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This chapter examines the resulting trust. It is a type of implied trust and it arises by operation of law either because of the presumed intention of the parties or because of the failure of an express trust. A presumed resulting trust arises where land is purchased in the name of one party but the purchase monies have been provided by another party. The presumption can be rebutted by evidence of a gift or advancement to a close family member of a loan. Evidence of an illegal motive was once inadmissible to use to rebut a presumption but today the court uses its discretion as to whether it will be admitted. Automatic resulting trusts usually arise where a purpose has failed. A new type of trust 'the Quistclose trust' was created when Quistclose successfully recovered money loaned to pay dividends to a company which went bankrupt. Sometimes a surplus remains after the purpose of the trust has been carried out this will result back to the settlor and where a trust fails to conform with key requirements of a trust then the property will usually revert back to the settlor although in some cases the trust property has been found to be an absolute gift.
Chapter 4 develops the analysis of Chapter 3 by exploring how some wealthy Huizhou merchants carved out a dangerous approach to dealing with the government’s salt monopoly. Ingeniously adapting a strategy similar to that tried with their ancestral halls, they sought to place themselves inside an authorized institution of the state, the salt monopoly, and then turned the humble salt certificate into a financial instrument to their great advantage. By tricking the court’s incompetent representatives, Huizhou salt merchants were able not just to create great fortunes at government expense, but also from 1617 turn the government’s massive debt to them into a set of highly lucrative hereditary salt monopoly appointments for them and their sons. This chapter also deals with the private, secular variants of pawnshops that Huizhou merchants increasingly set up in the much of east China and the Yangzi Valley from the sixteenth century onward. It describes a reduction of the reported interest rate, both for individuals and for merchants, over the course of the dynasty, from 50 percent down to 20 percent, as more and more ordinary people relied on short-term infusions of capital for their living needs.
The phenomenon of post-soviet oligarchs in Russia, Ukraine, and others is so well-known it needs little definition; however, how exactly it came about and how this was related to economic reforms is often misunderstood – this chapter relies on extensive earlier studies to summarize the main explanations. Littler-known is the embryonic start of most oligarchs under the partial reforms of Gorbachev, allowing for the first time private enterprise with the 1997–1998 Laws on Cooperatives. With no market liberalization for prices or foreign trade, these new companies could only prosper by using insider connections to intermediate between state firms and thus skim off profits and assets. The cleverest and best-connected rapidly accumulated hordes of cash and established pocket-banks, preparing for future open privatization of state firms. The notorious episode of Loans-for-Shares in Russia may not have been the largest part of actual privatization, but illustrates well the nontransparent quasi-legal “stealing” of state assets that the population saw this to be, and due to this believed that market reforms in general were bad for the people. The reality that this could only happen because reforms were very partial did not change such perceptions, even to the present day.
This study examines the relative importance of local institutions and external finance on small business investment. Utilising the institutional theory, we argue that local institutions and external finance have heterogeneous effects on firm investment. More importantly, they may interact and moderate each other. Analysing a set of 1.3 million observations of small businesses operating in Vietnam (2006–2016) obtained from the Annual Enterprise Survey data from the Vietnam Statistics Office, we find that local institutional settings and external finance are important determinants of firm investment. Moreover, local institutions are able to moderate the effects of external finance on firm investment. As such, this study asserts that conventional models cannot discern whether institutions or external finance are more important to firm investment. Rather, the relative importance of institutions and external finance should be investigated from the perspective of their interaction.
Between 1800 and 1820, Buenos Aires and the former colonial Viceroyalty of Rio de la Plata faced an unprecedented fiscal crisis caused by the revolutionary wars, eventually solved by levying forced loans. This paper considers the unintended institutional consequences of these loans. The novel devices allowed (1) the holders of forced-loan coupons to use these bonds to pay off debts incurred in customs duties and (2) the holders of bills of exchange involved in the provisioning of the military to use these bills to pay part of their forced loans. Starting with the conceptualisation of the institutional order as a complex system, this paper examines the interactions among the circulation of financial paper bills, the financing of war and changes in the position of the merchants' guild and the legal framework for Atlantic trade. It thereby contributes to renewing institutional change approaches in the Spanish-American context.
Chapter 6 examines severe and protracted economic contractions following the Great Recession of 2008–09 in two countries on the European periphery: Latvia and Greece. It documents the evolution of main macroeconomic aggregates and social indicators in these two countries before, during, and after the 2008–09 crisis. The chapter also critically examines the role played by the International Monetary Fund (IMF) and other European institutions in the design and implementation of austerity in these economies, and draws lessons for other nations from these two experiences. The chapter also discusses the futility of democratic consultation (referendums) in Greece for the amelioration of conditionality and austerity.
As Bernardo Dovizi had said, as long as there was fighting in Italy, Piero was not without hope. So although the new year, 1498, opened with Piero enjoying ‘little reputation and less credit’, renewed fighting in Italy kept his hopes alive for the remaining years of his life.1 Two events helped to change the political scene, principally the succession of Louis of Orleans to the French throne in April, but also the execution of Savonarola the following month. With claims on Milan as well as Naples, King Louis XII forged new alliances in Italy, most notably with Venice and Pope Alexander VI, who used France to further his son Cesare Borgia’s attempts to build a state for himself in central Italy. The destabilisation they created encouraged Piero’s military adventurism, while the final unravelling of Savonarola’s life – his attack on the pope, his last defiant sermons and the aborted Trial by Fire in March and early April 1498 – also helped to revivify Piero by discrediting the Florentine government at home and abroad.2 So Piero’s little-known movements in these years provide a novel outside-in view of Florence’s crisis that helps to explain the threatened coup d’état in 1500 and the life Gonfaloniership two years later.
The author participated in the local implementation of Clinton Era legislatively created programs that a Congressional delegate once described as having the potential to lift the yolk of paternalism and allow Native Americans an opportunity to achieve the American Dream. Lofty language aside something seemed amiss. Therefore, he recounts – from a practitioner’s perspective – the history to increase access to capital for tribal community- and economic development through a Native Community Development Financial Institutions based in Arizona. The challenges are evident as he states: “Where English canon law was used as a weapon to dispossess Native people of their lands, languages and cultures; western style finance as a tool has been withheld since the colonial period and through current times for the rebuilding and resurgence of tribal Nations.” He ends by reflecting on the continuing effort to build the infrastructure and institutions necessary for a modern economy in a tribal context.
Slovenia has long been cited as a success story among the post-socialist countries due to the successful political management of multiple transitions, including the creation of an independent state and joining the European Union (EU) in 2004. However, the national political elite not only failed to formulate further developmental goals for Slovenia, but also proved incapable of effectively managing Slovenia’s socio-economic development in the context of full integration into the EU, which brought about a high availability of external finances. This, and particularly extensive borrowing of external money in mismanagement of the impacts of the international financial and economic crisis turned Slovenia into a country dependent on external loans and thereby also subordinated to policies dictated by external actors. Although Slovenia has been recovering from the economic crisis, the political crisis in the form of a series of early elections and complete de-institutionalization of a party system continues.
This article explores the world of informal financial transactions and informal networks in pre-industrial France. Often considered merely as simple daily transactions made to palliate a lack of cash in circulation and to smooth consumption, the examination of private transactions reveals not only that they served various purposes, including productive investments, but also that they proved to be dynamic. The debts they incurred helped to smooth consumption but also helped to make investments. Some lenders were more prominent than others, although no one really dominated the informal market. This article also compares informal transactions with formal ones through the study of probate inventories and notarial records respectively. It compares these two credit circuits, their similarities and different characteristics, and their various networks features. The debts incurred in the notarial credit market were more substantial but did not serve a different purpose than in the informal market. Here too, the biggest lenders did not monopolise the extension of capital. Perhaps the most striking result lies in the fact that the total volume of exchange between the informal credit market and the notarial credit market (after projection) was similar.
Before banks rose to dominate credit markets, ordinary people raised credit themselves or through alternative intermediaries. However, obtaining a comprehensive overview of the size and functioning of the non-bank segments within the credit market has been a great challenge for historians. Notarial deeds are widely available, but typically shed light on the borrowing of relatively well-to-do members of society. Probate inventories and insolvency records do provide insight into the modest loans of ordinary people, but only haphazardly and not for the overall stock of loans. This article exploits an exogenous shock, the Discipline Act introduced in the Netherlands in 1856, which forced lenders to record all unredeemed loans they had provided to a particular group of borrowers: seafarers. The c.14,000 loans that were recorded, in combination with several additional sources, provide a unique insight into the overall size, composition and functioning of a particular segment of the non-bank credit market.
Compound interest was known to ancient civilisations, but as far as we know it was not until medieval times that mathematicians started to analyse it in order to show how invested sums could mount up and how much should be paid for annuities. Starting with Fibonacci in 1202 A.D., techniques were developed which could produce accurate solutions to practical problems but involved a great deal of laborious arithmetic. Compound interest tables could simplify the work but few have come down to us from that period. Soon after 1500, the availability of printed books enabled knowledge of the mathematical techniques to spread, and legal restrictions on charging interest were relaxed. Later that century, two mathematicians, Trenchant and Stevin, published compound interest tables for the first time. In 1613, Witt published more tables and demonstrated how they could be used to solve many practical problems quite easily. Towards the end of the 17th century, interest calculations were combined with age-dependent survival rates to evaluate life annuities, and actuarial science was created.
How are defense co-operation and economic co-operation related? To answer this question, this article analyzes the coevolution of defense co-operation agreements (DCAs) and government-to-government loans. It argues that governments pursue two distinct sets of interests. At the bilateral level, governments use issue linkages and side payments to encourage spillover from defense co-operation to economic co-operation, and vice versa. That is, governments’ bilateral interests in DCAs and loans are largely complementary. However, at the network level, interests may diverge. Specifically, governments use DCAs to build clubs of like-minded defense collaborators or ‘security communities’, while they use loans to impose asymmetric forms of political authority or ‘hierarchies’. In some contexts, these network-level interests are, like bilateral interests, complementary. For example, defense partners rely on loans to co-ordinate their foreign policies and better respond to security threats, and debtors rely on lending patterns to identify suitable defense partners. In other cases, however, these interests strongly conflict. For example, governments that are highly active in the loan network are especially likely to rely on asymmetric exercises of political authority, which is incompatible with the network-level goal of using DCAs to establish communities of defense collaborators. Similarly, governments that are highly active in the DCA network are, due to their complex multilateral political commitments, less vulnerable to the asymmetric influences that loans enable. To empirically test these claims, the study develops a longitudinal model of multiplex network coevolution. Overall, the results show that while economic and defense co-operation often reinforce one another, they sometimes conflict in unexpected ways.
Geneva is host to the most ancient and venerable private banks of Switzerland, but not much is known about the circumstances in which the city allegedly developed an early competitive advantage in wealth management. Using an extraordinary qualitative source (Jacques Mirabaud's papers, and especially his memoirs), this article outlines the microstructure of Genevan private banking at the time of its emergence in the early nineteenth century. It finds that in those years, wealth managers’ ‘raw material’ did not consist of foreign capital, but of a remarkably abundant stock of domestic capital. Financial and social factors were intertwined in producing a very hierarchical division of labour in the origination and distribution of international sovereign loans.
This study utilizes Farm Service Agency lending data to verify if previous racial and gender bias allegations still persist in more recent lending decisions. Beyond loan approval decisions, this study focuses on trends in direct loan packaging terms for approved single proprietorship farm borrowers. Results indicate that although no significant disparities were noted in loan amounts and maturities prescribed for various racial and gender minority groups, nonwhite male and female borrowers were usually charged higher interest rates than the others. Loan pricing differentials could have been the lenders' strategy for price management of borrowers' credit risks.
China faces a number of important financial-stability risks. A persistent feature of the Chinese banking sector is the rapid formation of non-performing loans (NPLs) during each business cycle. Moreover, lending restrictions and interest-rate caps (“financial repression”) have, in part, given rise to an ever-expanding shadow-banking sector. The article highlights five cardinal sins within the Chinese financial system: (1) bad lending practices by the regulated sector, (2) lax governance, (3) a shadow-banking system that is dominated by short-term claims with no liquidity backstop, (4) stark lack of transparency in the shadow sector, and (5) very high levels of interconnectedness between the shadow and the regulated sector. The article suggests that some of these problems will be alleviated through a regulatory big bang that would abolish the current silo approach to financial regulation streamlining financial stability and conduct/consumer-protection supervision. Furthermore, we recommend the introduction of a binding and all-encompassing leverage ratio that will require banks to hold much higher capital buffers as a means to boost bank resilience, reduce NPLs, and battle interconnectedness with the shadow sector.
Football language may be regarded as the world's most widespread special language, where English has played a key role. The focus of the present study is the influence of English football vocabulary in the form of loan translations, contrasted with direct loans, as manifested in 16 European languages from different language families (Germanic, Romance, Slavic, etc.). Drawing on a set of 25 English football words (match, corner, dribble, offside, etc.), the investigation shows that there is a great deal of variation between the languages studied. For example, Icelandic shows the largest number of loan translations, while direct loans are most numerous in Norwegian; overall, combining direct loans and loan translations, Finnish displays the lowest number of English loans. The tendencies noted are discussed, offering some tentative explanations of the results, where both linguistic and sociolinguistic factors, such as language similarity and attitudes to borrowing, are considered.
Life insurers have historically relied upon investment markets as a key source of profit and crucially have been able to do this while embarking on relatively “vanilla” investment strategies. In the current low-yield environment, broadening their investment horizons is critical to maintaining profitability. This paper summarises some relevant external literature and the working party’s own research in understanding the potential benefits and pitfalls for insurers seeking to invest in non-traditional assets. The objective of this paper is to help educate and promote understanding by all (the many) relevant parties. In doing so, we hope to help organisations to achieve some further economic success for the ultimate benefit of society. Although this paper has primarily been written from the perspective of a life insurer, we hope it will be of interest to a much wider audience. Many of the asset classes considered here are relevant to general insurers, pension funds and the wider capital markets. It is very important to note that this paper does not contain investment advice and the analysis represents the views of the individuals and the working party and not the companies which they represent or the Profession. This paper does not make any comment as to the suitability (or otherwise) of specific investments for particular investors.