Bailin and Green Climate Fund: Difference between pages

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imported>Doug Williamson
(Create page. Source: Green Climate Fund webpages https://www.greenclimate.fund/who-we-are/about-the-fund https://www.greenclimate.fund/who-we-are/the-climate-challenge#the-big-picture,)
 
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''Bank regulation''
''Green finance - environmental risk management.''


Bailin refers to the use of private sector money, rather than public money, to deal with a failed or failing bank.
(GCF).


Under bailin, private sector creditors of the bank suffer a share of the bank's losses.
The Green Climate Fund is a global fund established to support the efforts of developing countries to respond to the challenge of climate change.  
Broadly, there are two forms of bailin:
#Statutory bailin; and
#Contractual bailin.


The GCF pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States.


The term is derived from 'bail out', which refers to the use of public money these circumstances.
'''1. Statutory bailin'''
A technique used as part of the resolution of a failed bank under statutory authority.
The Resolution Authority (RA) makes an assessment of the extent of expected losses and reconstructs the bank's capital accordingly. 
In reconstructing the bank's capital the RA imposes losses on creditors, including preferred shareholders and depositors. 
The allocation of the total expected losses follows the creditor hierarchy that would apply in a liquidation, until the total expected losses are covered.


The GFC was set up by the 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010, as part of the Convention’s financial mechanism. It aims to deliver equal amounts of funding to mitigation and adaptation, while being guided by the Convention’s principles and provisions.
   
   
The remaining (surviving) layers of debt are partially converted to equity to recapitalise viable parts of the business.
When the Paris Agreement was reached in 2015, the GCF was given an important role in serving the agreement and supporting the goal of keeping climate change well below 2 degrees Celsius.


The viable parts of the business are thus enabled to continue under new ownership.
''Source: Green Climate Fund webpage [https://www.greenclimate.fund/who-we-are/about-the-fund Green Climate Fund - who we are]''




The RA is normally given significant discretion in how the reconstruction - including bailin - is applied.
== See also ==
* [[Climate change: testing the resilience of corporates’ creditworthiness to natural catastrophes]]
* [[Climate risk]]
* [[Paris Agreement]]
* [[Risk management]]
* [[United Nations Framework Convention on Climate Change]]




==External link==


'''2. Contractual bailin'''
[https://www.greenclimate.fund/who-we-are/the-climate-challenge#the-big-picture Green Climate Fund - the climate challenge]
Contractual bailin refers to a provision in the terms of certain bank debt that are to be converted automatically to equity or written off, if conditions specified in the contract obtain.
 
 
Sometimes written ''bail-in'' or ''bail in''.
 
 
== See also ==
* [[Bail out]]
* [[Capital]]
* [[Capital adequacy]]
* [[Eligible liabilities]]
* [[Loss absorbing capacity]]
* [[MREL]]
* [[Resolution Authority]]
* [[Multiple Point of Entry]]
* [[Recapitalisation amount]]
* [[Recapitalise]]
* [[Single Point of Entry]]
*[[SLAC]]
* [[Cash in the new post-crisis world]]
* [[Bailout]]


[[Category:Compliance_and_audit]]
[[Category:The_business_context]]
[[Category:Risk_frameworks]]
[[Category:Ethics]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]

Revision as of 07:07, 3 April 2019

Green finance - environmental risk management.

(GCF).

The Green Climate Fund is a global fund established to support the efforts of developing countries to respond to the challenge of climate change.

The GCF pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States.


The GFC was set up by the 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010, as part of the Convention’s financial mechanism. It aims to deliver equal amounts of funding to mitigation and adaptation, while being guided by the Convention’s principles and provisions.

When the Paris Agreement was reached in 2015, the GCF was given an important role in serving the agreement and supporting the goal of keeping climate change well below 2 degrees Celsius.

Source: Green Climate Fund webpage Green Climate Fund - who we are


See also


External link

Green Climate Fund - the climate challenge

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