FINANCIAL INNOVATIONS IN LEVERAGED COMMERCIAL LOAN MARKETS

In the last decade, three innovations in commercial loan-based securities and derivative have enabled institutional investors to access commercial loan markets on leveraged terms : collateralized loan obligations (CLOs); loan-based total return swaps; and leveraged loan-based structured notes (LLSNs). These innovations have been driven by a combination of structural changes in the banking industry, enhanced technology for securitizations, reformed banking regulations, and the advent of credit derivatives.
Besides providing new investment opportunities for institutional investors, these recent innovations in loan markets also promise to reinforce the existing trend in banking away from financial intermediation and toward information intermediation. Such a trend, the authors argue, is helping to ensure the long-run viability of commercial banks. By transforming loan assets in the ways described in this article, banks can generate fee income instead of interest income (thus limiting their capital requirements and interest rate and credit exposures) while still exploiting their comparative advantage in credit analysis and monitoring.     

Einzelbesprechungen

Ohne ZusammenfassungAus dem Italienischen übersetzt von Erich Allina, Wien.Aus dem Englischen übersetzt von Erich Allina, Wien     

Implications of the lome convention for African trade and development

Conclusion The analysis presented here does not support the contention that the Lomé Convention is a turning point in the history of relations between rich and poor nations, and the herald of a new economic order, more just and equitable. While Lomé does not represent radical departures from the present system, it reflects the realization by the vulnerable, resource-poor EEC that some concessions had to be made in the fields of trade and aid. The reforms include: greater trade preferences; STABEX; some participation in the decision-making process of the EDF; financing of economic integration among the ACPs. These modifications, however, do not repudiate the present system, but rather make it more viable. The power of the multinationals is in no way affected, and the pattern of unequal development is left intact. Lomé-type relationships between the poor and rich countries will at best provide the elites with increased resources which might lead to national capitalist development, strengthening of the elites’ material base, and reproduction of the structure of dependence and inequality.