Bank Assets Management Company (BAMC)

Slovenia weathered the initial shock of the Global Financial Crisis (GFC) of 2008 well enough to return to growth in 2010. However, non-performing loans continued mounting, banks experienced significant losses, and credit growth turned negative in a credit crunch. Slovenia entered a recession in 2011, experiencing the second largest GDP decline in the euro area. It was not certain whether Slovenia had the fiscal space to resolve these problems without requesting a Troika bailout from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF). In late 2012 the government tried to prevent such a program by combining capital injections with a public asset management company (AMC) called the Bank Assets Management Company (BAMC). The BAMC did not start purchasing assets until December 2013. The EC believed that BAMC’s asset valuation process did not fit their standards and delayed approval for the purchases accordingly. However, the BAMC eventually purchased assets (largely related to Slovenia’s large corporate sector) with a face value of €5.8 billion for €2.0 billion. The European Commission was highly involved in the BAMC’s implementation. The organization’s design left it vulnerable to government interference. Management was initially dominated by a group of international experts who were extremely unpopular with the public and the government, and the organization did not have sufficient powers to demand collection from well-connected corporate debtors, many of them state-owned

The Rescue of the US Auto Industry, Module A: Automotive Bridge Loans

In 2008, in the midst of the Global Financial Crisis, America’s Big Three automakers neared their breaking point. Two of them, General Motors (GM) and Chrysler, asked Congress for funding to prevent uncontrolled bankruptcies. Policymakers realized these uncontrolled bankruptcies would damage the manufacturing sector. Congress considered but failed to pass a framework conditioning short-term financing on the companies’ producing acceptable restructuring plans. With the companies warning that they could not survive the coming presidential transition, on December 19, 2008, President George W. Bush announced the Automotive Industry Financing Program (AIFP) under the authority of the Emergency Economic Stability Act (EESA) of 2008, which made up to $17.4 billion available to the two companies. After two extensions to GM, the government would lend a total of$23.8 billion to GM and Chrysler under this program, funding the companies from late 2008 through their mid-2009 bankruptcies (the Bridge Loans). This case discusses these Bridge Loans, which helped the companies survive the presidential transition and begin creating plans to survive bankruptcy

The Rescue of the US Auto Industry, Module C: Restructuring Chrysler through Bankruptcy

In late 2008, due to the confluence of the financial crisis and years of structural decline in the auto industry, Chrysler was nearing bankruptcy. The US Treasury provided Chrysler’s owner, Chrysler Holding, with a $4 billion bridge loan and Chrysler’s related finance company, Chrysler Financial, with a$1.5 billion financing program under the Troubled Assets Relief Program (TARP). The government-led restructuring through bankruptcy involved the commitment of roughly $5 billion in debtor-in-possession (DIP) loans from the US Treasury and the Canadian government, under which the US Treasury ultimately lent$1.89 billion, using TARP funds, and Canada lent about $1 billion, proportional to its share of the North American Free Trade Agreement (NAFTA) auto industry. It also involved concessions from stakeholders, corporate governance arrangements for the “New Chrysler,” and a merger with Italian automaker Fiat Automobiles S.p.A. Treasury financed the purchase by the New Chrysler of substantially all of the old Chrysler’s assets with a$7.14 billion loan. The bankruptcy case was controversial and nearly reached the US Supreme Court, but the restructuring ultimately rescued Chrysler. In the Chrysler rescue, Treasury lost about $2.93 billion on an investment of about$10.47 billion

National Asset Management Agency (NAMA)

After the Irish property boom peaked in 2007, Ireland’s banks faced declining share prices and increasing liquidity pressures. When in the aftermath of the September 2008 collapse of Lehman Brothers, Ireland’s banks lost access to liquidity from abroad, it triggered a banking crisis in the country. In spite of various responses by the Irish government, the financial viability of Ireland’s banks (as well as the government’s fiscal position) continued to deteriorate in early 2009. The Irish government attributed the problem to impaired real estate assets sitting on bank balance sheets, which made it difficult for markets to believe that government’s upcoming capital injections would render the banks solvent. In response, the government created the National Asset Management Agency (NAMA), a majority privately owned asset management company (AMC), to remove these assets from the banks. The ownership structure was complex, being nominally privately owned so that NAMA would not appear on the government balance sheet. Most of the powers and benefits from ownership were structured so that they would accrue to the state.From its establishment under the NAMA Act on December 21, 2009, NAMA purchased assets with a face value of approximately €77.4 billion for €31.7 billion. As of December 31, 2018, it had disposed of all but €2.3 billion of these assets. NAMA was considered one of the best performing AMCs of the era and enjoyed an expansive legal mandate, but it was not sufficient to solve Ireland’s economic woes.Although NAMA was still operating as of 2019, it was projected to wind down by 2025 (having submitted a detailed wind-down plan by the end of 2021) and yield a profit of €4 billion

The Rescue of the US Auto Industry, Module E: Emergency Assistance for Chrysler Financial

In the fall of 2008, due to the confluence of the Global Financial Crisis and years of structural decline in the auto industry, Chrysler was nearing bankruptcy. Chrysler’s related finance company, Chrysler Financial, was also in dire straits. On December 19, 2008, President Bush announced the Automotive Industry Financing Program and that the US Treasury would extend Chrysler a $4 billion Bridge Loan to give the company time to prepare a viable restructuring plan. Two weeks later, the Treasury arranged$1.5 billion in low-interest financing for Chrysler Financial to fund the securitization of new consumer car loans and the facility subjected Chrysler Financial to several management restrictions, most of which related to executive compensation. Chrysler Financial drew down the entire $1.5 billion between January 16 and April 9, 2009. When Chrysler entered bankruptcy on April 30, GMAC, General Motors’ related auto finance company, took over most of Chrysler Financial’s business. Chrysler Financial continued to do business at a much smaller scale and Treasury expected Chrysler Financial to wind down its business. Although the loan bore a five-year term, Chrysler Financial paid off the loan in July after accessing another government program, the Term Asset-Backed Securities Loan Facility (TALF) and continued to operate. In December 2010, TD Bank bought Chrysler Financial from Cerberus, its major shareholder, for$6.3 billion. Commentators do not have much to say on the impact of the government’s aid for Chrysler Financial, although the $1.5 billion facility coincided with several months of increased sales

Positive effective Q12 electrostrictive coefficient in perovskites

It is demonstrated that for classical perovskites such as BaTiO3, SrTiO3 and PbTiO3 electrostrictive strain induced by an electric field may not obey traditionally considered "extension along the field, contraction perpendicular to it" behavior if a sample is cut obliquely to the cubic crystallographic directions

Mexico: FOBAPROA Capitalization and Loan Purchase of Bank Portfolio Program (CLPP)

In December 1994, Mexico entered a financial crisis after a year of political turmoil, assassinations of high-level politicians, and a substantial depreciation of the peso. In 1995, following the economic contraction, the recently privatized banking sector experienced difficulties in meeting regulatory minimum capital requirements. The Mexican government received a $52 billion international financial package and enacted multiple programs to support the banking system. In the spring of 1995, through the Bank Fund for Savings Protection (FOBAPROA), the Capitalization and Loan Purchase of Bank Portfolio Program (CLPP) was introduced to provide new, permanent capital to Mexican banks. For banks that were able to secure private recapitalizations, FOBAPROA acquired twice the amount in nonperforming loans. Between 1995 and 1996, 11 banks participated in the program, which purchased nonperforming assets with a book value of MXN 142 billion for MXN 119 billion ($18.1 billion for $15.6 billion in end-1996 US dollars). By 1997, the Mexican financial system had stabilized, but the banking sector was still struggling when FOBAPROA was discontinued in 1999. The CLPP ameliorated the situation, but it remained a highly controversial program and some commentators were not sure whether it did enough to revive the Mexican economy

Thermal noise of whispering gallery resonators

By direct application of the fluctuation-dissipation theorem, we numerically calculate the fundamental dimensional fluctuations of crystalline CaF2 whispering gallery resonators in the case of structural damping, and the limit that this noise imposes on the frequency stability of such resonators at both room and cryogenic temperatures. We analyze elasto-optic noise - the effect of Brownian dimensional fluctuation on frequency via the strain-dependence of the refractive index - a noise term that has so far not been considered for whispering-gallery resonators. We find that dimensional fluctuation sets a lower limit of 1E-16 to the Allan deviation for a 10-millimeter-radius sphere at 5 K, predominantly via induced fluctuation of the refractive index.Comment: 7 pages, 3 figure

The Bank Assets Management Company (BAMC) in Slovenia

Slovenia weathered the initial shock of the Global Financial Crisis (GFC) of 2008 well enough to return to growth in 2010 (IMF 2012, 1-2) (Markovic-Hribernik and Tomec 2015, 128-129). However, non-performing loans continued mounting, banks experienced significant losses, and credit growth turned negative in a credit crunch (IMF 2012, 1-2) (Markovic-Hribernik and Tomec 2015, 128-129). In 2011, Slovenia entered a recession, experiencing the second largest GDP decline in the euro area (Damijan 2012, PDF Page 13). It was not certain whether Slovenia had the fiscal space to resolve these problems without requesting a Troika bailout from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF). In late 2012 the government tried to prevent such a program by combining capital injections with a public asset management company (AMC) called the Bank Assets Management Company (BAMC) (Bardutzky 2016, 11) (Slovene Press Agency 2012b). Delays imposed by the European Commission meant that the BAMC did not start purchasing assets until December 2013 (Bank of Slovenia 2013, 105-106). However, the BAMC eventually purchased assets (largely related to Slovenia\u27s large corporate sector) with a face value of ‚¬5.8 billion for ‚¬2.0 billion (Balogh 2018, PDF Page 4) (Lehmann 2017, 7). The European Commission was highly involved in the BAMC\u27s implementation and the organization\u27s design left it vulnerable to government interference (EIU 2013-11-05) (Sila 2015, 9). It was initially dominated by a group of international experts who were extremely unpopular with the public and the government, and it did not have sufficient powers to demand collection from well-connected corporate debtors, many of them state-owned (EIU 2014a) (BAMC 2014, 9-10) (Lehmann 2017, 7) (BAMC Press Release 2014-12-18a) (BAMC Press Release 2015-07-13)

National Asset Management Agency (NAMA) in Ireland

When the aftermath of the September 2008 collapse of Lehman Brothers burst a long-running real estate bubble in Ireland, it triggered a banking crisis. In spite of various responses by the Irish government, the financial viability of Ireland\u27s banks (as well as the government\u27s fiscal position) continued to deteriorate in early 2009 (Bacon 2009, 8-9). The Irish government attributed the problem to impaired real estate assets sitting on bank balance sheets and created the National Asset Management Agency (NAMA), a majority privately owned asset management company (AMC), to remove these assets from the banks (Carroll and Dodd 2012, 8-9). From its establishment under the NAMA Act on December 21, 2009, NAMA purchased assets with a face value of approximately ‚¬77.4 billion for ‚¬31.7 billion (Oireachtas Inquiry 2016, PDF Page 315). As of December 31, 2018, it had disposed of all but ‚¬2.3 billion of these assets. NAMA was considered one of the best performing AMCs of the era and enjoyed an expansive legal mandate, but it was not sufficient to solve Ireland\u27s economic woes (Cas and Peresa 2016, 25) (Sibley 2017, PDF Page 3). Although NAMA was still operating as of 2019, it was projected to wind down in 2021 and yield a profit of ‚¬4 billion (Cas and Peresa 2016, 16) (NAMA 2019, 9-10) (NAMA Second Progress Report 2018, 19)