the legal certainty of the implementation of loans for mortgage rights which are the object of collateral in the form of money-valued objects when bad loan occurs, which are regulated in the main agreement as an effort to manifest the trust of creditors of banking institutions whose existence is highly sought after by the Indonesian people. The method used in this study focuses on the normative with the conceptual approach and statute approach. The results of this study indicate that Credit agreements must be considered by the bank as creditor and by the customer as the debtor, considering that credit agreements have a vital function in granting, managing, and managing the credit itself. The existence of a guarantee in a bank credit agreement is significant, namely as a means of legal protection for bank security in overcoming risks. There is a certainty that the debtor customer will pay off his loan. This is based on the explanation of Banking Laws, PBI, and POJK, which requires banks' caution as creditors for loans to debtors based on the belief in the debtor's ability to pay off his obligations as agreed in the agreement. The land is material security which is most in demand by banking institutions as security of mortgage rights. The use of land as a trusted and consumptive credit is based on the consideration of the safest land and has a relatively high sale value. The urgency of objects Securing mortgage rights as stipulated in the credit agreement cannot be separated from the guarantee itself. Credit guarantees are always stated in an additional agreement, namely the Collateral agreement. The need for funds by people or institutions provides credit by providing excellent services and providing legal protection for the parties in the transaction so that no one is harmed in the transaction. The state provides legal protection by stipulating legal regulation relating to credit so that banks as creditors have legal certainty in the process of executing credit collateral objects for optimal repayment. Mortgage Law states that creditors have full rights in executing debtor's collateral goods when bad loans do not have to go through litigation.

Tanggung Jawab Pihak Asuransi Terhadap Perjanjian Kredit Bank Dalam Hal Debitur Meninggal Dunia

Credit agreements are usually accompanied by a collateral agreement and an insurance agreement. This insurance agreement is a means of transferring risk for the bank, especially life insurance in the event of a debtor's death, besides credit can also fall to the heirs if the debtor dies before paying off the remaining credit. This study aims to analyze the legal consequences of the Bank's Credit Agreement in the event that the Debtor dies and to find out the responsibility of the Insurance Party for the Bank's Credit Agreement in the event the Debtor dies. This study uses a normative research method with a statutory approach and a conceptual approach. The results show that the legal consequence of the credit agreement in the event that the debtor dies, there are two possibilities, namely that the credit goes to the heirs as regulated in article 833 of the Civil Code (Burgerlijk Wetboek) or the guarantee is executed by the bank, and the second possibility is that the credit is written off due to a life insurance clause or a life insurance agreement with a banker's clause, which means that the insurance company must be responsible for paying off the remaining debts of the debtor who died according to the terms and conditions of the policy, otherwise the interested party can file a summons to sue the insurance company. From this, the conclusion is that the parties must fully understand the contents of the credit agreement made, so that later if this risk occurs, there will be clarity on the payment of the debtor's remaining debt.

GUARANTEE BENEFIT FOR CREDITOR AND CREDIT RECONSTRUCTION EFFORT DURING COVID-19 PANDEMIC

Guarantee begins with the debtor credit agreement that followed with the handover of the object guarantee by debtor to creditor, where the creditors are banks. If referred in the regulation article 1 point 2 of Constitution No. 10/1998 concerning on banking stated that bank is a business entity that raised fund from citizen in the form of deposits and channeling them to the public in the form of credit and/or in other forms in order to improve the lives of many people. Bank has the important role in economic, because one of its function is giving the credit to citizen and helping the micro, small and medium enterprises. This given credit must be accompanied by collateral or collateral provisions from the debtor because it was one of the precautionary principal from Bank, and also with the efforts to protect the creditor at any time the debtor defaults. The covid-19 pandemic outbreak that had a profound impact on the entire life of society was also influence d the problem of credit and guarantee. The collateral agreement which is an accessoire agreement (follow-up or accompanying) follows the main or principal agreement, that is preceded by a credit agreement (debt agreement), including on what if there is bad credit and what efforts should be done by the Bank so that it does not experience even greater losses. For this reason, the writer is very interested, to find out the extent of the benefits of the collateral object for creditors as well as credit restructuring efforts during the Covid-19 pandemic.

Legal Risk Mitigations on Trademark Rights as Bank Guarantee Credit

Credit problem and even bad credit are a problem for banks, because the existence of credit problem is not only decrease the bank incomes but decrease the profit. This research has a purpose to examine the risk mitigation on object guarantee in form of trademark rights which conducted by bank. The method used here is normative method by statutory and conceptual approach. This research used Burgerlijk Wetboek (BW), the Constitutions Number 20/2016 about Brands and Geographic indication, the Constitution of Banks, The Constitution Number 42/1999 about the Fiduciary Guarantee and Implementing the Regulation as legal material, and books, journal, research report, and article as secondary material. The result of this analysis showed that guarantee as bank effort to ward off legal risk such as weakness of the alliance until not fulfilled the contractual terms or not perfect of collateral binding even the cancellation of the brand certificate. Based on the result, this research concluded that bank have to anticipate legal risk which possible appeared from a brand, such as binding of principal agreement that which does not fulfill the conditions of the validity of the agreement or the collateral agreement which is not perfect the binding, even on the brand certificates is possibly to be cancelled.

Cross Currency Valuation and Hedging in the Multiple Curve Framework

We generalize the results of Bielecki and Rutkowski (2015) on funding and collateralization to a multi-currency framework and link their results with those of Piterbarg (2012), Moreni and Pallavicini (2017), and Fuji et al (2010). In doing this, we provide a complete study of absence of arbitrage in a multi-currency market where, in each single monetary area, multiple interest rates coexist. We first characterize absence of arbitrage in the case without collateral. After that we study collateralization schemes in a very general situation: the cash flows of the contingent claim and those associated to the collateral agreement can be specified in any currency. We study both segregation and rehypothecation and allow for cash and risky collateral in arbitrary currency specifications. Absence of arbitrage and pricing in the presence of collateral are discussed under all possible combinations of conventions. Our work provides a reference for the analysis of wealth dynamics, we also provide valuation formulas that are a useful foundation for cross-currency curve construction techniques. Our framework provides also a solid foundation for the construction of multi-currency simulation models for the generation of exposure profiles in the context of xVA calculations.

ASPEK AGUNAN SEBAGAI PERLINDUNGAN HUKUM BAGI BANK SELAKU PENYEDIA LAYANAN KREDIT ONLINE

The implementation of lending and borrowing money or credit in general requires an additional agreement in the form of a guarantee agreement for the safety of the loan. Debt guarantees are giving confidence to creditors over the payment of debts they have given to debtors, this is due to the law or the issuance of an agreement that is assessoir of the principal agreement. Regarding the nature of the collateral agreement is the assessoir, that agreement follows the principal collateral in the form of a debt or credit agreement. The type of debt collateral can be in the form of material collateral which will give rise to material rights or individual collateral, commonly referred to as borgtocht which will give rise to individual rights as stated in Article 1820 BW. In general, creditors choose to use a material security, because by holding a material security the creditor's position will become the preferred creditor and the material rights over the guarantee will be transferred to the creditor who will give the right to receive debt payments in advance of the execution of collateral objects. In contrast to individual guarantees that only give rise to individual rights and can only be defended to the party making the agreement. However, if credit is done online with electronic mechanisms, how can collateral that can convince and protect creditors as the provider of online credit facilities

No Fear of Discounting - How to Manage the Transition from EONIA to €STR

An important step in the Financial Benchmarks Reform was taken on 13th September 2018, when the ECB Working Group on Euro Risk-Free Rates recommended the Euro Short-Term Rate €STR as the new benchmark rate for the euro area, to replace the Euro OverNight Index Average (EONIA) which will be discontinued at the end of 2021. This transition has a number of important consequences on financial instruments, OTC derivatives in particular. In this paper we show in detail how the switch from EONIA to €STR affects the pricing of OIS, IRS and XVAs. We conclude that the adoption of the clean discounting approach recommended by the ECB [2], based on €STR only, is theoretically sound and leads to very limited impacts on financial valuations. This finding ensures the possibility, for the financial industry, to switch all EUR OTC derivatives, either cleared with Central Counterparties, or subject to bilateral collateral agreements, or non-collateralised, in a safe and consistent manner. The transition to such EONIA-free pricing framework is essential for the complete elimination of EONIA before its discontinuation scheduled on 31st December 2021.

SOFR and €STR Discounting: Forward Convexity from Discount-Rate Transition

Due the the upcoming change in price alignment interest that is anticipated for SOFR and €STR, a new definition of the hybrid risk-neutral measure is developed, which is based on continuous reinvestment at the price alignment interest rate. A corresponding T-forward measure is defined, which is consistent with the treatment of cashflow obligations including bond prices and terminal payouts. Values obtained under the hybrid measure remain unchanged when combined with explicit modeling of the compensation payout at the transition time, in addition to describing any MTM change for uncompensated positions. This new measure also allows continuous construction of the forward curve in a way that is convexity-free up to and beyond the discounting transition, whereas the original pricing measure will see a sudden impact on the forward curve at the transition point. Lastly the hybrid measure provides a framework to model the forward curve convexity for trades with collateral agreements that do not transition simultaneously across different netting sets.

Status of Waqf Properties As Debt’s Collateral

The lack of understanding on land waqf creates many issues related to waqf itself, i.e. offers endowed land as deb’ts collateral. In Article 40 alphabeth (a) Law Number 41 Year 2004 on Waqf, there is prohibition to include waqf properties as collateral. Waqf properties’ status change that inchorent with Law Number 41 Year 2004 on Waqf, one of it is including land waqf as debt’s collateral will cause unwanted consequence on the collateral agreement itself. In fact, there are still violations on Article 40 alphabeth (a) Law Number 41 Year 2004 on Waqf. These situations are caused by minimum awareness on management of waqf properties from nadzir, heirs and bank as the creditor towards implementation of waqf properties’ status change. Therefore, consequence of waqf properties’ status change that violates Article 40 alphabeth (a) Law Number 41 Year 2004 on Waqf will not immediately null and void; however, debt’s repayment still needs to be fulfilled by debtor corresponds with Article 1131 BW. It required efforts to minimize issues on waqf through socialization of waqf towards nadzir, heirs, bank as creditor and wide community, especially waqf properties’ status change so there will not be any issues on implementation and management of waqf properties in the future.

Optimální způsob sjednání derivátu za přítomnosti rizika protistrany

The paper deals with the optimal strategy for entering a derivative contract under existence of counterparty credit risk. Derivative contracts can be traded in three ways - bilaterally without any collateral agreement, bilaterally with collateral agreement or through a central counterparty. Our goal is to define rules for determining the most efficient way of trading. We take into account credit value adjustment, funding costs and capital costs related to regulatory requirements. In our empirical research, we focus on interest rate swaps with different maturities, specifically we analyse the impact of own and counterparty credit spreads on the overall costs. The results show higher efficiency of central clearing for investors with high creditworthiness. The costs of central clearing are very sensitive with respect to own credit spread and, therefore, the final decision depends on the actual relation with counterparty spread.

AN EQUILIBRIUM MODEL FOR AN OTC DERIVATIVE MARKET UNDER A COUNTERPARTY RISK CONSTRAINT

In this study, we develop an equilibrium pricing model for an option contract with a counterparty risk, a collateral agreement, a counterparty risk constraint, and a threshold. Since we consider the option market to be an example of the derivatives market, we suppose that the buyer of an option has only countertparty risk of a seller defaulting. In addition, we consider a model where the buyer is allowed to enter into an option contract within an allocated amount of risk capital for counterparty risk, and requires (cash) collateral to the seller if the exposure exceeds the threshold. The counterparty risk is measured as a credit valuation adjustment. We provide an equilibrium pricing rule and an equilibrium volume formula by solving participants’ static utility-maximization problems. Based on numerical simulations, we verify the mechanisms through which collateralization, risk capital, and the threshold affect the size of the over-the-counter (OTC) option market. Finally, we analyze the influence of the buyer’s risk-aversion on the market, without collateralization. The results imply that the risk constraint might be a proxy for an investor’s attitude towards risk.

Country Effects on Managerial Practices in Transportation Area: Evidence from Russia and Germany

The competitiveness of individual companies is related not only to their own characteristics, but also to the institutional and economic characteristics of the home countries of these companies. How the business environments of countries affect the results of applying management practices in different companies is a complex research issue, as managerial practices have many characteristics. Nevertheless, Russian enterprises have to use new technologies to increase competitiveness in the world market. We analysed both the sector of transportation where geographic closeness is a key indicator of competition, and transportation facilities where incremental costs and savings can be implemented to build variables of the market structures. The research sample includes 210 specialized logistic firms with variation of ownership structure and collateral agreements. We have examined firms in two markets: Russian and German ones. The analysis is based on the data from 7 Russian regions, and 6 German federal states. We have found that the quality of managerial practices — estimated by using a new survey instrument — is strongly linked with commercial ratios such as a rate of fail to deliver and a rate of consumer satisfaction. A high level of competitiveness is demonstrated by a greater number of companies in the same region. We have found that this is positively correlated with increased quality of managerial capabilities. This correlation is reinforced when we quantify the number of local firms with local logistic infrastructure. This paper reveals that the increasing the effectiveness of managerial practices are due to the characteristics of the country of origin. The results allow to develop recommendations for policy-makers to improve the business environment.

A New Model for Pricing Collateralized Financial Derivatives

This paper presents a new model for pricing financial derivatives subject to collateralization. It allows for collateral arrangements adhering to bankruptcy laws. As such, the model can back out the market price of a collateralized contract. This framework is very useful for valuing outstanding derivatives. Using a unique dataset, we find empirical evidence that credit risk alone is not overly important in determining credit-related spreads. Only accounting for both collateral posting and credit risk can sufficiently explain unsecured credit costs. This finding suggests that failure to properly account for collateralization may result in significant mispricing of derivatives. We also empirically gauge the impact of collateral agreements on risk measurements. Our findings indicate that there are important interactions between market and credit risk.

LEGAL PROTECTION FOR NEW CREDITORS IN THE IMPLEMENTION OF CREDIT TAKEOVER WITH MORTGAGE GUARANTEE

<p align="center"><strong>ABSTRACT</strong></p><p>This research aimed to identify and analyze legal protection for new creditors in the takeover of credit with mortgage guarantee. Type of Research is a normative legal research or an equation with doctrinal research. The results of this research shows that the implementation of the credit take over with collateral mortgage starting from the loan application by the debtor and all the completeness of the terms of credit application, to do a survey to customers. If it is eligible, then continuing to make a credit proposal in which will be submitted to a credit comitee. If it is approved then continued with the credit agreement and collateral agreement that are required to bring the debtor. Then the bank employees accompany the debt to the former creditor, to make payment with funds obtained from third party to make payment with funds obtained from third party. If the repayment has been done, required to request full payment slip and genuine proof of guarantee ownership, then they can be burden by mortgage, roya has to be done first. The transfer mechanism of mortgage in credit takeover is too risky for a new creditor if the Roya’s mail can not be published on the same day. So that way is provide less certainty and legal protection for the new creditors.</p><p><strong>Keywords: creditor, legal protection, takeover, mortgage</strong></p>

Die Moontlike Regshervorming van die Integrasiereël in die Suid-Afrikaanse Kontraktereg deur middel van die Leerstuk van Rektifikasie

As far back as the early twentieth century the Appellate Division in Cassiem v Standard Bank of SA Ltd, held that:
 “We are bound by the English rules of evidence and the question has therefore to be decided according to English law, the rule being that parol evidence is not allowed to alter, vary, or contradict a written instrument.”
 The integration rule has always been an integral part of the South African law of contract where the admissibility of the presentation of extrinsic evidence of previous or collateral agreements was considered. In 1998 an extensive report was brought out by the South African Law Commission wherein certain recommendations were made to the Minister of Justice pertaining to, inter alia, the application of the integration rule in the South African law of contract. The Law Commission was of the opinion that the disadvantages of the integration rule outweighed the advantages of legal certainty and finality and recoomended that the rule be abolished and that more subjective evidence should be allowed to ascertain the true intention of the parties. The recommendations by the Law Commission however apparently died a slow death and there has been no attempt since to abolish or modify the rule in the South African legal system.
 In 'n previous article the view was held that the integration rule is based on a legal rule or legal fiction and that it can therefore be validly abolished or modified by legislation. Legislation is however a drastic step which should only serve as a last resort and other alternatives should first be considered. This article considers one such a possible alternative, namely the remedy of rectification. The focus will be in particular on a brief discussion of the application of the integration rule in the South African law of contract, the field of application and scope of rectification, the relation between rectification and the integration rule, and, lastly, if rectification can be utilised to avoid the strict application of the integration rule and consequently serve as an instrument for the (indirect) abolition or modification of the rule in the South-African law of contract. The conclusion is that the remedy of rectification would in all probability not in all instances be able to avoid the strict application of the integration rule and that legislation seems to be the only workable alternative to abolish or modify the integration rule in the South African law of contract.