Kazachenok O.P. Legal Regulation of Syndicated Lending Abroad and the International Practice

DOI: https://doi.org/10.15688/lc.jvolsu.2017.1.23

Olesya P. Kazachenok

Candidate of Juridical Sciences, Associate Professor, the Department of Civil and International Private Law, Volgograd State University, the Base Department of the Southern Scientific Center of the Russian Academy of Sciences, Prosp. Universitetsky, 100, 400062 Volgograd, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it.

Introduction: taking into account the problem of slow development of the syndicated credit facility of the economic subjects in today’s Russia, as well as its legal basis, in this paper we investigate the foreign experience of the legal regulation of this financial technology. Purpose and methods: at a time when syndicated lending is considered to be an innovative banking product in the Russian Federation, this form of co-financing has been used abroad for a long time and very successfully, which makes it of current concern to study its regulation using the method of comparative and legal analysis. Results: there has been set the absence of the detailed legal regulation of this field of business relations. There has been highlighted the problem of poor development of the mutual credit partnership among the commercial banks in Russia. The author has revealed the existing regulatory deficiencies whose correcting will contribute to the development of syndicated lending to domestic borrowers and, as a consequence, the growth of the real sector of the national economy as a whole. The investigated deficiencies of the current Russian legislation, as well as the analysis of the Russian business practices, have allowed to come to the conclusion that the domestic banks, as a rule, are only the co-organizers of a syndication, thus giving the main role in the projects of joint lending to foreign banks. There has been given the reasoning behind this.
Conclusions: it has been concluded that the analysis of the legal structure of syndicated lending offers exciting possibilities of the cross-border cooperation. The international syndicated lending is called an effective tool for attracting financial resources, the most important source of refinancing, as well as financing mergers and acquisitions, and investment projects in the era of innovations. There have been determined the predominant characteristics of syndicated lending for the rapid development of the international economic turnover, including its possibility to provide continuous cash flows and the production internationalization, as well as to influence the strengthening of foreign relationships. As a measure promoting to the choice by the parties of an international syndicated agreement as the applicable Russian law, it is recommended to direct the national legislator’s efforts primarily to the development of flexible standardized documentation, providing ample opportunities to the participants and allowing to change the terms of a syndicated agreement.

Keywords: legal regulation of banking activities, financial technology, forms of bank lending, syndicated loans, foreign economic activity, international syndicated lending.

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