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We develop a dynamic recursive model where political and economic decisions interact, to study how excessive debt-GDP ratios affect political sustainability of prudent fiscal policies. Rent seeking groups make political decisions – to cooperate (or not) – on the allocation of fiscal budgets (including rents) and issuance of sovereign debt. A classic commons problem triggers collective fiscal impatience and excessive debt issuing, leading to a vicious circle of high borrowing costs and sovereign default. We analytically characterize debt-GDP thresholds that foster cooperation among rent seeking groups and avoid default. Our analysis and application helps in understanding the politico-economic sustainability of sovereign rescues, emphasizing the need for fiscal targets and possible debt haircuts. We provide a calibrated example that quantifies the threshold debt-GDP ratio at 137%, remarkably close to the target set for private sector involvement in the case of Greece.
Research on interbank networks and systemic importance is starting to recognise that the web of exposures linking banks balance sheets is more complex than the single-layer-of-exposure paradigm. We use data on exposures between large European banks broken down by both maturity and instrument type to characterise the main features of the multiplex structure of the network of large European banks. This multiplex network presents positive correlated multiplexity and a high similarity between layers, stemming both from standard similarity analyses as well as a core-periphery analyses of the different layers. We propose measures of systemic importance that fit the case in which banks are connected through an arbitrary number of layers (be it by instrument, maturity or a combination of both). Such measures allow for a decomposition of the global systemic importance index for any bank into the contributions of each of the sub-networks, providing a useful tool for banking regulators and supervisors. We use the dataset of exposures between large European banks to illustrate the proposed measures.
We present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest in non-liquid assets. Market clearing takes place through a tâtonnement process which yields the equilibrium price, while traded quantities are determined by means of a matching algorithm. We compare three alternative matching algorithms: maximum entropy, closest matching and random matching. Contagion occurs through liquidity hoarding, interbank interlinkages and fire sale externalities. The resulting network configurations exhibits a core-periphery structure, dis-assortative behavior and low clustering coefficient. We measure systemic importance by means of network centrality and input-output metrics and the contribution of systemic risk by means of Shapley values. Within this framework we analyze the effects of prudential policies on the stability/efficiency trade-off. Liquidity requirements unequivocally decrease systemic risk but at the cost of lower efficiency (measured by aggregate investment in non-liquid assets); equity requirements tend to reduce risk (hence increase stability) without reducing significantly overall investment.
Different scales, different features. It’s the main difference between the thesis we have presented here, and the one that has so far dominated the study of the paragraph. By defining it as "a sentence writ large", or, symmetrically, as "a short discourse", previous research was implicitly asserting the irrelevance of scale: sentence, paragraph, and discourse were all equally involved in the "development of one topic". We have found the exact opposite: 'scale is directly correlated to the differentiation of textual functions'. By this, we don't simply mean that the scale of sentences or paragraphs allows us to "see" style or themes more clearly. This is true, but secondary. Paragraphs allows us to "see" themes, because themes fully "exist" only at the scale of the paragraph. Ours is not just an epistemological claim, but an ontological one: if style and themes and episodes exist in the form they do, it's because writers work at different scales – and do different things according to the level at which they are operating.
Historical scholarship on the sixteenth-century neo-scholastic debate about American Indians generally centers on the thought of Francisco de Vitoria. Focusing on Alfonso de Castro’s short treatise Utrum indigenae (1543), this paper challenges both an exclusive concentration on Vitoria as well as the received contention that the thought of the School of Salamanca rendered a single, unified view of Amerindians. In Utrum indigenae, Castro argued that American Indians should be instructed in liberal arts and theology thus constructing a strikingly different image of the peoples of the New World as compared to accounts by Vitoria or Francisco Suárez. While the historian Martin Nesvig has recently proposed an Erasmian humanist contextualization of Castro’s treatise, I argue that the image of American Indians presented in Utrum indigenae testifies to an alternative, novel way of writing about American Indians from within the framework of the School of Salamanca which has so far remained unnoticed.
We consider the continuous-time portfolio optimization problem of an investor with constant relative risk aversion who maximizes expected utility of terminal wealth. The risky asset follows a jump-diffusion model with a diffusion state variable. We propose an approximation method that replaces the jumps by a diffusion and solve the resulting problem analytically. Furthermore, we provide explicit bounds on the true optimal strategy and the relative wealth equivalent loss that do not rely on quantities known only in the true model. We apply our method to a calibrated affine model. Our findings are threefold: Jumps matter more, i.e. our approximation is less accurate, if (i) the expected jump size or (ii) the jump intensity is large. Fixing the average impact of jumps, we find that (iii) rare, but severe jumps matter more than frequent, but small jumps.
In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices. Investors face a trade-off between risk and return. At the benefit of a potentially higher return, they can entrust their money to a trader. However this investment is risky, as the trader might not be trustworthy. Alternatively, they can opt for a safe but low return. We study how subjects solve this trade-off when traders are either liable for losses or not, and when their bonuses are either capped or not. Limited liability introduces a conflict of interest because it makes traders value the asset more than investors. To limit losses, investors should thus restrict liquidity provision to force traders to trade at a lower price. By contrast, bonus caps make traders value the asset less than investors. This should encourage liquidity provision and decrease prices. In contrast to these predictions, we find that under limited liability investors contribute to asset price bubbles by increasing liquidity provision and that caps fail to tame bubbles. Overall, giving investors skin in the game fosters financial stability.
Do markets correct individual behavioral biases? In an experimental asset market, we compare the outcomes of a standard market economy to those of a an island economy that removed market interactions. We observe asset price bubbles in the market economy while prices are stable in the island economy. We also find that subjects took more risk following larger losses, resulting in larger prices and consistent with a gambling for resurrection motive. This motive can translate into bubbles in the market economy because higher prices increase average losses and thus reinforce the desire to resurrect. By contrast, the absence of such a strategic complementarity in island economies can explain the more stable outcome. These results suggest that markets do not correct behavioral biases, rather the contrary.
We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show that setting a visual anchor at the fundamental value (FV) in the first period only is sufficient to eliminate or to significantly reduce bubbles in laboratory asset markets. If no FV-anchor is set, bubble-crash patterns emerge. Our results indicate that bubbles in laboratory environments are primarily sparked in the first period. If prices are initiated around the FV, they stay close to the FV over the entire trading horizon. Our insights can be related to initial public offerings and the interaction between prices set on pre-opening markets and subsequent intra-day price dynamics.
We examine firms’ simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates between 1980 and 2014. We partition the sample according to the firms’ financial constraints and their needs to hedge against future shortfalls in operating income. In contrast to earlier work, our joint estimation approach shows that cash flows affect the corporate decisions of unconstrained firms more strongly than those of constrained firms. Investment-cash flow sensitivities are particularly intense for unconstrained firms with high hedging needs. Investment opportunities (as proxied by Q), however, play a larger role for constrained firms with the effects being strongest in case of low hedging needs. Interestingly, constrained firms with low hedging needs are found to employ more debt to finance their investment opportunities and build up significant cash holdings at the same time. Our results hence indicate overinvestment behavior for unconstrained firms but no underinvestment for constrained firms if they have low hedging needs.
In the ‘age of transnationalization’, spatial mobility is highly valued as a resource and accordingly ‘sedentariness’ is often symbolically devalued. Migration between Poland and Germany (mainly from Poland to Germany) has a century-long tradition. Not only has it yielded the emergence of a dense transnational social space, but is also considered as a re-enactor of cultural traits and symbolic meanings. Spatial mobility is tied to notions of social mobility and to projects of life-making. Since legal restrictions for Polish migrants seeking to work and settle in Germany have vanished, the quest for ‘normalcy’ has enhanced and pressures towards even more migration have increased. I argue that symbolic meanings of mobility are decisive for hierarchies in transnational social spaces. I have put main emphasize on families’ practices of caring for and caring about each other: the first being more a physical or material activity, while the latter is a more symbolic and emotional one. The interviews reveal that people draw multiple differentiations between migrant populations in terms of their migration reasons as well as between the mobile and the immobile. Those differentiations are embedded in the distinct feature of the transnational social space between Poland and Germany with assumed differences in terms of ‘modernity’. At the end the symbolic meanings of mobility also help explain the puzzle of why the emigration rates from Poland are constantly high, although Poland is a comparatively wealthy country.
Dieser Beitrag ist ein Besprechungsaufsatz zu Beatrice Brunhöbers 2010 erschienener Dissertation Die Erfindung „demokratischer Repräsentation“ in den Federalist Papers (Mohr Siebeck, Tübingen: Grundlagen der Rechtswissenschaft, Bd. 14), in der Brunhöber die innovative – und auch die Verfassungsentwicklung andernorts prägende – Kraft der Verbindung von Demokratie, politischer Repräsentation und Föderalismusidee durch die amerikanischen Verfassungsväter herausarbeitet. Auf der Basis von Brunhöbers Untersuchung geht es insbesondere darum, wie sich das von Hamilton, Madison und Jay entworfene ‚alte‘ Konzept zur Gestaltung eines starken Gemeinwesens (eingeschlossen das vertrauensbildende Prinzip der Gewaltenteilung) für einen integrativen Umgang mit den ‚modernen‘ Gegebenheiten pluralistischer Gesellschaften nutzbar machen läßt, im Blick die Gesamtheit (und Vielfalt) des Staatsvolkes als Geltungsfundament legitimer Herrschaft. Im Hintergrund steht die Frage nach Möglichkeiten zur Nutzbarmachung historischer Vergewisserungen für heutige Debatten überhaupt.
Some observers have conjectured that oil supply shocks in the United States and in other countries are behind the plunge in the price of oil since June 2014. Others have suggested that a major shock to oil price expectations occurred when in late November 2014 OPEC announced that it would maintain current production levels despite the steady increase in non-OPEC oil production. Both conjectures are perfectly reasonable ex ante, yet we provide quantitative evidence that neither explanation appears supported by the data. We show that more than half of the decline in the price of oil was predictable in real time as of June 2014 and therefore must have reflected the cumulative effects of earlier oil demand and supply shocks. Among the shocks that occurred after June 2014, the most influential shock resembles a negative shock to the demand for oil associated with a weakening economy in December 2014. In contrast, there is no evidence of any large positive oil supply shocks between June and December. We conclude that the difference in the evolution of the price of oil, which declined by 44% over this period, compared with other commodity prices, which on average only declined by about 5%-15%, reflects oil-market specific developments that took place prior to June 2014.
Although there is much interest in the future retail price of gasoline among consumers, industry analysts, and policymakers, it is widely believed that changes in the price of gasoline are essentially unforecastable given publicly available information. We explore a range of new forecasting approaches for the retail price of gasoline and compare their accuracy with the no-change forecast. Our key finding is that substantial reductions in the mean-squared prediction error (MSPE) of gasoline price forecasts are feasible in real time at horizons up to two years, as are substantial increases in directional accuracy. The most accurate individual model is a VAR(1) model for real retail gasoline and Brent crude oil prices. Even greater reductions in MSPEs are possible by constructing a pooled forecast that assigns equal weight to five of the most successful forecasting models. Pooled forecasts have lower MSPE than the EIA gasoline price forecasts and the gasoline price expectations in the Michigan Survey of Consumers. We also show that as much as 39% of the decline in gas prices between June and December 2014 was predictable.
Anleihen werden in der Regel in zahlreiche Teilschuldverschreibungen aufgespalten und diese an verschiedene Investoren verkauft. Dies begründet, der Zahl der umlaufenden Teilschuldverschreibungen entsprechend, jeweils unterschiedliche Schuldverhältnisse zwischen dem Emittenten und dem jeweiligen Investor. Hält ein Investor mehrere Teilschuldverschreibungen, so entstehen dementsprechend mehrere rechtlich voneinander zu unterscheidende Schuldverhältnisse mit gleichem Inhalt.1 Diese können jeweils ein unterschiedliches rechtliches Schicksal haben, z. B. getrennt voneinander übertragen werden. Sie können auch, von atypischen Gestaltungen abgesehen, je einzeln vom Gläubiger gekündigt werden, wenn die Anleihebedingungen insoweit keine Vorkehrungen treffen. Die folgenden Bemerkungen dazu befassen sich zunächst mit der umstrittenen Frage, ob auch eine Kündigung aus wichtigem Grund seitens eines Gläubigers gemäß §§ 490 Abs. 1, 314 BGB in Betracht kommt (im Folgenden I. - VII.)
The global financial crisis (as well as the European sovereign debt crisis) has led to a substantial redesign of rules and institutions – aiming in particular at underwriting financial stability. At the same time, the crisis generated a renewed interest in properly appraising systemic financial vulnerabilities. Employing most recent data and applying a variety of largely only recently developed methods we provide an assessment of indicators of financial stability within the Euro Area. Taking a “functional” approach, we analyze comprehensively all financial intermediary activities, regardless of the institutional roof – banks or non-bank (shadow) banks – under which they are conducted. Our results reveal a declining role of banks (and a commensurate increase in non-bank banking). These structural shifts (between institutions) are coincident with regulatory and supervisory reforms (implemented or firmly anticipated) as well as a non-standard monetary policy environment. They might, unintendedly, actually imply a rise in systemic risk. Overall, however, our analyses suggest that financial imbalances have been reduced over the course of recent years. Hence, the financial intermediation sector has become more resilient. Nonetheless, existing (equity) buffers would probably not suffice to face substantial volatility shocks.
In this paper, we examine how the institutional design affects the outcome of bank bailout decisions. In the German savings bank sector, distress events can be resolved by local politicians or a state-level association. We show that decisions by local politicians with close links to the bank are distorted by personal considerations: While distress events per se are not related to the electoral cycle, the probability of local politicians injecting taxpayers’ money into a bank in distress is 30 percent lower in the year directly preceding an election. Using the electoral cycle as an instrument, we show that banks that are bailed out by local politicians experience less restructuring and perform considerably worse than banks that are supported by the savings bank association. Our findings illustrate that larger distance between banks and decision makers reduces distortions in the decision making process, which has implications for the design of bank regulation and supervision.
This Paper gives an overview of the German banking system and current challenges it is facing. It starts with an overview of the so-called ‘Three-Pillar-Banking-System’ and a detailed description of the current structure of the banking system in Germany. A brief comparison of the banking system in Germany with the ones in other European countries points out its uniqueness. The consequences of the financial crisis of 2007/2008 and further challenges for the German banking system are discussed, as well as the the ongoing debate around the question whether the strong government involvement should be sustained.
In Südtirol wurde 2014 erstmals ein landesweiter Fahrradwettbewerb organisiert, der die Südtiroler Bevölkerung auf spielerische Weise davon überzeugen sollte, für Alltagswege auf das Fahrrad umzusteigen. Die 1.219 Teilnehmenden am Wettbewerb sind insgesamt mehr als 850.000 Kilometer geradelt. Diese Evaluation soll zeigen, ob der Fahrradwettbewerb eine erfolgreiche Maßnahme war, um den Radverkehr in Südtirol zu fördern, also ob tatsächlich eine Verlagerung vom motorisierten Individualverkehr auf den Radverkehr erreicht wurde. Der Erfolg ähnlicher Wettbewerbe wurde bislang vor allem in den Teilnehmer- und Kilometerzahlen gemessen, eine wissenschaftliche Evaluation der durch die Kampagnen erreichten (Verlagerungs-)Effekte fand bislang kaum statt. Die Evaluation des Südtiroler Fahrradwettbewerbs orientiert sich am MaxSumo-Leitfaden zur Evaluation von Mobilitätsmanagementmaßnahmen. Zusätzlich wurden die Motive und Wünsche der Teilnehmenden und Veranstalter herausgearbeitet und der Südtiroler Fahrradwettbewerb mit anderen Fahrradwettbewerben verglichen.
Low interest rates are becoming a threat to the stability of the life insurance industry, especially in countries such as Germany, where products with relatively high guaranteed returns sold in the past still represent a prominent share of the total portfolio. This contribution aims to assess and quantify the effects of the current low interest rate phase on the balance sheet of a representative German life insurer, given the current asset allocation and the outstanding liabilities. To do so, we generate a stochastic term structure of interest rates as well as stock market returns to simulate investment returns of a stylized life insurance business portfolio in a multi-period setting. Based on empirically calibrated parameters, we can observe the evolution of the life insurers’ balance sheet over time with a special focus on their solvency situation. To account for different scenarios and in order to check the robustness of our findings, we calibrate different capital market settings and different initial situations of capital endowment. Our results suggest that a prolonged period of low interest rates would markedly affect the solvency situation of life insurers, leading to a relatively high cumulative probability of default, especially for less capitalized companies. In addition, the new reform of the German life insurance regulation has a beneficial effect on the cumulative probability of default, as a direct consequence of the reduction of the payouts to policyholders.
This paper investigates systemic risk in the insurance industry. We first analyze the systemic contribution of the insurance industry vis-à-vis other industries by applying 3 measures, namely the linear Granger causality test, conditional value at risk and marginal expected shortfall, on 3 groups, namely banks, insurers and non-financial companies listed in Europe over the last 14 years. We then analyze the determinants of the systemic risk contribution within the insurance industry by using balance sheet level data in a broader sample. Our evidence suggests that i) the insurance industry shows a persistent systemic relevance over time and plays a subordinate role in causing systemic risk compared to banks, and that ii) within the industry, those insurers which engage more in non-insurance-related activities tend to pose more systemic risk. In addition, we are among the first to provide empirical evidence on the role of diversification as potential determinant of systemic risk in the insurance industry. Finally, we confirm that size is also a significant driver of systemic risk, whereas price-to-book ratio and leverage display counterintuitive results.
This paper investigates systemic risk in the insurance industry. We first analyze the systemic contribution of the insurance industry vis-à-vis other industries by applying 3 measures, namely the linear Granger causality test, conditional value at risk and marginal expected shortfall, on 3 groups, namely banks, insurers and non-financial companies listed in Europe over the last 14 years. We then analyze the determinants of the systemic risk contribution within the insurance industry by using balance sheet level data in a broader sample. Our evidence suggests that i) the insurance industry shows a persistent systemic relevance over time and plays a subordinate role in causing systemic risk compared to banks, and that ii) within the industry, those insurers which engage more in non-insurance-related activities tend to pose more systemic risk. In addition, we are among the first to provide empirical evidence on the role of diversification as potential determinant of systemic risk in the insurance industry. Finally, we confirm that size is also a significant driver of systemic risk, whereas price-to-book ratio and leverage display counterintuitive results.
Klimaschutz- und Anpassungsmaßnahmen : Zielkonflikte und Synergien mit dem Biodiversitätsschutz
(2015)
Der Klimawandel ist eine der größten Herausforderungen der Gegenwart und seine Auswirkungen auf Natur, Gesellschaft und Wirtschaft werden vielfach untersucht. Minderungs- wie auch Anpassungsmaßnahmen sind somit ein wichtiges Handlungsfeld geworden. Während der Einfluss des Klimawandels auf die Biodiversität bereits seit Längerem Gegenstand wissenschaftlicher Untersuchungen ist, rücken nun auch mögliche Folgen von Klimaschutz- und Anpassungsmaßnahmen auf die biologische Vielfalt in den Fokus der Forschung: So ist eine generelle Treibhausgasreduktion zwar prinzipiell förderlich, jedoch kann die Umsetzung der hierfür notwendigen Maßnahmen zu Zielkonflikten mit dem Biodiversitätsschutz führen. Gleichwohl gibt es Herangehensweisen, die Synergien beider Bereiche erkennen lassen.
Das Papier bietet einen Überblick über Maßnahmen des Klimaschutzes und der Klimawandelanpassung in den Bereichen Wald- und Forstwirtschaft, Moore, Landwirtschaft, nachwachsende Rohstoffe, Fließgewässer, Küsten und Meere. Diese werden mit Blick auf ihre möglichen (sowohl förderlichen als auch abträglichen) Auswirkungen auf die Biodiversität vorgestellt. Mit dieser problemorientierten Diskursfeldanalyse soll ein Beitrag geleistet werden, potentielle Zielkonflikte von Klima- und Biodiversitätsschutz zu erkennen und Synergien zu fördern.
In diesem Beitrag werden die Angaben aus der Beschäftigtenbefragung der GDA-Dachevaluation zum Thema Belastungen am Arbeitsplatz unter verschiedenen Aspekten ausgewertet. Insbesondere erfolgt eine Betrachtung der hessischen Daten, die den Ergebnissen der Gesamtstichprobe gegenübergestellt werden; weiterhin wird eine nach Branchen und Betriebsgrößen differenzierte Betrachtung dargestellt. Außerdem wird in bi- und multivariaten Modellen untersucht, welche Faktoren einen Einfluss auf die Belastungswahrnehmung haben.
In einem weiteren Schritt werden die Einschätzungen der Beschäftigten den Ergebnissen der Betriebsbefragung gegenübergestellt, um Unterschiede bzw. Ähnlichkeiten dieser beiden Gruppen hinsichtlich der Wahrnehmung der betrieblichen Situation zu betrachten.
Als wichtiges Ergebnis hat sich gezeigt, dass für die Beschäftigten die „Arbeit unter Zeitdruck“ den wesentlichen Belastungsfaktor darstellt. Neben diesem psychischen Belastungsfaktor spielen aber auch physisch-technische Belastungsfaktoren, d.h. schwere körperliche Arbeit und Umgebungsfaktoren, nach wie vor eine große Rolle. Erwartungsgemäß gibt es große Unterschiede hinsichtlich der wahrgenommenen Belastungen zwischen den Wirtschaftssektoren. In Hessen spielen Belastungen durch bewegungsarme Tätigkeiten eine deutlich größere Rolle als im Schnitt aller Länder.
Die Ergebnisse aus einer bi- beziehungsweise multivariaten Auswertung der Daten zeigen, dass neben der Branche auch die betrieblichen Arbeitsschutzaktivitäten einen nachweisbaren Einfluss auf die Belastungswahrnehmung der Beschäftigten haben. Weiterhin wird deutlich, dass die Beschäftigten in der Wahrnehmung der Belastung eine klare Unterscheidung zwischen physisch-technischen Belastungen und psychischen Faktoren treffen. Belastungen aus bewegungsarmen Tätigkeiten spielen insgesamt eine große Rolle, lassen sich aber eindeutig keinem dieser Belastungskomplexe zuordnen.
Aus der Gegenüberstellung der Befunde der Beschäftigtenbefragung mit den Ergebnissen der Befragung der Betriebe ergibt sich, dass Führungskräfte bzw. Expert/innen die betrieblichen Belastungskonstellationen anders wahrnehmen als die Beschäftigten: die Beschäftigten nehmen psychische Belastungen an einem deutlich höheren Anteil der Arbeitsplätze wahr, wohingegen die betrieblichen Vertreter/innen Belastungen nach wie vor eher im technischen Bereich sehen.
In the aftermath of the global financial crisis, both resolution planning, i.e. contingency planning by both regulated institutions and public authorities in order to prepare their actions in financial crisis, and concepts for structural bank reform have been identified as possible solutions to ending “Too Big To Fail” and foster market discipline among bank owners, bank managers and investors in bank debt. Both concepts thus complement the global quest for reliable procedures and tools for bank resolution that would minimise systemic implications once large and complex financial institutions have reached the stage of insolvency. Given the complex task of orchestrating swift and effective resolution actions, especially with regard to cross-border banking groups and financial conglomerates, planning ahead in good times has since been widely recognised as crucial for enhancing resolvability. At least part of the impediments to resolution will be found in organisational, financial and legal complexity that has evolved in banks and groups over time. To remove these impediments, interference with existing corporate and group structures is all but inevitable. However, in both international standard setting and at the European Union level, issues related to resolution planning (within the context of bank resolution reform) and structural banking reforms to date have been discussed rather separately. This lack of consistency is questionable, given the obvious need to reconcile both approaches in order to facilitate effective implementation and enforcement especially with regard to large, complex banking groups. Based on an analysis both of the Bank Recovery and Resolution Directive and the SRM Regulation, this paper explores how these problems could be dealt with within the context of the European Banking Union.
The creation of the Banking Union is likely to come with substantial implications for the governance of Eurozone banks. The European Central Bank, in its capacity as supervisory authority for systemically important banks, as well as the Single Resolution Board, under the EU Regulations establishing the Single Supervisory Mechanism and the Single Resolution Mechanism, have been provided with a broad mandate and corresponding powers that allow for far-reaching interference with the relevant institutions’ organisational and business decisions. Starting with an overview of the relevant powers, the present paper explores how these could – and should – be exercised against the backdrop of the fundamental policy objectives of the Banking Union. The relevant aspects directly relate to a fundamental question associated with the reallocation of the supervisory landscape, namely: Will the centralisation of supervisory powers, over time, also lead to the streamlining of business models, corporate and group structures of banks across the Eurozone?
Elementar für eine zukunftsfähige Verkehrsplanung ist eine möglichst detaillierte Kenntnis des Mobilitätsverhaltens der Bevölkerung in der Region. Zur Analyse des Mobilitätsverhaltens der Bevölkerung in Deutschland wurden in der Vergangenheit auf verschiedenen räumlichen Ebenen mehrere größtenteils voneinander unabhängige Datenerhebungen durchgeführt. Für die Region Frankfurt Rhein-Main besonders relevant sind dabei zum einen die Längsschnitt- bzw. Panelerhebungen des „Rhein-Main-Panels“ (RMP) und des „Deutschen Mobilitätspanels“ (MOP), zum anderen die Querschnittserhebungen der Befragung „Mobilität in Deutschland“ (MiD) und speziell für Frankfurt auch „Mobilität in Städten – SrV“ (SrV).
Ziel dieser Publikation ist es, diese vier unterschiedlichen Erhebungen in einem kurzen Vergleich vorzustellen. Dabei sollen die jeweiligen spezifischen Potentiale, aber auch Einschränkungen aufgezeigt werden, die diese Mobilitätsdatensätze bezüglich der Auswertung und weiteren Nutzung aufweisen. Danach werden in knapper Form mögliche Kombinationsmöglichkeiten dieser Datensätze untereinander, aber auch mit ergänzenden Datenbeständen dargestellt. Anschließend werden die aus den verschiedenen Mobilitätsdatensätzen ermittelten zentralen regionalen Mobilitätskennziffern in einem Vergleich veranschaulicht. Als Abschluss soll schließlich ein kurzer Blick auf mögliche Anwendungsfelder der Mobilitätsdaten in Politik und Planung geworfen werden.
The interbank market is important for the efficient functioning of the financial system, transmission of monetary policy and therefore ultimately the real economy. In particular, it facilitates banks' liquidity management. This paper aims at extending the literature which views interbank markets as mutual liquidity insurance mechanism by taking into account persistence of liquidity shocks. Following a theory of long-term interbank funding a financial system which is modeled as a micro-founded agent based complex network interacting with a real economic sector is developed. The model features interbank funding as an over-the-counter phenomenon and realistically replicates financial system phenomena of network formation, monetary policy transmission and endogenous money creation. The framework is used to carry out an optimal policy analysis in which the policymaker maximizes real activity via choosing the optimal interest rate in a trade-off between loan supply and financial fragility. It is shown that the interbank market renders the financial system more efficient relative to a setting without mutual insurance against persistent liquidity shocks and therefore plays a crucial role for welfare.
We investigate the effect of the tone of news on investor stock price expectations and beliefs. In an experimental study we ask subjects to estimate a future stock price for twelve real listed companies. As additional information we provide them with historical stock prices and extracts from real newspaper articles. We propose a way to manipulate the tone of news extracts without distorting its content. Subjects in different treatment groups read news items that are written either in positive or negative tone for each stock. We find that subjects tend to predict a significantly higher (lower) return for stocks after reading positive (negative) tone news. The effect is especially pronounced for stocks with poor past performance. Subjects are more likely to be optimistic (pessimistic) about the economy and to buy (sell) stocks after reading positive (negative) than negative (positive) tone news. Our results show that the news media might affect not only how investors perceive information, but also what they do in response to it.
n this paper we analyze an economy with two heterogeneous investors who both exhibit misspecified filtering models for the unobservable expected growth rate of the aggregated dividend. A key result of our analysis with respect to long-run investor survival is that there are degrees of model misspecification on the part of one investor for which there is no compensation by the other investor's deficiency. The main finding with respect to the asset pricing properties of our model is that the two dimensions of asset pricing and survival are basically independent. In scenarios when the investors are more similar with respect to their expected consumption shares, return volatilities can nevertheless be higher than in cases when they are very different.
Does exchange of information between tax authorities influence multinationals' use of tax havens?
(2015)
Since the mid-1990s, countries offering tax systems that facilitate international tax avoidance and evasion have been facing growing political pressure to comply with the internationally agreed standards of exchange of tax information. Using data of German investments in tax havens, we find evidence that the conclusion of a bilateral tax information exchange agreement (TIEA) is associated with fewer operations in tax havens and the number of German affiliates has on average decreased by 46% compared to a control group. This suggests that firms invest in tax havens not only for their low tax rates but also for the secrecy they offer.
We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and 'making the numbers'. We find no evidence in favor of the first two hypotheses, and provisionally accept the 'making the numbers' hypothesis that managers who are under pressure because of unrealistically optimistic earnings expectations by analysts and deteriorating real opportunities, will rely more heavily on debt financing to boost earnings per share and return on equity.
We model education as an investment in human capital that, like other investments, is appropriately evaluated in a framework that accounts for risk as well as return. In contrast to dominant wage-premia approach to calculating the returns to education, but which implicitly ignores risk, we evaluate the returns by treating the value of human capital as the price of a non-tradable risky asset. We do so using a lifecycle framework that incorporates risk preferences and earnings risk, as well as a progressive income tax and social insurance system. Our baseline estimate is that a college degree provides a $440K dollar increase in annual certainty-equivalent consumption. Although significantly smaller than traditional estimates of the value of education, these returns are still large enough to offset both the direct and indirect cost of college education for a large range of plausible preference parameters. Importantly, however, we find that accounting for risk reverses the finding from the education wage-premia literature regarding the trends in the returns to education. In particular, we find that the risk-adjusted gains from college completion actually decreased rather than increased in the recent period. Overall, our results show the importance of earnings risks in assessing the value of education.
Based on a sample of university students, we provide field and laboratory evidence that a small scale training intervention has a both statistically and economically significant effect on subjective and objective assessments of financial knowledge. We also show that for a large part of students whose self-assessed financial knowledge has improved we do not find an increase in their actual skills.
We analyze the macroeconomic implications of increasing the top marginal income tax rate using a dynamic general equilibrium framework with heterogeneous agents and a fiscal structure resembling the actual U.S. tax system. The wealth and income distributions generated by our model replicate the empirical ones. In two policy experiments, we increase the statutory top marginal tax rate from 35 to 70 percent and redistribute the additional tax revenue among households, either by decreasing all other marginal tax rates or by paying out a lump-sum transfer to all households. We find that increasing the top marginal tax rate decreases inequality in both wealth and income but also leads to a contraction of the aggregate economy. This is primarily driven by the negative effects that the tax change has on top income earners. The aggregate gain in welfare is sizable in both experiments mainly due to a higher degree of distributional equality.
We analyze the macroeconomic implications of increasing the top marginal income tax rate using a dynamic general equilibrium framework with heterogeneous agents and a fiscal structure resembling the actual U.S. tax system. The wealth and income distributions generated by our model replicate the empirical ones. In two policy experiments, we increase the statutory top marginal tax rate from 35 to 70 percent and redistribute the additional tax revenue among households, either by decreasing all other marginal tax rates or by paying out a lump-sum transfer to all households. We find that increasing the top marginal tax rate decreases inequality in both wealth and income but also leads to a contraction of the aggregate economy. This is primarily driven by the negative effects that the tax change has on top income earners. The aggregate gain in welfare is sizable in both experiments mainly due to a higher degree of distributional equality.
The European Commission has published a Green Paper outlining possible measures to create a single market for capital in Europe. Our comments on the Commission’s capital markets union project use the functional finance approach as a starting point. Policy decisions, according to the functional finance perspective, should be essentially neutral (agnostic) in terms of institutions (level playing field). Our main angle, from which we assess proposals for the capital markets union agenda, are information asymmetries and the agency problems (screening, monitoring) which arise as a result. Within this perspective, we make a number of more specific proposals.
The treatise "Contra malos divites et usurarios" (Cracovie, 1512) was the first of the renowned Polish anti-usurious texts which was not written by a university professor but by an official of the royal administration. Stanisław Zaborowski focuses, especially, on the problem of land of the royal domain given by kings to great landlords as a pledge, with harm to res publica. He applies the late medieval conciliarist notions to the issue of royal power. Nevertheless, the text diverges from the medieval thought. Zaborowski’ discourse does not focus on demonstrating the rightness of the anti-usurious principles but rather on convincing the readers to follow them in life. The argumentation is ‘addressed’ more to the will than to the reason; it focuses on the vice of avarice, more than on the Seventh Commandment; the author emphasizes the virtue of charity, more than on the virtue of justice. Anti-usurious Zaborowski’s thought made a part of his political vision. His discussed treatise is closely related with his more renowned Tractatus de natura iurium et bonorum regis. In Contra malos divites et usurarios, the problems of public debt and forced loan are of crucial importance. At present Marcin Bukała is preparing the critical edition of the treatise.
Die sog. Business Judgment Rule wurde durch Art. 1 Nr. 1a des UMAG1 auf entsprechende Vorschläge im Schrifttum2 als neuer § 93 Abs. 1 Satz 2 in das Aktiengesetz eingefügt. Der Sache nach war sie bereits zuvor in Rechtsprechung3 und Lehre4 anerkannt. Nach gängigem Verständnis soll die Business Judgment Rule einen „sicheren Hafen“ bieten, der Organmitglieder davor schützt, dass unternehmerische Misserfolge auf der Grundlage nachträglicher besserer Erkenntnis als Sorgfaltspflichtverstöße sanktioniert werden. Nach ganz überwiegen-der Auffassung beschränkt sich die Bedeutung von § 93 Abs. 1 Satz 2 AktG nicht darauf, durch ausdrückliche Regelung von Elementen der Sorgfaltspflicht klarzustellen, dass das Gesetz mit dem strengen Sorgfaltsmaßstab des ordentlichen und gewissenhaften Geschäftslei-ters nicht etwa eine Erfolgshaftung statuiert. Die Business Judgment Rule wird vielmehr als Privilegierung gegenüber dem ansonsten geltenden Haftungsmaßstab des § 93 Abs. 1 Satz 1 AktG verstanden. Ausdrückliche Stellungnahmen zur Wirkungsweise dieses Privilegs reichen von der Annahme eines der richterlichen Nachprüfung entzogenen unternehmerischen Ermes-sensspielraums5 über die Einordnung als unwiderlegliche Vermutung objektiv rechtmäßigen Verhaltens6 bis hin zu der Annahme, dass im Anwendungsbereich der Business Judgment Rule eine Haftung gegenüber der Gesellschaft nur ab der Grenze der groben Fahrlässigkeit in Betracht komme.7 Aber auch die zahlreichen Stellungnahmen, die sich nicht ausdrücklich zur Frage der Haftungserleichterung äußern, setzen eine privilegierende Wirkung der Business Judgment Rule voraus. Anderenfalls hätten die eingehenden Überlegungen zur Abgrenzung unternehmerischer von anderen, insbesondere rechtlich gebundenen Entscheidungen, für die offenbar ein strengerer Sorgfalts- und Haftungsmaßstab gelten soll, keinerlei praktische Bedeutung.
1.Hinsichtlich der Haftung von Organmitgliedern gegenüber der Gesellschaft für Fehlein-schätzungen der Rechtslage gilt kein anderer Maßstab als hinsichtlich der Haftung für Fehler bei unternehmerischen Entscheidungen (dazu sogleich, II).
2.Die Business Judgment Rule des § 93 Abs. 1 Satz 2 AktG enthält kein Haftungsprivileg; insbesondere stellt sie Organmitglieder nicht grundsätzlich von der Haftung für grobe Fahr-lässigkeit frei. Sie konkretisiert vielmehr lediglich die Sorgfaltsanforderungen an einen or-dentlichen und gewissenhaften Geschäftsleiter und stellt klar, dass dessen Haftung nicht mit nachträglicher besserer Erkenntnis begründet werden kann. Aus diesem Grund ist es unbe-denklich, dass sich die Haftung für unternehmerische, rechtliche und sonstige Fehler nach einheitlichen Haftungsgrundsätzen richtet (dazu unten, III.).
Capital maintenance rules are part of a legal capital regime that consists of rules on raising capital and rules on maintaining it. The function of these rules is the protection of the corporation’s creditors. This is evidenced by the fact that in public as well as private companies the provisions on legal capital are not open to disapplication or variation even with unanimous shareholder consent. Thus, providing the company with a minimum of funding and ensuring equal treatment of shareholders are mere reflexes of creditor protection or, at best, ancillary purposes of legal capital. Legal capital is part of a corporation’s equity. The key feature of equity is that it ranks behind the claims of other stakeholders in the distribution of a corporation’s assets. Consequently, equity will also be the first part of a corporation’s funds to be depleted by losses. Capital maintenance rules seek to enforce this order of priority of different groups of stakeholders by restricting distributions to shareholders. Such restrictions are not unique to legal systems that have adopted a legal capital regime. A prominent example of a statute that has eliminated mandatory legal capital is the Delaware General Corporation Law. § 154 DCGL leaves it up to the directors to decide whether any part of the consideration received by the corporation for its shares shall be attributed to capital. Thus, a Delaware corporation need not have any stated capital. This has significant impact on the funds available for distribution to shareholders. Pursuant to § 170 (a) DGCL dividends may only be paid out of surplus or, in the absence of surplus, out of net profits of the current or the preceding fiscal year. § 154 DGCL defines surplus as the excess of a corporation’s net assets over the amount of its capital, and net assets as the amount by which total assets exceed total liabilities. A corporation without stated capital may, therefore, distribute all of its net assets to its shareholders and continue business without any equity on its balance sheet. This highlights the difference between the different approaches to creditor protection in Germany and the U.S. Both legal systems acknowledge the priority of creditors over shareholders in corporate distributions. However, German law seeks to give creditors additional comfort by requiring companies to raise and maintain additional layers of assets above and beyond those corresponding to the company’s liabilities that may not be depleted by way of distributions to shareholders. While private companies must merely raise and maintain their stated capital, public companies are required to raise and maintain additional equity accounts unavailable for distributions to shareholders such as the share premium account1 and the legal reserve.2
In recent years a number of objections have been raised against this concept of creditor protection. Critics argue that contractual arrangements are a more efficient means for protecting the interests of creditors.3 Capital maintenance does not prevent creditors from negotiating for more stringent protection of their claims such as collateral or financial covenants. It does, however, provide a minimum standard of protection for the benefit of creditors who lack the commercial experience or the bargaining power or who, like tort victims, are simply unable to negotiate for contractual safeguards. Capital maintenance ensures that their protection against excessive distributions does not depend on large creditors who are free to waive covenants that, in effect, benefit all creditors in exchange for individual arrangements that work exclusively in their favour.
Im Kontext der Diskussion zur „Globalisierung des Managements“ und der daraus entstandenen These einer transnationalen Klasse untersuchen wir in diesem Beitrag den Stellenwert internationaler Berufserfahrung bei Bankvorständen in Deutschland und weltweit. Bisherige Forschungen (etwa Pohlmann 2009) argumentieren, dass bei den Top-100- Industrieunternehmen in den USA, Ostasien und Deutschland Karriereverläufe im mittleren und Spitzenmanagement kaum internationalisiert sind und Hauskarrieren die Regel seien. Unsere eigene explorative Untersuchung legt die Vermutung nahe, dass die Situation im deutschen sowie im globalen Bankensektor anders aussieht. Vor allem in Deutschland verlaufen die Top-Karrieren im Unterschied zu Industrieunternehmen deutlich internationaler, was auf andere personelle Konstellation im Feld des global vernetzten Finanzsektors hinweist. Im deutschen wie im globalen Finanzsektor könnten wir es hierbei mit dem Phänomen einer „Transnationalisierung ohne Migration“ zu tun haben.
In methodischer Hinsicht macht unsere Studie auf die Grenzen quantitativer Forschungsdesigns bei der Untersuchung internationaler Berufserfahrung und internationalen Arbeitspraxen aufmerksam. Daher plädieren wir für ein an die Kategorien der Bourdieu‘schen Sozialtheorie angelehntes qualitatives Forschungsdesign für die Untersuchung der Herausbildung einer globalen Klasse auf den globalisierten Finanzmärkten.
This paper1 investigates changes in the domestic work sector when passing from the informal to the formal labor market. The issue is explored within the context of the housework voucher policy (titres-services), which allows households to officially purchase weekly housework services from an authorized agency, through vouchers. This contribution has therefore a twofold focus: observing changes in labor market dynamics and investigating workers’ perception of this change. In order to discuss these issues, I will firstly look at the step from informal to formal labor market through two aspects: ethnic niches and individual labor dynamics – two bedrocks of Brussels domestic work market. Then, I will analyze workers’ personal experiences when acquiring a declared job in the voucher system.
Analyzing objective and subjective changes, a entral question of this article is to which extent the switch to the housework voucher system can bring empowerment to domestic workers. The sector work quality, in objective and subjective terms, has improved mainly by the setting of rules and by allowing workers to enjoy labor rights and a work status. The formal market dynamics of the housework voucher system remain, however, profoundly ethicized and marked by women’s presence, as was/is the shadow market.
The article shows that workers’ understanding of the transition from an informal to a formal sector is largely a result of their previous experiences and social position, mainly regarding migration status. This change will be thus much more assertive for workers who had their migrant status regularization and work formalization processes concomitantly, demonstrating that the most empowering shift is the one of acquiring papers, and not of entering declared work.
This paper analyzes sovereign risk shift-contagion, i.e. positive and significant changes in the propagation mechanisms, using bond yield spreads for the major eurozone countries. By emphasizing the use of two econometric approaches based on quantile regressions (standard quantile regression and Bayesian quantile regression with heteroskedasticity) we find that the propagation of shocks in euro's bond yield spreads shows almost no presence of shift-contagion. All the increases in correlation we have witnessed over the last years come from larger shocks propagated with higher intensity across Europe.
Estudio de la producción científica sobre la Escuela de Salamanca en los últimos años y perspectivas de futuro. Se plantea la dificultad de delimitación temporal de la Escuela y se propone la ampliación de su ámbito de estudio, no sólo a los temas tradicionales como la teología (moral, el problema del mal, la polémica De auxiliis), el derecho (el derecho natural y los derechos humanos, la soberanía, la guerra justa,…) y la economía (la propiedad privada, el dinero, el valor y el precio, el interés), sino también a problemas científicos sobre el espacio, el tiempo y otros.
Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this approach tends to yield implausibly large price elasticities. We demonstrate that anticipatory behavior provides an important explanation for this result. We provide evidence that gasoline buyers increase gasoline purchases before tax increases and delay gasoline purchases before tax decreases. This intertemporal substitution renders the tax instrument endogenous, invalidating conventional IV analysis. We show that including suitable leads and lags in the regression restores the validity of the IV estimator, resulting in much lower and more plausible elasticity estimates. Our analysis has implications more broadly for the IV analysis of markets in which buyers may store purchases for future consumption.
Adam Smith formulated a fundamental critique of economic growth in his philosophical oeuvre The Theory of Moral Sentiments, published in the year 1759. What might seem to be irony concerning the history of ideas – irony in the sense of the exclamation “he of all people” – is actually not irony at all. Smith wrote a substantial review of Rousseau’s Second Discourse, referring to Rousseau’s critique of commercial society. Additionally, one of the principal topics of Rousseau’s critique, the deformation of fundamental needs to passions in service of the satisfaction of self-love, is a major subject in Smith’s Theory of Moral Sentiments. But whereas Rousseau suggests egalitarian politics, Smith proposes individual stoicism: “In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.” Nevertheless, both authors and analysts of pre-capitalist society identify the difference between fundamental needs and desires as having been born out of comparison as both a source of unhappiness and of economic development.
Am 12. Januar 2015 schwärmten 58 ForscherInnen und Studierende, 31 aus Berlin, 27 aus Chemnitz, auf den Skatepark in der Dresdener Lingnerallee. Ziel der Aktion war es, mehr über die Proteste der "Patriotischen Europäer gegen die Islamisierung des Abendlandes" (Pegida) herauszufinden. Seit Oktober 2014 hatten sich in Dresden immer mehr Menschen unter diesem sperrigen Motto versammelt. Mit den Protesten wuchs auch die Kritik an den völkischen und rassistischen Deutungsmustern, die dort Raum griffen. Wer waren die Demonstrierenden? Was trieb sie auf die Straße? Wie verbreitet waren die Ressentiments, die in Reden, Sprechchören und auf Transparenten hör- und sichtbar waren? ...
No. And not only for the reason you think. In a world with multiple inefficiencies the single policy tool the central bank has control over will not undo all inefficiencies; this is well understood. We argue that the world is better characterized by multiple inefficiencies and multiple policy makers with various objectives. Asking the policy question only in terms of optimal monetary policy effectively turns the central bank into the residual claimant of all policy and gives the other policymakers a free hand in pursuing their own goals. This further worsens the tradeoffs faced by the central bank. The optimal monetary policy literature and the optimal simple rules often labeled flexible inflation targeting assign all of the cyclical policymaking duties to central banks. This distorts the policy discussion and narrows the policy choices to a suboptimal set. We highlight this issue and call for a broader thinking of optimal policies.
Increasing bike traffic in many European countries is a sign of a shift in planning paradigms towards more sustainable mobility cultures. It is also the result of 20 to 30 years of evolution and refinement in the training of urban and transport planners. Capacity development is therefore key when it comes to changing mobility cultures. Nevertheless, the day-to-day work of transport planners still focuses mostly on motorised traffic and the tasks of creating a smooth traffic flow, improving accessibility, and maintaining infrastructure. Cycling plays only a minor role, with efforts often still concentrated on the building of cycle lanes. The broader strategic goal of how to make urban mobility culture more sustainable – and within this the need to focus on cycling as an everyday mode of transport – is often neglected. Direct regulation is not possible when it comes to mobility cultures. Instead they represent a community-wide (communication) process that calls for a new planning paradigm: Besides the political will to establish a sustainable urban mobility culture, emphasis must also be placed on skills and training for urban and transport planners.
Savings accounts are owned by most households, but little is known about the performance of households’ investments. We create a unique dataset by matching information on individual savings accounts from the DNB Household Survey with market data on account-specific interest rates and characteristics. We document considerable heterogeneity in returns across households, which can be partly explained by financial sophistication. A one-standard deviation increase in financial literacy is associated with a 13% increase compared to the median interest rate. We isolate the usage of modern technology (online accounts) as one channel through which financial literacy has a positive association with returns.
Die Gründung der Universität durch jüdische Frankfurter Bürger ermöglichte es, in Frankfurt auch Juden, Liberale und Linke zu berufen. So entstand an der Juristischen Fakultät ein Lehrkörper, der liberalem Ideen sowie damals modernen Materien wie dem Völkerrecht, dem Arbeitsrecht und dem Wirtschaftsrecht gegenüber aufgeschlossen war. Dazu trug besonders die Einbeziehung kenntnisreicher Frankfurter Praktikerjuristen als Lehrbeauftragte und Honorarprofessoren bei. Diese Fakultät wurde 1933 zerschlagen. Nach 1945 konnte der Wiederaufbau mit wenigen Angehörigen der alten Fakultät unterstützt von einigen Neuberu-fungen beginnen. Dabei gaben prominente Persönlichkeiten wie Franz Böhm und Walter Hallstein der neuen Fakultät sofort wieder ein liberales Profil. Bei der Vergrößerung des Lehrkörpers durch Schaffung neuer Lehrstühle und erneute Einbeziehung von Praktikerjuristen bereicherten auch Vertreter moderner Rechtsmaterien die Fakultät. Die Studentenunruhe der Jahre 1968 ff. traf die Fakultät in der Phase eines Generationenwechels. Mit dem Plan einer einphasigen Juristenausbildung nach eigener Konzeption scheiterte der Fachbereich. Stattessen refor-mierte er das Lehrprogramm nach methodischen Kriterien. Die Studierendenzahlen nahmen ständig zu mit einem parallel dazu stetig wachsenden Anteil von Studierenden ausländischer Herkunft. Am Ende des 20. Jahrhunderts besaß der Frankfurter Fachbereich ein methodisch wie inhaltlich modernes, liberales Profil.
We build a novel leading indicator (LI) for the EU industrial production (IP). Differently from previous studies, the technique developed in this paper is able to produce an ex-ante LI that is immune to “overlapping information drawbacks”. In addition, the set of variables composing the LI relies on a dynamic and systematic criterion. This ensures that the choice of the variables is not driven by subjective views. Our LI anticipates swings (including the 2007-2008 crisis) in the EU industrial production – on average – by 2 to 3 months. The predictive power improves if the indicator is revised every five or ten years. In a forward-looking framework, via a general-to-specific procedure, we also show that our LI represents the most informative variable in approaching expectations on the EU IP growth.
El siguiente artículo presenta una reconstrucción del debate acerca de la condición teológico-política de los indios americanos en el siglo XVI. Se concentra, en particular, en uno de los elementos presentes en una controversia compleja: las opiniones sobre el paganismo de los pueblos "descubiertos" en América y en Asia. Luego de analizar las condenas por "idolatría" de los indios que encontramos en escritos de cronistas como López de Gómara o Fernández de Oviedo, se resumen los argumentos elaborados por maestros importantes de la Universidad de Salamanca (De Paz, Vitoria, Soto) para rechazar la forma confusa en la que estaban siendo planteados los dilemas teológicos surgidos tras el descubrimiento de los nuevos pueblos paganos. El trabajo hace énfasis también en la importancia del papel jugado por los teólogos salamantinos en un proceso más amplio de conceptualización de la naturaleza "inocente" de las "idolatrías" de los nativos americanos del que otros teólogos misioneros (Las Casas, Zumárraga,…) también fueron partícipes, aunque recurriendo a otros métodos y argumentos. Las secciones finales están dedicadas al estudio de la consolidación de los argumentos forjados por los teólogos salmantinos en el continuo debate sobre la evangelización y la dominación española sobre las Indias. Se retoman, en concreto, algunos escritos de dos figuras destacadas: Alonso de la Veracruz y Domingo de Salazar, para mostrar cómo, bajo la influencia de Vitoria y Soto, sus profesores en la Universidad de Salamanca, Veracruz y Salazar adaptaron algunas de sus ideas a los contextos misioneros de América y Asia.
We investigate the determinants of firms’ implicit insurance to employees, using a difference-in-difference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance across and within countries to gauge workers’ demand for insurance. Using a firm-level panel from 41 countries, we find that family firms feature more stable employment, greater wage flexibility and lower labor cost than non-family ones. Employment stability in family firms is greater, and the wage discount larger, in countries with more generous public unemployment insurance: private and public provision of employment insurance are substitutes.
We study the life cycle of portfolio allocation following for 15 years a large random sample of Norwegian households using error-free data on all components of households’ investments drawn from the Tax Registry. Both, participation in the stock market and the portfolio share in stocks, have important life cycle patterns. Participation is limited at all ages but follows a hump-shaped profile which peaks around retirement; the share invested in stocks among the participants is high and flat for the young but investors start reducing it as retirement comes into sight. Our data suggest a double adjustment as people age: a rebalancing of the portfolio away from stocks as they approach retirement, and stock market exit after retirement. Existing calibrated life cycle models can account for the first behavior but not the second. We show that incorporating in these models a reasonable per period participation cost can generate limited participation among the young but not enough exit from the stock market among the elderly. Adding also a small probability of a large loss when investing in stocks, produces a joint pattern of participation and of the risky asset share that resembles the one observed in the data. A structural estimation of the relevant parameters that target simultaneously the portfolio, participation and asset accumulation age profiles of the model reveals that the parameter combination that fits the data best is one with a relatively large risk aversion, small participation cost and a yearly large loss probability in line with the frequency of stock market crashes in Norway.
Most recent regulations establish that resolution of global banking groups shall be done according to bail-in procedures and following a Single Point of Entry (SPE) as opposed to a Multiple Point of Entry (MPE) approach. The latter requires parent holding of global groups to put up front the equity capital needed to absorb losses possibly emerging in foreign subsidiaries-branches. No model rationalized so far such resolution regime. We build a model of optimal design of resolution regimes and compare three regimes: SPE with cooperative authorities, SPE with non-cooperative authorities and MPE (ring-fencing). We find that the costs for bondholders of bail-inable instruments is generally higher under noncooperative regimes and ring-fencing. We also find that in those cases banks have ex ante incentives to reduce their exposure in foreign assets. We also examine recent case studies that help us rationalize the model results.
A theory of the boundaries of banks with implications for financial integration and regulation
(2015)
We offer a theory of the "boundary of the
rm" that is tailored to banking, as it builds on a single ine¢ ciency arising from risk-shifting and as it takes into account both interbank lending as an alternative to integration and the role of possibly insured deposit funding. Amongst others, it explains both why deeper economic integration should cause also greater financial integration through both bank mergers and interbank lending, albeit this typically remains ine¢ ciently incomplete, and why economic disintegration (or "desychronization"), as currently witnessed in the European Union, should cause less interbank exposure. It also suggests that recent policy measures such as the preferential treatment of retail deposits, the extension of deposit insurance, or penalties on "connectedness" could all lead to substantial welfare losses.
Ecolabels are frequently presented as consumer information tools that efficiently promote environmental aims such as the sustainability of fisheries. Two recent WTO dispute settlement cases -- Tuna II and COOL -- have called into question the characterisation of labels as ‘consumer information tools’ by illuminating the regulatory power and purposes of labelling. Tuna II moreover clarifies that WTO law does not necessarily privilege ecolabelling over more openly interventionist government measures aimed at environmental protection. In this contribution I first sketch two views of ecolabelling -- one that depicts ecolabelling as primarily aiming at consumer information and another that stresses the regulatory function of labelling. I then turn to the dispute settlement reports in Tuna II and COOL in order to specify the government authority involved in many labelling schemes. I conclude this contribution with the call for a critical assessment of ecolabelling. The power of ecolabelling may be employed to reshape markets and promote green growth. At the same time, however, it may consolidate a trend that places the consumer at the centre of initiatives for societal change and loses sight of potentially more radical transformations through the engagement of human beings as citizens.
Das Verhältnis von Zwangsvollstreckungs- und Verfassungsrecht ist nicht nur in Deutschland ein aktuelles Thema in der zivilprozessualen, verfassungsrechtlichen und (verfahrens-) rechtspolitischen Diskussion, wie die vorliegende Themenwahl der o.g. Jahrestagung der International Association of Procedural Law (IAPL) belegt. Ein Ausschnitt aus dieser Gesamtthematik ist Gegenstand dieses Nationalberichts aus der Perspektive des deutschen (Verfahrens-) Rechts, der unter dem Generalhema „Verfassung, Grundrechte und Vollstreckungsrecht“ insbesondere das „Spannungsverhältnis“ der kollidierenden Grundrechte von Vollstreckungsschuldner und -gläubiger behandelt.
IFRS 9 introduces new impairment rules responding to the G20 critique that IAS 39 results in the delayed and insufficient recognition of credit losses. In a case study of a Greek government bond for the period 2009 to 2011 when Greece’s credit rating declined sharply, this study highlights the discretion that preparers have when estimating impairments. IFRS 9 relies more on management expectations and will lead to earlier impairments. However, these appear still delayed and low if compared to the fair value losses.
Expectations of Sterling returning to Gold have been disregarded in empirical work on the US dollar – Sterling exchange rate in the early 1920s. We incorporate such considerations in a PPP model of the exchange rate, letting the probability of a return to gold follow a logistic function. We draw several conclusions: (i) the PPP model works well from spring 1919 to spring 1925; (ii) wholesale prices outperform consumer prices; (iii) allowing for a return to gold leads to a higher speed of adjustment of the exchange rate to PPP; (iv) interest rate differentials and the relative monetary base are crucial determinants of the expected return to gold; (v) the probability of a return to Gold peaked at about 72% in late 1924 and but fell to about 60% in early 1925; and (vi) our preferred model does not support the Keynes’ view that Sterling was overvalued after the return to gold.
Since the 1970s, the overarching view in the literature has been that a Phillips curve relationship did not exist in Ireland prior to the 1979 exchange rate break with Sterling. It was argued that, as a small open economy, prices were determined externally. To test this relationship, we study the determination of inflation between 1926 and 2012, a longer sample period than any previously used. We find that the difference between unemployment and the NAIRU is a significant determinant of inflation both in the full sample and in the subsamples spanning the periods before and after the Sterling parity link.
In this paper we assemble an annual data set on broad and narrow money, prices, real economic activity and interest rates in Ireland from a variety of sources for the period 1933-2012. We discuss in detail how the data set is constructed and what assumptions we have made to do so. Furthermore, we estimate a simple SVAR model to provide some empirical evidence on the behaviour of these time series. Money supply shocks appear to be the most important drivers of both money and prices. Interest rate shocks, which capture monetary policy, play an important role driving output and, of course, interest rates. The GDP shocks, which raise prices, seem of less importance.
This paper undertakes a quantitative investigation of the effects of anticipated inflation on the distribution of household wealth and welfare. Consumer Finance Data on household financial wealth suggests that about a third of the US population holds all its financial assets in transaction accounts. The remaining two-third of the US population holds most of their financial assets outside transaction accounts. To account for this evidence, I introduce a portfolio choice in a standard incomplete markets model with heterogeneous agents. I calibrate the model economy to SCF 2010 US data and use this environment to study the distributive effects of changes in anticipated inflation. An increase in anticipated inflation leads households to reshuffle their portfolio towards real assets. This crowding-in of supply for real assets lowers equilibrium interest rates and thereby redistributes wealth from creditors to borrowers. Because borrowers have a higher marginal utility, this redistribution improves aggregate welfare. First, this paper shows that inflation acts not only a regressive consumption tax as in Erosa and Ventura (2002), but also as a progressive tax. Second, this paper shows that the welfare cost of inflation are even lower than the estimates computed by Lucas (2000) and Ireland (2009). Finally, this paper offers insights into why deflationary environments should be avoided.
El propósito de este artículo es discutir, en un primero momento, en que medida los maestros vinculados a la Universidad de Salamanca y a su correspondiente Escuela de Salamanca contribuyeron para la validación de un saber relacionado a los descubrimientos que permitió pensar una nueva configuración geográfica de la Tierra. En un segundo momento, mostraremos como la universidad salmantina, junto con otras instituciones de saber, operaron como un centro de actividad ‘científica’ que estuve a servicio de los proyectos de la monarquía española.
Based on a cognitive notion of neo-additive capacities reflecting likelihood insensitivity with respect to survival chances, we construct a Choquet Bayesian learning model over the life-cycle that generates a motivational notion of neo-additive survival beliefs expressing ambiguity attitudes. We embed these neo-additive survival beliefs as decision weights in a Choquet expected utility life-cycle consumption model and calibrate it with data on subjective survival beliefs from the Health and Retirement Study. Our quantitative analysis shows that agents with calibrated neo-additive survival beliefs (i) save less than originally planned, (ii) exhibit undersaving at younger ages, and (iii) hold larger amounts of assets in old age than their rational expectations counterparts who correctly assess their survival chances. Our neo-additive life-cycle model can therefore simultaneously accommodate three important empirical findings on household saving behavior.
Der Bundesgerichtshof hat mit Urteil vom 28. Januar 2015 entschieden, dass Kinder, die durch künstliche Befruchtung im Wege einer Samenspende gezeugt worden sind, gegen Reproduktionsmediziner und -kliniken einen Anspruch auf Auskunft über die Identität des Samenspenders haben können. Die Geltendmachung des Auskunftsanspruchs setzte kein bestimmtes Mindestalter der „Spenderkinder“ voraus. Der nachfolgende Beitrag analysiert die Konstruktion dieses Anspruchs vor dem Hintergrund eines durch neue Reproduktionstechnologien und gewandelte gesellschaftliche Vorstellungen veränderten Abstammungsrechts. Nach Methodenkritik und Rekonstruktion aus einer gesellschaftlich-institutionellen Perspektive eröffnen sich weitere Aussichten auf zukünftige Formen von Vaterschaft und ein entsprechend zu verwirklichendes Recht auf Kenntnis der eigenen Abstammung.
In the mid-1990s, institutional investors entered the syndicated loan market and started to serve borrowers as lead arrangers. Why are non-banks able to compete for this role against banks? How do the composition of syndicates and loan pricing differ among lead arrangers? By using a dataset of 12,847 leveraged loans between 1997 and 2012, I aim to answer these questions. Non-banks benefit from looser regulatory requirements, have industry expertise which helps them in the screening and monitoring of borrowers and focus on firms that ask for loans only instead of additional cross-selling of other services. I can show that non-banks specialize on more opaque and less experienced borrowers, are more likely than banks to choose participants that help to reduce potentially higher information asymmetries and earn 105 basis points more than banks.
Although banks are at the center of systemic risk, there are other institutions that contribute to it. With the publication of the leveraged lending guideline in March 2013, the U.S. regulators show that they are especially worried about the private equity firms with their high-risk deals. Given these risks and the interconnectedness of the banks through the LBO loan syndicates, I shed light on the impact of a bank’s LBO loan exposure on its systemic risk. By using 3,538 observations between 2000 and 2013 from 165 global banks, I show that banks with higher LBO exposure also have a higher level of systemic risk. Other loan purposes do not show this positive relationship. The main drivers influencing this relationship positively are the bank’s interconnectedness to other LBO financing banks and its size. Lending experience with a specific PE sponsor, experience with leading LBO syndicates or a bank’s credit rating, however, lead to a lower impact of the LBO loan exposure on systemic risk.
This paper analyzes the influence Leveraged Buyouts (LBOs) have on the operating performance of the LBO target companies’ direct competitors. A unique and hand-collected data set on LBOs in the United States in the period 1985-2009 allows us to analyze the effects different restructuring activities as part of the LBO have on the competitors’ revenues. These restructuring activities include changes to leverage, governance, or operating business, as well as M&A activities of the LBO target company. We find that although LBOs itself have a negative influence on competitors’ revenue growth, some restructuring mechanisms might actually benefit competing companies.
Kapitalanleger wie Versicherungsnehmer werden oft konfrontiert mit komplexen Produkten und nicht durchschaubaren Unternehmensstrukturen der Anbieter. Gleichzeitig stellt die mögliche Nichterfüllung ihrer Ansprüche häufig ein existenzielles Risiko dar. Deshalb ist es Ziel der Finanzregulierung, Rahmenbedingungen im Finanzdienstleistungsbereich zu schaffen, die wirtschaftliche Abläufe gewährleisten und gleichzeitig den Konsumenten schützen. Dem Nutzen der Regulierung stehen aber auch Risiken gegenüber, die im diesem Artikel am Beispiel der Versicherungsregulierung dargelegt werden.
Investors and insurance policyholders are often confronted with complex products and providers' opaque organisational structures. At the same time, the possibility that their claims will not be honoured often poses an existential risk. Financial regulation therefore aims at putting in place a financial services framework that will safeguard market processes whilst also protecting consumers. However, benefits of regulation are accompanied by certain risks, as can be exemplified with the case of insurance regulation.
The Liikanen Group proposes contingent convertible (CoCo) bonds as instruments to enhance financial stability in the banking industry. Especially life insurance companies could serve as CoCo bond holders as they are already the largest purchasers of bank bonds in Europe. The growing number of banks issuing CoCo bonds leads to a rising awareness of these hybrid securities among life insurers as they are increasingly looking for higher?yielding investments into bond?like asset classes during the current low interest rate period. Our contribution provides an insight for life insurance companies to understand the effects of holding CoCo bonds as implied by the Solvency II standards that will become effective by 2016.
This paper studies a two-country production economy with complete and frictionless financial markets and international trade of final goods in which competition in R&D leads to endogenous new firm creation and economic growth. Current monopolists ("incumbents") and potential new firms ("entrants") compete in developing patents domestically. I find that this induces negative spillover in consumption, i.e. home country's consumption decreases in response to positive productivity shocks in the foreign country. Second, there is positive spillover in R&D expenditures, i.e. home country's R&D expenditures increase in response to positive foreign productivity shocks, which is consistent with empirical evidence on international technology diffusion. Furthermore, the stylized fact in international macroeconomics that the cross-country correlation of consumption growth is significantly lower than the one of output growth is explained by the model. Fourth, net exports are negatively correlated with output as in the data. Fifth, the model matches the high comovement of the risk-free rates and stock returns across countries. Finally, the model produces a positive value premium.
Von Februar bis Juni 2015 hat die Europäische Zentralbank (EZB) die Notfall-Liquiditätshilfen (emergency liquidity assistance, ELA) für griechische Banken von 50 auf etwa 90 Milliarden Euro ausgeweitet. Dies hat zu einer Diskussion unter Wissenschaftlern, Politikern und Praktikern geführt, ob diese Liquiditätshilfen rechtmäßig sind. Es wurde der Vorwurf erhoben, die EZB trage bewusst zu einer Konkursverschleppung der bereits insolventen griechischen Banken bei.
Wir nehmen diesen Vorwurf zum Anlass, die Grundsätze des ELA-Programms genauer zu betrachten und die Frage zu diskutieren, ob das Programm in der aktuellen Situation rechtmäßig war. Zunächst beschreiben wir hierfür aus finanzwirtschaftlicher Perspektive die komplexe Beziehung zwischen der Europäischen Union, der EZB und den griechischen Banken. Dabei gehen wir insbesondere auf die wirtschaftspolitischen Grundsätze einer Währungsunion mit einer unvollständigen Fiskalunion (oder Haushaltskonsolidierung) ein. Vor diesem Hintergrund analysieren wir dann die Entscheidung der EZB, weiterhin Liquiditätshilfen an griechische Banken bereitzustellen. Wir kommen zu dem Ergebnis, dass das Vorgehen der EZB nicht als Konkursverschleppung zu bezeichnen ist.
The European Central Bank (ECB) increased the emergency liquidity assistance (ELA) for Greek banks from €50 billion in February 2015 to approximately €90 billion in June 2015. Its actions were accompanied by a discussion among academics, politicians and practitioners regarding the legitimacy of the ELA. Some have even accused the ECB of deliberately delaying the bankruptcy filing of already insolvent Greek banks.
We take the claim regarding insolvency delay as an opportunity to highlight the underlying economics of the ELA program and discuss its legitimacy in the current situation. We start by characterizing the complex interrelationship of the European Union, the ECB and the Greek banks through the lens of financial economics, with a particular focus on the political economy of a monetary union with incomplete fiscal union (or fiscal consolidation). Combining these two issues, we examine the decision of the ECB to continue the provision of ELA to Greek banks. Our conclusions, drawn from the analysis, do not support the claim that the ECB’s actions are consistent with a delayed filing for insolvency.
We present an accessible narrative of the Turkish economy since its great 2001 crisis. We broadly survey economic developments and pay particular attention to monetary policy. The data suggests that the Central Bank of Turkey was a strong inflation targeter early in this period but began to pay less attention to inflation after 2009. Loss of the strong nominal anchor is visible in the break we estimate in Taylor-type rules as well as in asset prices. We also argue that recent discrete jumps in Turkish asset prices, especially the exchange value of the lira, are due more to domestic factors. In the post-2009 period the Central Bank was able to stabilize expectations and asset prices when it chose to do so, but this was the exception rather than the rule.
This paper studies the life cycle consumption-investment-insurance problem of a family. The wage earner faces the risk of a health shock that significantly increases his probability of dying. The family can buy long-term life insurance that can only be revised at significant costs, which makes insurance decisions sticky. Furthermore, a revision is only possible as long as the insured person is healthy. A second important feature of our model is that the labor income of the wage earner is unspanned. We document that the combination of unspanned labor income and the stickiness of insurance decisions reduces the long-term insurance demand significantly. This is because an income shock induces the need to reduce the insurance coverage, since premia become less affordable. Since such a reduction is costly and families anticipate these potential costs, they buy less protection at all ages. In particular, young families stay away from long-term life insurance markets altogether. Our results are robust to adding short-term life insurance, annuities and health insurance.
This paper studies a dynamic stochastic general equilibrium model involving climate change. Our model allows for damages on economic growth resulting from global warming. In the calibration, we capture effects from climate change and feedback effects on the temperature dynamics. We solve for the optimal state-dependent abatement policy. In our simulations, the costs of this policy measured in terms of lost GDP growth are moderate. On the other hand, postponing abatement action could reduce the probability that the climate can be stabilized. For instance, waiting for 10 years reduces this probability from 60% to 30%. Waiting for another 10 years leads to a probability that is less than 10%. Finally, doing nothing opens the risk that temperatures might explode and economic growth decreases significantly.
When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations. We derive the equilibrium dynamics in closed form and show that joint presence of both risks leads to over-proportional risk exposure for households. This implies that the whole benefit from insurance through social security is greater than the sum of the benefits from insurance against each of the two risks in isolation. We measure this through interaction effects which appear even though the two risks are orthogonal by construction. While the interactions unambiguously increase the welfare benefits from insurance, they can in- or decrease the welfare costs from crowding out of capital formation. The net effect depends on the relative strengths of the opposing forces.
We propose a multivariate dynamic intensity peaks-over-threshold model to capture extreme events in a multivariate time series of returns. The random occurrence of extreme events exceeding a threshold is modeled by means of a multivariate dynamic intensity model allowing for feedback effects between the individual processes. We propose alternative specifications of the multivariate intensity process using autoregressive conditional intensity and Hawkes-type specifications. Likewise, temporal clustering of the size of exceedances is captured by an autoregressive multiplicative error model based on a generalized Pareto distribution. We allow for spillovers between both the intensity processes and the process of marks. The model is applied to jointly model extreme returns in the daily returns of three major stock indexes. We find strong empirical support for a temporal clustering of both the occurrence of extremes and the size of exceedances. Moreover, significant feedback effects between both types of processes are observed. Backtesting Value-at-Risk (VaR) and Expected Shortfall (ES) forecasts show that the proposed model does not only produce a good in-sample fit but also reliable out-of-sample predictions. We show that the inclusion of temporal clustering of the size of exceedances and feedback with the intensity thereof results in better forecasts of VaR and ES.
There is a large, but yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This paper reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. In particular, we contribute to the question of how member states may be willing to enter into a stronger fiscal union if the evolution of this union may imply large redistribution under incomplete contracting. We discuss clawback mechanisms that have been suggested in the literature, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.
There is a growing debate about complementing the European Monetary Union by a more comprehensive fiscal union. Against this background, this paper emphasizes that there is a trade-off in designing a system of fiscal transfers ("fiscal capacity") in a union between members of different size. A system cannot guarantee symmetric treatment of members and simultaneously ensure a balanced budget. We compute hypothetical transfers for the Eurozone members from 2001 to 2012 to illustrate this trade-off. Interestingly, a symmetric system that treats shocks in small and large countries symmetrically would have produced large budgetary surpluses in 2009, the worst year of the financial crisis.
A number of recent studies regress a "narratively" identified measure of a macroeconomic shock directly on an outcome variable. In this note, we argue that this approach can be viewed as the reduced-form regression of an instrumental variable approach in which the narrative time series is used as an instrument for an endogenous series of interest. This motivates evaluating the validity of narrative measures through the lens of a randomized experiment. We apply our framework to four recently constructed narrative measures of tax shocks by Romer and Romer (2010), Cloyne (2013), and Mertens and Ravn (2012). All of them turn out to be weak instruments for observable measures of taxes. After correcting for weak instruments, we find that using any of the considered narrative tax measures as an instrument for cyclically adjusted tax revenues yields tax multiplier estimates that are indistinguishable from zero. We conclude that the literature currently understates the uncertainty associated with quantifying the tax multiplier.
Signaling cooperation
(2015)
We examine what an applicant’s vita signals to potential employers about her willingness to cooperate in teams. Intensive social engagement may credibly reveal that an applicant cares about the well-being of others and therefore is less likely to free-ride in teamwork situations. We find that contributions in a public goods game strongly increase in a subject’s degree of social engagement as indicated on her résumé (and rated by an independent third party). Engagement in other domains, such as student or sports associations, is not positively correlated with contributions. In a prediction experiment with human resource managers from various industries, we find that managers use résumé content effectively to predict relative differences in subjects’ willingness to cooperate. Thus, young professionals signal important behavioral characteristics to potential employers through the choice of their extracurricular activities.
This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor’s degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice. The innovation is to model in detail how students progress towards a college degree. The model is calibrated using transcript and financial data. We find that more than half of college entrants can predict whether they will graduate with at least 80% probability. As a result, stylized policies that insure students against the financial risks associated with uncertain graduation have little value for the majority of college entrants.
Challenging voluntary CSR-initiatives – a case study on the effectiveness of the Equator Principles
(2015)
The Equator Principles (EPs) are a voluntary and self-regulatory Corporate Social Responsibility (CSR) initiative in the field of project finance. The EPs provide a number of principles to businesses to reduce the negative impacts of lending practices linked to environment-damaging projects. The paper argues that the actual impact of the EPs even now as revised version is still limited. This is due to their voluntary nature and their lack of adequate governance mechanisms, that is, enforcement, monitoring and sanctioning. With the help of RepRisk, which provides a database capturing third-party criticism as well as a company’s or project’s exposure to controversial socio-environmental issues, the paper evaluates the on-the-ground performances of the two ‘Equator banks’ Barclays and JPMorgan Chase and compares their performance with the one of the two non-Equator banks Deutsche Bank and UBS. The paper shows that the EPs do not have a substantial influence on the broader CSR-performance of multinational banks due to the EPs’ limited scope – focusing mainly on project finance – and the (still) existing various loopholes, grey areas and discretionary leeway. The paper also gives an overview of the main institutional shortcomings of the EPs and their association and discusses some potential reform steps which should be taken to further strengthen and ‘harden’ this ‘soft law’ EP-framework. The paper thus argues in favor of (more) mandatory and legally binding rules and standards at the transnational level to overcome the EPs’ ‘voluntariness bias’.
Empirical credit demand analysis undertaken at the aggregate level obscures potential behavioral heterogeneity between various borrowing sectors. Looking at disaggregated data and analyzing bank loans to non-financial companies, to financial companies, to households for consumption and for house purchases separately with respect to a common set of macroeconomic determinants may facilitate more accurate empirical relationships and more reliable insights for economic policy. Using quarterly Euro area panel data between 2003 and 2013, empirical evidence for heterogeneity in borrowing behavior across sectors and the credit cycle with respect to interest rates, output and house prices is found. The results motivate sector-specific, counter-cyclical capital requirements.
We show that the size of collateralized household debt determines an economy’s vulnerability to crises of confidence. The house price feeds back on itself by contributing to a liquidity effect, which operates through the value of housing in a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally entertainable belief-weightings of multiple future prices. This delivers debt-level-dependent bounds on the extent to which confidence may drive house prices and aggregate consumption.
Our paper evaluates recent regulatory proposals mandating the deferral of bonus payments and claw-back clauses in the financial sector. We study a broadly applicable principal agent setting, in which the agent exerts effort for an immediately observable task (acquisition) and a task for which information is only gradually available over time (diligence). Optimal compensation contracts trade off the cost and benefit of delay resulting from agent impatience and the informational gain. Mandatory deferral may increase or decrease equilibrium diligence depending on the importance of the acquisition task. We provide concrete conditions on economic primitives that make mandatory deferral socially (un)desirable.
Globale Finanzplätze im Vergleich : Frankfurt und Sydney zwischen Global City und lokaler Variation
(2015)
Frankfurt und Sydney sind international bedeutende Knotenpunkte des Global- Cities-Netzwerks. Als transnationale Finanzzentren erreichen sie im Global Financial Centres Index (GFCI) ähnliche Platzierungen. Populäre Rankings wie der GFCI entfalten ihre Wirkungsmacht in einem politischen Diskurs, der die Konkurrenz von Finanzzentren in einem hierarchischen Städtenetzwerk betont und so die Orientierung an den Champions der Finanzmetropolen forciert. Der hier vorgenommene kontrastive Vergleich Frankfurts und Sydneys zeigt hingegen, dass die stark von Globalisierungs- und Finanzialisierungstendenzen beeinflussten Städte sich nicht einfach einem Idealtypus von Global Cities angleichen. Vielmehr sorgt die Einbettung in unterschiedliche Entwicklungslinien – im Falle Frankfurts in die Tradition einer koordinierten Marktwirtschaft, im Falle Sydneys in die Tradition einer liberalen Marktwirtschaft – für die Ausbildung von Finanzsystemen mit unterschiedlichem Charakter und unterschiedlicher Reichweite. So weist der Finanzplatz Frankfurt im Vergleich mit Sydney eine starke globale Vernetzung auf, wenngleich die Merkmale der koordinierten Marktwirtschaft - geringere Börsenkapitalisierung der Unternehmen, einer primär kreditbasierten Unternehmensfinanzierung und geringere Finanzmarktorientierung der Bevölkerung nachwirken. Demgegenüber profitiert der Finanzstandort Sydney von einer durchwegs finanzialisierten Ökonomie, was sich in der Finanzmarktorientierung von Unternehmen und jener der allgemeinen Bevölkerung ausdrückt, weist aber eine stärkere Binnenorientierung, also die Fokussierung auf den nationalen Markt auf.
Debates about climate-induced migratory movements – and their possible links to instability and conflict – along with the discussion on migration flows across the Mediterranean Sea frequently highlight the West African Sahel as a region of concern. However, findings from recent empirical research on Sahelian regions in Mali and Senegal suggest no evidence for increasing population movements towards Europe as a direct result of environmental stress and climate change. It is the patterns of migration that are changing and not so much the volume. A closer look at the social-ecological conditions of migration in the Sahel allows for an alternative characterization of the problem dynamics. It reveals a rich and comprehensive picture of mobility and the importance of climate and environment in this respect, and identifies starting points for policy options.
Untersucht wird aus verfassungsrechtlicher und kriminal-politischer Sicht, ob auch in Deutschland das Tragen einer Vollverschleierung (Burka, Niqab u.ä.) im öffentlichen Raum mit strafrechtlichen Mitteln verboten werden könnte. Obwohl derartige Praktiken mit dem Grundsatz der Geschlechtergleichheit und den Grundlagen einer offenen Bürgergesellschaft kollidieren, spricht sich die Verf. im Ergebnis gegen ein strafrechtliches Verbot aus.