PIK notes and Parliamentary Commission on Banking Standards: Difference between pages

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imported>Doug Williamson
(Expand first sentence.)
 
imported>Doug Williamson
(Add See also reference to LIBOR.)
 
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PIK notes are debt instruments based on non-cash payment of interest coupons.
(PCBS).


Interest is usually recognised by an increase in the amount of principal owed by the borrower.
== Terms of reference ==


The Parliamentary Commission on Banking Standards was established by the UK Parliament to:


PIKs are generally either unsecured loans or deeply subordinated securities ranking just before equity in the capital structure.  
'''A.''' Consider and report on:


This means that, in the event of a bankruptcy, PIKs are the last debts to be repaid, making them a high risk instrument for lenders and investors.  
# Professional standards and culture in the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting scandal.
# Lessons to be learned about:
## Corporate governance.
## Transparency.
## Conflicts of interest.
## Their implications for regulation and for UK Government policy.


In order to compensate lenders for the risk, PIKs have to offer significantly enhanced rates of return to investors.
'''B.''' Make recommendations for legislative and other action.
 
 
 
== Final report ==
 
The Commission's 2013 report is designed to address:
 
# Making the individual responsibility of senior bankers a reality.
# Reinforcing each bank's own responsibility for its own soundness and the maintenance of its standards.
# Creating better functioning and more diverse banking markets.
# Reinforcing regulators' responsibility to exercise judgement in deploying their powers.
# Specifying the responsibilities of the UK Government.
 
 
The Commission's report setting out its conclusions and recommendations can be downloaded here:
[[Media:PCBS report June 2013.pdf|PCBS final report June 2013]].




== See also ==
== See also ==
* [[Coupon]]
* [[LIBOR]]
* [[Equity]]
 
* [[Interest]]
 
* [[Notes]]
==External links==
* [[Payment in kind]]
*[http://www.parliament.uk/bankingstandards UK Parliament: PCBS]
* [[Principal]]
 
* [[Secured debt]]
[[Category:Regulation_and_Law]]
* [[Subordinated debt]]
[[Category:Control_and_Reporting]]
* [[Unsecured debt]]
[[Category:Policy_and_Objectives]]
[[Category:The_Treasury_Professional]]

Revision as of 14:50, 28 June 2013

(PCBS).

Terms of reference

The Parliamentary Commission on Banking Standards was established by the UK Parliament to:

A. Consider and report on:

  1. Professional standards and culture in the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting scandal.
  2. Lessons to be learned about:
    1. Corporate governance.
    2. Transparency.
    3. Conflicts of interest.
    4. Their implications for regulation and for UK Government policy.

B. Make recommendations for legislative and other action.


Final report

The Commission's 2013 report is designed to address:

  1. Making the individual responsibility of senior bankers a reality.
  2. Reinforcing each bank's own responsibility for its own soundness and the maintenance of its standards.
  3. Creating better functioning and more diverse banking markets.
  4. Reinforcing regulators' responsibility to exercise judgement in deploying their powers.
  5. Specifying the responsibilities of the UK Government.


The Commission's report setting out its conclusions and recommendations can be downloaded here: PCBS final report June 2013.


See also


External links

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