Event Of Default Research Articles

Probability of default for lifetime credit loss for IFRS 9 using machine learning competing risks survival analysis models

This study introduces a machine learning competing risks survival analysis model aiming at exploring the Probability of Default component of credit risk. Due to modeling of a cumulative probability of default over time, the model is applicable to assess Lifetime Expected Credit Loss under the International Financial Reporting Standard (IFRS) 9 regulation for financial institutions. Whilst most credit models focus on the default event itself, in many loan transactions, there is a competing event affecting risk: the possibility of the borrower prepay their debt before maturity. In this case, credit risk ceases to exist. We derive a statistical model that supports handling competing risks (credit risk and prepayment risk) in a machine learning survival analysis setup. As there is no available implemented computer package or library, we build the computational algorithm with subdistribution hazards using boosting as an ensemble method and componentwise least square models as base learners. Results of the model are generated using a dataset of credit card refinancing operations of a US financial institution. We observe, comparing different survival analysis techniques, that ComponentWise Gradient Boosting (CWGB) models showed competetive performance on both scenarios (subdistribution hazards and cause-specific models) compared to benchmark models. The derived model is useful to address the guidelines of the IFRS 9 for credit risk, taking into account the context of lifetime credit exposure.

Concession contracts: analysis of the subsidiary liability of the public administration for labor debts

Management and concession contracts, of which public-private partnerships are a type, have become the most dynamic form of state action in the economy. Given the trends of today's capitalism and the official public policy announced, they should multiply, in line with the announced Growth Acceleration Program (PAC) 2023. It is expected that, in the event of default by employers, it will be inevitable to ask, in court, whether the state can be held jointly or severally liable for labor debts. Therefore, the aim of this article is to verify the extent to which public administration liability occurs in concession contracts. The methodology applied is based on the deductive method and the research is qualitative in nature, with the data source based on documentary, bibliographical and case law research. It should be noted that the majority of case law recognizes that the public administration is subsidiarily liable for the debts of so-called "management contracts", a reasoning that should be extended to the labor debts of concessionaires, including in public-private partnerships.

Legal Protection of Creditors Against Letters of Undertaking as Additional Agreements

This research aims to learn about the Legal Protection of Creditors Against Letters of Undertaking as Additional Agreements. The research method is normative juridical, using deductive thinking and library data collection. One of them is using the Legal Protection Theory to examine problems in LoUs between debtors and creditors so that debtors commit themselves to fulfilling obligations so that they get their rights by bank rules and applicable laws and regulations in the event of payment failure or default with the conclusion of preventive and repressive measures. This research found that a Letter of Undertaking (LoU) is part of an additional agreement or accessory and an alternative third-party guarantee in the form of a statement of the promissory note to fulfil an obligation made by the Debtor. In this modern and rapidly developing era, LoUs are born as credit guarantees or financing in various fields of construction projects, infrastructure projects, and tender bonds, which are used to facilitate business to help smooth national and international trade transactions.

THE IMPLEMENTATION OF MUSYARAKAH FINANCING IN ISLAMIC BANKS IN INDONESIA IN RELATION TO DEFAULTS BUSINESS PARTNERS

This research aims to analyze the implementation of musyarakah financing in Islamic banks in Indonesia related to the default of business partners. The principal banking law states that the function of banking in Indonesia is to collect and distribute funds. Islamic banking law regulates various types of financing, including musyarakah financing. The method used in this research is descriptive analytical method using qualitative approach. The results of this research discussion show that legal protection for the parties in musyarakah financing in the event of default by business partners consists of: first, legal protection provided by law, namely protected by the Banking Law, especially Articles 1, 7 and 8, second, legal protection based on musyarakah contracts/agreements, in the form of : First, if the business partner has been classified into the collectibility of bad debts, the bank can confiscate the collateral and then proceed with the auction. Second, submitting the dispute to a Islamic arbitration body or court. Meanwhile, the efforts of Islamic banks if there are indications that there will be defaults by business partners in musyarakah financing are to addendum the contract.

Risk management of stock portfolios with jumps at exogenous default events

Risk management of stock portfolios with jumps at exogenous default events

Bond yield effects of corporate bond default: Evidence from bond default events of 2014–2022

This paper conducts an event study to examine the impact of bond default events on daily bond yields following rigid payment defaults. Our results demonstrate a significant increase in abnormal returns of corporate bonds subsequent to intra-industry bond defaults. Notably, the extent of this effect varies based on credit quality and bond type. Further analyses reveal that companies of lower credit quality and unlisted are notably more affected by default events. Specifically, we find some evidence that defaults in publicly listed firms, state-owned enterprises, or medium-term notes lead to more pronounced effects on bond yields.

Eksekusi Objek Jaminan Fidusia Pasca Putusan Mahkamah Konstitusi Republik Indonesia Nomor 18/PUU-XVII/2019 JUNCTO 02/PUU-XIX/2021 (Studi Kasus Pengadilan Negeri Medan)

Fiduciary Security is a specific property guarantee granting creditors exclusive rights, including the ability to sell the collateral without a court order, known as parate execution, in the event of default. The execution of Fiduciary Security is governed by Law Number 42 of 1999 concerning Fiduciary Security, Article 15. The Constitutional Court Decision Number 18/PUU-XVII/2019 JUNCTO 02/PUU-XIX/2021 resulted from a constitutional review petition against Article 15 Paragraphs (2) and (3) of the law, leading to legal changes in the regulation and implementation of Fiduciary Security execution procedures. This study focuses on whether the decision aligns with Indonesia's legal system, the pre- and post-decision execution processes, and the legal analysis by judges at the Medan District Court. Using a normative juridical method, this research concludes that the Constitutional Court Decision provides a new interpretation of executory titles and breach of promise. Before the decision, creditors held executory titles during Fiduciary Security execution upon debtor breach, but post-decision, mutual consent between creditors and debtors is required. Challenges in implementing the decision in the Medan District Court arise from societal and cultural factors.

TINJAUAN YURIDIS TENTANG PERLINDUNGAN HUKUM KEPADA KARYAWAN TERKAIT WANPRESTASI DALAM PERJANJIAN KERJA WAKTU TERTENTU

The default case that occurred at PT Thania Indo Jaya against 2 (two) employees out of a total of 4 (four) employees with a Specific Time Work Agreement (PKWT) who was laid off due to the co-19 pandemic, namely not giving compensation rights to these employees. In this case, the Government is consistent in maintaining PKWT by issuing Perpu Number 2 of 2022 and Government Regulation Number 35 of 2021. The purpose of this study is to determine legal protection for PKWT employees at PT. Thania Indo Jaya Semarang and PKWT arrangements in laws and regulations, legal consequences in the event of default between the Company and employees. This study uses a type or type of normative juridical study. Data collection techniques are carried out through interviews, observation and documentation studies. The results of the study show that legal protection for PKWT employees at PT. Thania Indo Jaya Semarang is in the form of employment social security for employees, except for employees who are still apprentices, where employees who are still apprentices only get guarantees from the funeral service, provide work clothes and work tools, and form a P2K3 team. PT Thania Indo Jaya Semarang has committed a crime (default), so that it can be subject to a maximum imprisonment of 4 (four) years and/or a maximum fine of Rp. 400,000,000;- (four hundred million rupiah). Legal consequences if there is a default in the work agreement, which in the cancellation of the agreement is regulated in Articles 1451 and 1452 KUHP.

Implicit government guarantees, media tone and bond pricing

AbstractBy exploiting the first public bond default event in China—the Chaori bond default in 2014—we examine how implicit government guarantees shape the role of media information in bond pricing. We find an insignificant association between preissuance media tones and bond issuances’ yield spreads before the event; however, the association becomes negative and significant after the event. The role of media tone in bond pricing is more pronounced for regions with greater information demand for default risk and for media outlets with stronger information provisions toward implicit government guarantees after the event. Mechanism analyses suggest increased bond investors’ risk awareness, rather than strengthened information provisions in media tones, as the force behind the more pronounced role of media tone in bond pricing. Finally, lower yield spreads driven by more positive media tone do not suggest bond overpricing. Our study reveals the role of media tone in bond pricing and displays the evolution of the media tone's role in bond pricing due to changing institutions.

Penegakan Hukum Tindak Pidana Korupsi Ditinjau dari Teori Efektifitas Hukum

The default case that occurred at PT Thania Indo Jaya against 2 (two) employees out of a total of 4 (four) employees with a Specific Time Work Agreement (PKWT) who was laid off due to the co-19 pandemic, namely not giving compensation rights to these employees. In this case, the Government consistently maintains PKWT by issuing Perpu Number 2 of 2022 and Government Regulation Number 35 of 2021. This study aims to determine legal protection for PKWT employees at PT. Thania Indo Jaya Semarang and PKWT arrangements in laws and regulations, legal consequences in the event of default between the Company and employees. This study uses a type or type of normative juridical study. Data collection techniques are carried out through interviews, observation and documentation studies. The study results show that legal protection for PKWT employees at PT. Thania Indo Jaya Semarang is in the form of employment social security for employees, except for employees who are still apprentices, where employees who are still apprentices only get guarantees from the funeral service, provide work clothes and tools, and form a P2K3 team. PT Thania Indo Jaya Semarang has committed a crime (default), so that it can be subject to a maximum imprisonment of 4 (four) years and/or a maximum fine of Rp. 400,000,000;- (four hundred million rupiah). Legal consequences if there is a default in the work agreement, which in the cancellation of the agreement is regulated in Articles 1451 and 1452 KUHP.

PERTANGGUNGJAWABAN NOTARIS TERHADAP COVERNOTE YANG DIBUATNYA DALAM PERJANJIAN KREDIT

The use of notary covernotes in credit agreements can cause bank losses in the event of default while the process of binding mortgage rights has not been completed. This study raised two formulations of the problem, namely how the legal consequences of the use of cover notes on credit agreements? and what about the legal responsibility of Notaries related covernote in credit agreements?, using the theory of legal consequences and the theory of professional ethics of notaries. The method used in this study with this type of research juridical normative legal research literature or secondary data with sources of legal materials primary, secondary, tertiary and supported interview. The research approach used is legal approach, case approach, conceptual approach and analytical approach. Legal material collection techniques performed by identifying and intervening in the rule of Law positive, literature books, journals and other sources of legal materials. For technical analysis legal material is carried out by the interpretation of grammatical laws and methods construction of a legal analogy. The results showed that the legality of Covernote cannot be considered as an authentic deed in accordance with the authority of notary officials in making authentic deeds, because Covernote does not meet the requirements set forth in Article 1868 of the Civil Code. Covernote is not part of the law provided for in the law, it is only a practice or custom that develops in the performance of Notarial duties. The factors that encourage a notary to issue a Covernote are usually related to the unfinished work related to the duties and authority of the notary to issue an authentic deed. Covernote is used as a notification that the customer's land letters of credit application are still in the process of certification, royalty process, reverse name, or breakdown process if they have been certified. For example, in the application for a credit agreement, application for a building permit (IMB), application for a decree of the Ministry of Law and Human Rights (Kemenkumham), management of Rights applications, and others. The notary's responsibility related to the Covernote he made is related to the Supreme Court decision number 181/PDT/2019/PT MKS. The notary is responsible in the event that the Covernote is not implemented in accordance with the contents of the Covernote, and the notary may be subject to civil penalties in the form of reimbursement of costs, damages, and interest due to which the notary must pay to the party who suffered losses due to the violation. This is a form of Notarial responsibility in compensating for losses suffered by the injured party

A generalised latent Poisson factor modelling approach for default correlations in credit portfolios

Default risk is one of the major concerns for lending institutions and banking regulators. This paper focuses on the analysis of default data, using a new approach based on generalised latent Poisson factor models. In this case, the correlation structure of the default events is driven by a small number of common latent factors. Conditional to these factors, the defaults become independent and each default sequence is fitted to a generalised linear model with Poisson response and log-link function. This model provides a flexible framework for the computation of the value-at-risk and the expected shortfall of a credit portfolio. The practical implementation of the proposed local Fisher scoring estimation algorithm is illustrated by a Monte Carlo simulation study. Then, a real scenario, with default data taken from a large database provided by Standard & Poor's, is used to analyse the empirical behaviours of the different risk measures. The achieved results show promising performance.

Kredi Derecelendirme Kuruluşları, Kredi Notları ve Kredi Temerrüt Swapları Üzerine Bir Değerlendirme

Investors face different risks in international markets than in national ones. Effective risk management can help protect investors from these risks in global markets. Various indicators and financial instruments are utilized in risk management. Credit rating agencies assess the risk level of institutions or organizations in global markets and provide information to global investors. Credit rating agencies evaluate institutions or organizations by assigning credit ratings. Credit default swaps (CDS) have recently become popular hedging instruments. Credit ratings and CDS premiums are essential sources of data used to assess the risk of an institution or organization. Credit ratings indicate the investment grade of countries. CDS premiums are contracts entered into by creditors to protect themselves in the event of a borrower's default. It is argued that sovereign credit ratings and CDS premiums were misleading during the 2008 economic crisis, after which the reliability and validity of credit ratings and CDS premiums became a subject of debate. This study examined the relationship between credit ratings and CDS premiums and assessed the functionality of the system on critics.

Learning from credit default

Utilizing a unique P2P dataset, this study employs the PSM-DID method to explore the learning effect brought about by default events on investors. The findings reveal that investors who experience their first default event demonstrate an improved ability to select a higher-quality project the next time. Notably, this positive effect is more pronounced when facing substantial defaults, as opposed to cases where overdue principal and interest are eventually settled. Investors' initial confidence in defaulted projects contributes to a greater enhancement of their investment skills. Furthermore, the beneficial impacts of defaulted events diminish as investors’ investment experience accumulates.

Wrong Way Risk corrections to CVA in CIR reduced-form models

In this paper we provide an efficient methodology to compute the credit value adjustment of a European contingent claim subject to some default event concerning the issuer solvability, when the underlying and the default event are correlated. In particular, in a Black and Scholes market/CIR intensity-default model, we consider a second order expansion around the origin of a vulnerable call option with respect to a correlation parameter rho, which may be used to describe the wrong way risk of the contract, measuring the dependence between the underlying asset price and the option’s issuer default intensity. Numerical implementations of this approach are compared with the benchmark Monte Carlo simulations.

RESPONSIBILITIES OF CUSTOMERS AND ISLAMIC BANKS TO MANAGE AND RECOVER NON-PERFORMING FINANCING

This paper is to study the responsibilities of the customers and Islamic banks in managing the non-performing financing in Malaysia. This research is also to examine the provisions of the facility agreement by three different Islamic banks to analyze the treatment of non-performing financing by the banks. The researcher employs qualitative methodology whereby this study is based on analysis of primary data from an interview with representative of Bank A to determine the mechanism used by Bank A to recover the non-performing financing as well as secondary data. Secondary data was obtained by looking up to the relevant provisions from the facility agreement of the three Islamic banks in respect of an event of default and compensation, collection of information from Bank Negara Malaysia’s Policy Documents and Guidelines, case law from Lexis Nexis, books, articles and journals relevant with the research topic. This study is aimed to reveal the responsibilities of the customers and Islamic banks in managing and handling the non-performing financing as well as examine the measures taken by Bank A to recover its non-performing financing. This research is significant in attempt to highlight the obligations of the customers on their financing as well as the treatment by Islamic banks in assisting and dealing with the non-performing financing.

PERLINDUNGAN HUKUM TERHADAP PELAKU USAHA RENTAL MOBIL AKIBAT PENYEWA YANG BERIKTIKAD TIDAK BAIK

The reason behind this research is the delay in returning the rental car that is not in accordance with the agreed time limit in the practice of car leasing. This research examines the problem of how legal protection for owner of car rental business and legal consequences for each party in the event of default on a car rental agreement based on Indonesian Civil Code. The research method used by the author to complete the thesis is the normative juridical legal research method, namely analyzing a problem based on laws and regulations and conducting literature studies such as book literature and other documents. The result of this research is to know that civil law protects the rights of entrepreneur who are harmed by renter based on the strength of the lease agreement in article 1320 and article 1338 of the Civil Code. Renters are also protected by law regarding their right to be free from liability due to force majeure based on articles 1244 and 1245 of Indonesian Civil Code. It can be concluded that business actors and renter must understand their respective responsibilities and rights and obligations based on existing legal rules based on the principle of good faith.

LEGAL PROTECTION OF CREDITORS AGAINST THE EXECUTION OF COLLATERAL OBJECTS IN THE EVENT OF THE DEBTOR'S BREACH OF PROMISE AT BANK MANDIRI KC SURABAYA GENTENGKALI

When the debtor neglects to make payments on his debt, an execution parate is made as a form of legal protection for creditors. The origin of the execution of mortgage rights can be traced back to this time. UUHT has provided a precise description of the execution that can be carried out in the event of a debtor's default, including holding an auction known as "execution parate". Empirical legal research does not only focus on the positive aspects of law but also its application or practice in the field. In addition, the methodology used in this research is qualitative. In addition, this study uses three types of legal materials, namely primary legal materials, secondary legal materials, and tertiary legal materials. This study shows that Article 6 UUHT contains requirements regarding legal protection for creditors. The form of a written agreement is another form of legal protection for creditors to be able to take back their rights from debtors with bad intentions to pay off their receivables, and banks can carry out parate executions if the debtor defaults.

KEPASTIAN HUKUM TERHADAP PERJANJIAN AKAD QARD WAL IJARAH ATAS DANA TALANGAN HAJI PADA BANK SYARIAH


 
 
 
 Al-qard wal ijarah is a financing product available at Islamic Banks with the aim of making it easier for people to perform the pilgrimage. Hajj bailout funds are basically in order to make it easier for people to perform the pilgrimage. Whereas Law Number 21 of 2008 concerning Sharia Banking, Article 1 paragraph (1) in this Law states that; Sharia Banking is everything that concerns Sharia Banks and Sharia Business Units, including institutions, business activities and procedures and processes in carrying out their business activities. In practice, there are problems when there is a default in the agreement. This research is to examine the arrangements for the implementation of the Qard Wal Ijarah Akad Agreement on Hajj Bailout Funds at Islamic Banks and examine the provisions of the Qard Wal Ijarah Akad Agreement on Hajj Bailout Funds at Islamic Banks in order to achieve legal certainty. This study uses an analytical knife, namely using the theory of legal certainty and the theory of agreements.
 The method used in this study is normative juridical research, namely library law research or secondary data with sources of primary, secondary and tertiary legal materials. The research approach used is the statute approach, conceptual approach, analytical approach, case approach and legal material collection techniques by identifying and inventorying positive legal materials, literature books, journals and other sources of legal materials. For legal material analysis techniques, legal interpretation (interpretation) is systematic interpretation and legal construction methods by analogy, legal refinement construction (rechtsverfijning) and argumentum a contrario. The results of the researcher's analysis conclude that the arrangement in implementing the consequences of the agreement in the Qard Wal Ijarah contract for the financing of hajj bailout funds at Islamic banks raises problems when there is a default in the agreement. Defaults committed by parties causing losses to Islamic Banks. The absence of collateral in the ijarah contract agreement raises concerns about fraud in the Hajj bailout fund financing at Islamic banks. The provisions of the Qard Wal Ijarah Contract Agreement for Hajj Bailout Funds at Islamic Banks in order to achieve legal certainty is that there is a guarantee in financing that has several functions, namely increasing the level of trust of the owner of the funds to the user of the funds. In addition, the guarantee function can be a means of paying debts in the event of default by cashing in or selling the collateral. In this case, collateral in Islamic bank financing is a support or reinforcement for banks to provide financing for third parties. The researcher's suggestion is that for the government it is necessary to make specific regulations in terms of making an Ijarah agreement deed by including a guarantee clause as a deterrent and a solution in the event of a default. For financing distributors, putting more emphasis on implementing the customer's character, capacity (customer's ability in future business prospects), collateral (collateral) so as not to harm.
 
 
 

Peregrine Aviation Bravo Limited and Others v (1) Laudamotion GmbH (2) Ryanair Holdings PLC: English Court Rejects Lessor’s Claims That Events of Default Had Occurred in An Aviation Leasing Dispute

The English Commercial Court has awarded a rare victory to an airline lessee in a pandemicrelated case concerning disputed termination notices and events of default following the lessee’s refusal to accept delivery of an aircraft. The case confirms the importance of the careful drafting of termination notices as well as the importance for lessors to comply with pre-delivery obligations. Aircraft Delivery, Lease, Lessee, Lessor, Pandemic, Termination