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Das Forschungsprojekt KviAPol (Körperverletzung im Amt durch Polizeibeamte und -beamtinnen) untersucht polizeiliche Gewaltanwendungen, die aus Sicht der Betroffenen rechtswidrig waren, mittels quantitativer Online-Befragung sowie die polizeiliche, justizielle und zivilgesellschaftliche Perspektive auf rechtswidrige Polizeigewalt und deren Aufarbeitung in Deutschland mittels qualitativer Interviews. Zum Team gehören die Wissenschaftlichen Mitarbeiterinnen Laila Abdul-Rahman, Hannah Espín Grau und Luise Klaus sowie Prof. Dr. Tobias Singelnstein, der die Projektleitung innehat.
Cryptocurrencies provide a unique opportunity to identify how derivatives impact spot markets. They are fully fungible, trade across multiple spot exchanges at different prices, and futures contracts were selectively introduced on bitcoin (BTC) exchange rates against the USD in December 2017. Following the futures introduction, we find a significantly greater increase in cross-exchange price synchronicity for BTC--USD relative to other exchange rate pairs, as demonstrated by an increase in price correlations and a reduction in arbitrage opportunities and volatility. We also find support for an increase in price efficiency, market quality, and liquidity. The evidence suggests that futures contracts allowed investors to circumvent trading frictions associated with short sale constraints, arbitrage risk associated with block confirmation time, and market segmentation. Overall, our analysis supports the view that the introduction of BTC--USD futures was beneficial to the bitcoin spot market by making the underlying prices more informative.
Using granular supervisory data from Germany, we investigate the impact of unconventional monetary policies via central banks’ purchase of corporate bonds. While this policy results in a loosening of credit market conditions as intended by policy makers, we document two unintended side effects. First, banks that are more exposed to borrowers benefiting from the bond purchases now lend more to high-risk firms with no access to bond markets. Since more loan write-offs arise from these firms and banks are not compensated for this risk by higher interest rates, we document a drop in bank profitability. Second, the policy impacts the allocation of loans among industries. Affected banks reallocate loans from investment grade firms active on bond markets to mainly real estate firms without investment grade rating. Overall, our findings suggest that central banks’ quantitative easing via the corporate bond markets has the potential to contribute to both banking sector instability and real estate bubbles.
The dissertation explores to what extent the post-financial crisis EU resolution regime, based on equity/debt write-down and conversion powers and bail-in tools will be effective in maintaining the stability of bank groups. To arrive at its unique angle, it first asks why bank groups are considered complex, thereby explaining the reasons for their proliferation and instability, and how this may inform the view regarding a desired regulatory framework. The main observation the dissertation makes is that, notwithstanding of other factors already pointed out in the literature, bank groups adopt complex structures with multiple entities, as it allows them, inter alia, to use double-leverage financing structures and internal capital markets.
Double-leverage financing structures allow bank groups to optimise the combination of their debt/equity funding from external parent entity investors with a combination of debt/equity funding downstreamed internally to subsidiaries and other entities in the bank group. An important component within this structure is also that the allocation of the bank group’s resources takes place through the internal capital market (ICM). The allocation of resources via the ICM allows bank groups to manage their liquidity constraint either to undertake activities that are more profitable, or to stabilise the financial position of the group as a whole.
While both double leverage and ICMs can optimise the funding and allocation of resources of the bank group, respectively, they can also generate perils to the stability of the bank group. In particular, this is because double-leverage can result in excessive risk taking and regulatory arbitrage. Moreover, the allocation of the intra-group resources in the ICM may not maintain the financial health of all subsidiaries in the bank group, which can prove to be incompatible with the financial stability goals of the regulators in the countries where those subsidiaries conduct their business.
Within this context, the dissertation argues that the current EU resolution regime does not clearly address issues of double leverage when setting out capital and other liability requirements, i.e. the ‘Total Loss Absorbing Capacity’ (TLAC) and ‘Minimum Requirement for Eligible Liabilities’ (MREL) requirements. Moreover, the dissertation emphasis that it is equally relevant to clarify the way in which the bank group resources are available ahead of, and in financial distress. It is argued that to this end, bank groups need to be allowed to make use of the ICM as it is often uncertain what may be the cause of the financial distress and how the resources of the bank group could be used to stabilise it. To this end, the dissertation highlights that there is lack of clarity in both the ex-ante provisions on intra-group support framework and in the ex-post provisions governing the allocation of any surplus TLAC/MREL resources.
Besides the ‘intra-group’ issues within the bank group, the third point the dissertation makes relation to the bank group’s presence in multiple jurisdictions. This transnational element adds to the complexity of the intra-group issues resulting from sub-optimal cooperation between home and host authorities. In this regard, the dissertation underlines that the current framework could adopt a more balanced way in which the regulatory fora will take into account the interest of the authorities of all parts of the bank group.
The loan impairment rules recently introduced by IFRS 9 require banks to estimate their future credit losses by using forward-looking information. We use supervisory loan-level data from Germany to investigate how banks apply their reporting discretion and adjust their lending upon the announcement of the new rules. Our identification strategy exploits a cut-off for the level of provisions at the investment grade threshold based on banks’ internal rating of a borrower. We find that banks required to adopt the new rules assign better internal ratings to exactly the same borrowers compared to banks that do not apply IFRS 9 around this cut-off. This pattern is consistent with a strategic use of the increased reporting discretion that is inherent to rules requiring forward-looking loss estimation. At the same time, banks also reduce their lending exposure to exactly those borrowers at the highest risk of experiencing a rating downgrade below the cutoff. These loans would be associated with additional provisions in future periods, both in the intensive and extensive margin. The lending change thus mitigates some of the negative effects of increased reporting opportunism on banks’ crisis resilience. However, when these firms with internal ratings around the investment grade cut-off obtain less external funding through banks, the introduction of IFRS 9 will likely also be associated with real economic effects
We investigate the impact of uneven transparency regulation across countries and industries on the location of economic activity. Using two distinct sources of regulatory variation—the varying extent of financial-reporting requirements and the staggered introduction of electronic business registers in Europe—, we consistently document that direct exposure to transparency regulation is negatively associated with the focal industry’s economic activity in terms of inputs (e.g., employment) and outputs (e.g., production). By contrast, we find that indirect exposure to supplier and customer industries’ transparency regulation is positively associated with the focal industry’s economic activity. Our evidence suggests uneven transparency regulation can reallocate economic activity from regulated toward unregulated countries and industries, distorting the location of economic activity.
Lack of privacy due to surveillance of personal data, which is becoming ubiquitous around the world, induces persistent conformity to the norms prevalent under the surveillance regime. We document this channel in a unique laboratory---the widespread surveillance of private citizens in East Germany. Exploiting localized variation in the intensity of surveillance before the fall of the Berlin Wall, we show that, at the present day, individuals who lived in high-surveillance counties are more likely to recall they were spied upon, display more conformist beliefs about society and individual interactions, and are hesitant about institutional and social change. Social conformity is accompanied by conformist economic choices: individuals in high-surveillance counties save more and are less likely to take out credit, consistent with norms of frugality. The lack of differences in risk aversion and binding financial constraints by exposure to surveillance helps to support a beliefs channel.
Resolving financial distress where property rights are not clearly defined: the case of China
(2022)
We use data on financially distressed Chinese companies in order to study a debt market where property rights are crudely defined and poorly enforced. To help with identification we use an event where a business-friendly province published new guidelines regarding the administration and enforcement of assets pledged as collateral. Although by no means a comprehensive reform of bankruptcy law or property rights, by instructing courts to enforce existing, albeit rudimentary, contractual rights the new guidelines virtually eliminated creditors runs and produced a sharp increase in the survival rate of financially-distressed companies. These changes illustrate how piecemeal reforms of property rights and their enforcement may have a significant impact on economic outcomes. Our analysis and results challenge the view that a fully fledged system of private property is a precondition for economic development.
Das Europäische Asylverfahren ist wieder mal einer enormen Belastungsprobe ausgesetzt. An der Grenze zwischen Polen und Belarus spielen sich seit Monaten dramatische Szenen ab, das Recht auf Asyl der Schutzsuchenden ist faktisch ausgesetzt und die polnische Regierung reagiert mit verschärften Maßnahmen und baut eine Mauer. Der folgende Beitrag kommentiert und ordnet rechtlich die aktuelle Situation an der polnischen Grenze ein.