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A new governance architecture for european financial markets? Towards a european supervision of CCPs
(2018)
Does the new European outlook on financial markets, as voiced by the EU Commission since the beginning of the Capital Market Unions imply a movement of the EU towards an alignment of market integration and direct supervision of common rules? This paper sets out to answer this question for the case of common supervision for Central Counterparties (CCPs) in the European Union. Those entities gained crucial importance post-crisis due to new regulation which requires the mandatory clearing of standardized derivative contracts, transforming clearing houses into central nodes for cross-border financial transactions. While the EU-wide regulatory framework EMIR, enacted in 2012, stipulates common regulatory requirements, the framework still relies on home-country supervision of those rules, arguably leading to regulatory as well as supervisory arbitrage. Therefore, the regulatory reform to stabilize the OTC derivatives market replicated at its center a governance flaw, which had been identified as one of the major causes for the gravity of the financial crisis in the EU: the coupling of intense competition based on private risk management systems with a national supervision of European rules. This paper traces the history of this problem awareness and inquires which factors account for the fact that only in 2017 serious negotiations at the EU level ensued that envisioned a common supervision of CCPs to fix the flawed system of governance. Analyzing this shift in the European governance architecture, we argue that Brexit has opened a window of opportunity for a centralization of supervision for CCPs. Brexit aligns the urgency of the problem with material interests of crucial political stakeholder, in particular of Germany and France, providing the possibility for a grand European bargain.
Improving financial conditions of individuals requires an understanding of the mechanisms through which bad financial decision-making leads to worse financial outcomes. From a theoretical point of view, a key candidate inducing mistakes in financial decision-making are so called present-biased preferences, which are one of the cornerstones of behavioral economics. According to theory, present-biased households should behave systematically different when it comes to consumption and saving decisions, as they should be more prone to spending too much and saving too little.
In this policy letter we show how high frequency financial transaction data available in digitized form allows to precisely categorize individual financial-decision making to be present-biased or not. Using this categorization, we find that one out of five individuals in our sample exhibits present-bias and that this present-biased behavior is associated with a stronger use of overdrafts. As overdrafts represent a particularly expensive way of short-term borrowing, their systematic use can be interpreted as a measure of suboptimal financial-decision making. Overall, our results indicate that the combination of economic theory and Big Data is able to generate valuable insights with applications for policy makers and businesses alike.
Ludwig van Beethoven im Film
(2018)
Sissi im Film
(2018)
Die Straßen deutscher Städte werden überwiegend vom Automobil dominiert, was nicht nur die gebaute Umwelt prägt, sondern auch die politischen Entscheidungen beeinflusst, wenn es um die Verteilung des Straßenraumes geht. Dass jedoch am Anfang der Mobilität das Zufußgehen steht und ein gut geplanter städtischer Fußverkehr nicht nur einen Beitrag zur Sicherheit der Fußgänger*innen leistet, sondern auch die Zukunft urbaner Mobilität gewährleistet, wird oft vergessen. Obwohl der Fußverkehr zahlreiche Potentiale bietet, bekommt er im öffentlichen Raum deutlich weniger Entfaltungsspielraum zur Verfügung gestellt. Die Zufußgehenden werden dort häufig kanalisiert und an den Rand gedrängt, was Einfluss auf ihr Verhalten nimmt. Diese Marginalisierung der Fußgänger*innen wird zusätzlich hervorgerufen durch eine geringe Beachtung jener in der städtischen Planung und Politik sowie in der Wissenschaft und Gesellschaft. Demnach stehen sie im Konfliktverhältnis zur persistenten und sozial konstruierten Struktur der Straße.
Die vorliegende Untersuchung überprüft, warum die Fortbewegung zu Fuß in der gebauten Straßenumwelt und ihrer Raumaufteilung im Vergleich zu anderen Verkehrsmitteln eine untergeordnete Rolle spielt und welchen Einfluss der planerische und politische Umgang und die Gestaltung des Straßenraumes darauf nimmt. Dies geschieht mittels eines Fallbeispiels in Frankfurt am Main, der Schweizer Straße. Im Rahmen der Studie werden Ergebnisse aus teilnehmenden Beobachtungen der Zufußgehenden der Schweizer Straße und deren Verhaltensweisen im öffentlichen Straßenraum sowie aus qualitativen Interviews mit Expert*innen der gebauten Straßenumwelt Frankfurts zusammengetragen. Das übergeordnete Ziel der Arbeit ist, ein Verständnis für die Wechselwirkung zwischen Raumstruktur, planerischem Einfluss und Mobilität zu entwickeln sowie die Konflikte der Raumaufteilung für die Fußgänger*innen herauszuarbeiten, um den Fußverkehr gezielter fördern zu können.
We develop a model that reproduces the average return and volatility spread between sin and non-sin stocks. Our investors do not necessarily boycott sin companies. Rather, they are open to invest in any company while trading off dividends against ethicalness. We show that when dividends and ethicalness are complementary goods and investors are sufficiently risk averse, the model predicts that the dividend share of sin companies exhibits a positive relation with the future return and volatility spreads. Our empirical analysis supports the model's predictions.
In the last decade, central bank interventions, flights to safety, and the shift in derivatives clearing resulted in exceptionally high demand for high quality liquid assets, such as German treasuries, in the securities lending market besides the traditional repo market activities. Despite the high demand, the realizable securities lending income has remained economically negligible for most beneficial owners. We provide empirical evidence of pricing inefficiencies in the non-transparent, oligopolistic securities lending market for German treasuries from 2006 to 2015. Consistent with Duffie, Gârleanu and Pedersen (2005)’s theory, we find that the less connected market participants’ interests are underrepresented, evident in the longer maturity segment, where lenders are more likely to be conservative passive investors, such as pension funds and insurance firms. The low price elasticity in this segment hinders these beneficial owners to fully capitalize on the additional income from securities lending, giving rise to important negative welfare implications.
In this study we investigate which economic ideas were prevalent in the macroprudential discourse post-crises in order to understand the availability of ideas for reform minded agents. We base our analysis on new findings in the field of ideational shifts and regulatory science, which posit that change-agents engage with new ideas pragmatically and strategically in their effort to have their economic ideas institutionalized. We argue that in these epistemic battles over new regulation, scientific backing by academia is the key resource determining the outcome. We show that the present reforms implemented internationally follow this pattern. In our analysis we contrast the entire discourse on systemic risk and macroprudential regulation with Borio’s initial 2003 proposal for a macroprudential framework. We find that mostly cross-sectional measures targeted towards increasing the resilience of the financial system rather than inter-temporal measures dampening the financial cycle have been implemented. We provide evidence for the lacking support of new macroprudential thinking within academia and argue that this is partially responsible for the lack of anti-cyclical macroprudential regulation. Most worryingly, the financial cycle is largely absent in the academic discourse and is only tacitly assumed instead of fully fledged out in technocratic discourses, pointing to the possibility that no anti-cyclical measures will be forthcoming.
Im Mittelpunkt Deutsch
(2018)
This paper gives an account of the unmaking of Soviet workers at the Vernissage in Armenia. I argue that the unmaking of Soviet workers, first, is the irrelevance of Soviet workers as workers once they lost their jobs after the collapse of the Soviet Union and came to the Vernissage to trade. During the Soviet period, private trade was forbidden, and the Soviet government persecuted people who dared to engage in it. Consequently, many people grew up thinking of trade as a criminal activity that was non-productive and parasitic, as opposed to productive work that facilitated the modernization of the USSR. After the dissolution of the USSR, when trade was liberalized and many former Soviet workers were pushed into trade as they lost their jobs, it still retained its quality of not being “real” work, to borrow Roberman’s (2013) wording. Even 25 years after the dissolution of the USSR, former Soviet workers at the Vernissage still want to be identified with their former Soviet occupations and not with trade. However, now engaged in trade, former Soviet workers came up with a “new” way of establishing identity and hierarchy—through production. I describe this “new” way as “the identification game”; employing it, I demonstrate how former Soviet workers at the Vernissage identify and represent themselves as masters, whose work is productive and intellectual. In doing so, they single out resellers, people who resell the work of other masters, by implying that their work is parasitic and selfish. However, this “identification game” is reified only by the older generation of traders, former Soviet workers. The younger generation of traders at the Vernissage, which does not have any experience of being Soviet workers, is disengaged from it, thus undermining the Soviet view of trade as not “real” work and making it irrelevant in the postsocialist era. Thus, I contend that the unmaking of Soviet workers consists in, first, their irrelevance as workers in a postsocialist period, and second, the irrelevance of their ideas about trade as not “real” work. Furthermore, to support my depiction of a master who engages in “the identification game” and a younger-generation trader who is disengaged from it, I give two ethnographic portraits of traders at the Vernissage. I assert that the disengagement of a younger generation of traders at the Vernissage signals a change in the perception of trade as “real” work and runs parallel to the unmaking of Soviet workers.