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We analyze older individuals’ debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, in the HRS we examine three different cohorts (individuals age 56–61) in 1992, 2004, and 2010 to evaluate cross-cohort changes in debt over time. We also use two waves of the NFCS (2012 and 2015) to gain additional insights into debt management and older individuals’ capacity to shield themselves against shocks. We show that recent cohorts have taken on more debt and face more financial insecurity, mostly due to having purchased more expensive homes with smaller down payments.
The growth and popularity of defined contribution pensions, along with the government’s increasing attention to retirement plan costs and investment choices provided, make it important to understand how people select their retirement plan investments. This paper shows how employees in a large firm altered their fund allocations when the employer streamlined its pension fund menu and deleted nearly half of the offered funds. Using administrative data, we examine the changes in plan participant investment choices that resulted from the streamlining and how these changes might affect participants’ eventual retirement wellbeing. We show that streamlined participants’ new allocations exhibited significantly lower within-fund turnover rates and expense ratios, and we estimate this could lead to aggregate savings for these participants over a 20-year period of $20.2M, or in excess of $9,400 per participant. Moreover, after the reform, streamlined participants’ portfolios held significantly less equity and exhibited significantly lower risks by way of reduced exposures to most systematic risk factors, compared to their non-streamlined counterparts.
The long-run consumption risk model provides a theoretically appealing explanation for prominent asset pricing puzzles, but its intricate structure presents a challenge for econometric analysis. This paper proposes a two-step indirect inference approach that disentangles the estimation of the model's macroeconomic dynamics and the investor's preference parameters. A Monte Carlo study explores the feasibility and efficiency of the estimation strategy. We apply the method to recent U.S. data and provide a critical re-assessment of the long-run risk model's ability to reconcile the real economy and financial markets. This two-step indirect inference approach is potentially useful for the econometric analysis of other prominent consumption-based asset pricing models that are equally difficult to estimate.
Die Verknüpfung des Fahrrades mit dem Öffentlichen Verkehr (ÖV) kann den Umweltverbund stärken, den Übergang von einem Verkehrssystem auf das andere erleichtern und eine attraktive Alternative zum motorisierten Individualverkehr schaffen. Die vorliegende Arbeit repräsentiert den ersten umfassenden Projektbericht innerhalb des Forschungsprojektes „Verbesserte Integration des Fahrrads in den öffentlichen Verkehr – Systematische Erschließung von Handlungsoptionen und Bewertung von Best-Practices“. Ziel dieser Publikation ist eine aktuelle Aufarbeitung des Standes der Forschung und der Praxis zu diesem Thema.
Nach einer systematischen Darstellung wichtiger Forschungsstränge, werden zunächst Ergebnisse aus dem „Mobilität in Deutschland“-Datensatz hinsichtlich intermodaler Rad‐ÖV‐Nutzungsmuster präsentiert. Aufbauend darauf werden Datengrundlagen und generelle Erfordernisse an Erhebungsmethoden diskutiert, um die inter- und multimodale Verkehrsmittelnutzung tatsächlich beurteilen zu können. Die Darstellung des aktuellen Standes in der Praxis wird anhand von drei Schwerpunkt-Feldern vorgenommen: Bike and Ride Abstellanlagen an Haltestellen des ÖV, Radmitnahme in den Fahrzeugen des ÖV und Fahrradverleihsysteme. Dabei werden sowohl infrastrukturelle Maßnahmen als auch Betreiberkonzepte und Marketingaspekte behandelt. Ein weiteres Kapitel beschäftigt sich mit den Chancen und Herausforderungen im Zuge der fortschreitenden Digitalisierung und der Verbreitung von mobilen Endgeräten.
Der Beitrag ist der urheberrechtlichen Einordnung des sog. Internet Protocol Television (IPTV) gewidmet. In einem ersten Abschnitt werden technische, organisatorisch-wirtschaftliche und juristische Unterschiede zwischen dieser Übertragungstechnologie und dem sog. Internet-TV herausgearbeitet. Sodann wird nach Maßgabe der SatCabRL 93/83 geprüft, ob die Ausübungsregeln der §§ 20b, 87 V UrhG nur für klassisches Kabelfernsehen oder auch für IPTV gelten. Das Ergebnis lautet, dass IPTV unter die §§ 20b, 87 V UrhG fällt, soweit sein Einsatz nach der AKM-Entscheidung des EuGH überhaupt eine erlaubnispflichtige öffentliche Wiedergabe darstellt.
The EU Collective Redress Recommendation has invited Member States to introduce collective redress mechanisms by 26 July 2015. The well-known reservations claim potentially abusive litigation and potential settlement of not well-founded claims resulting from controversial funding of cases by means of contingency fees and from ‘opt-out’ class action procedures. The paper posits that there may also be some fear that the European Commission may try to pursue the enforcement of its regulatory agenda in this way at the expense of individual claimants’ interests. Therefore a comparative analysis is carried out to see to what extent concerns about individual rights as opposed to regulatory goals are reflected in the different newly revised systems in place across Europe. As an iterim result the Dutch settlement procedure for mass damage claims, the English Group Litigation Order and the German test case procedure turn out to be relatively well-suited to deal with mass damage claims. At the same time, none of them can quite reach an optimal balance between individual rights and regulatory goals and therefore each of them is subject to criticism. That is why the further question is raised in how far these procedures could complement each other, thus contributing to the enforcement of individual rights without overregulating markets in Europe.
The bail-in tool as implemented in the European bank resolution framework suffers from severe shortcomings. To some extent, the regulatory framework can remedy the impediments to the desirable incentive effect of private sector involvement (PSI) that emanate from a lack of predictability of outcomes, if it compels banks to issue a sufficiently sized minimum of high-quality, easy to bail-in (subordinated) liabilities. Yet, even the limited improvements any prescription of bail-in capital can offer for PSI’s operational effectiveness seem compromised in important respects.
The main problem, echoing the general concerns voiced against the European bail-in regime, is that the specifications for minimum requirements for own funds and eligible liabilities (MREL) are also highly detailed and discretionary and thus alleviate the predicament of investors in bail-in debt, at best, only insufficiently. Quite importantly, given the character of typical MREL instruments as non-runnable long-term debt, even if investors are able to gauge the relevant risk of PSI in a bank’s failure correctly at the time of purchase, subsequent adjustment of MREL-prescriptions by competent or resolution authorities potentially change the risk profile of the pertinent instruments. Therefore, original pricing decisions may prove inadequate and so may market discipline that follows from them.
The pending European legislation aims at an implementation of the already complex specifications of the Financial Stability Board (FSB) for Total Loss Absorbing Capacity (TLAC) by very detailed and case specific amendments to both the regulatory capital and the resolution regime with an exorbitant emphasis on proportionality and technical fine-tuning. What gets lost in this approach, however, is the key policy objective of enhanced market discipline through predictable PSI: it is hardly conceivable that the pricing of MREL-instruments reflects an accurate risk-assessment of investors because of the many discretionary choices a multitude of agencies are supposed to make and revisit in the administration of the new regime. To prove this conclusion, this chapter looks in more detail at the regulatory objectives of the BRRD’s prescriptions for MREL and their implementation in the prospectively amended European supervisory and resolution framework.
This paper analyses the bail-in tool under the BRRD and predicts that it will not reach its policy objective. To make this argument, this paper first describes the policy rationale that calls for mandatory PSI. From this analysis the key features for an effective bail-in tool can be derived. These insights serve as the background to make the case that the European resolution framework is likely ineffective in establishing adequate market discipline through risk-reflecting prices for bank capital. The main reason for this lies in the avoidable embeddedness of the BRRD’s bail-in tool in the much broader resolution process which entails ample discretion of the authorities also in forcing private sector involvement. Finally, this paper synthesized the prior analysis by putting forward an alternative regulatory approach that seeks to disentangle private sector involvement as a precondition for effective bank-resolution as much as possible form the resolution process as such.
This paper analyzes the relationship between monetary policy and financial stability in the Banking Union. There is no uniform global model regarding the relationship between monetary policy-making on the one hand, and prudential supervision on the other. Before the crisis, EU Member States followed different approaches, some of them uniting monetary and supervisory functions in one institution, others assigning them to different, neatly separated institutions. The financial crisis has underlined that monetary policy and prudential supervision deeply affect each other, especially in case of systemic events. Even in normal times, monetary and supervisory decisions might conflict with each other. After the crisis, some jurisdictions have moved towards a more holistic approach under which monetary policy takes supervisory considerations into account, while supervisory decisions pay due regard to monetary policy.
The Banking Union puts prudential supervision in the hands of the European Central Bank (ECB), the institution responsible for monetary policy. Nevertheless, at its establishment there was the political understanding that the ECB should follow a policy of meticulous separation in the discharge of its different functions. This raises the question whether the ECB may pursue a holistic approach to monetary policy and supervisory decision-making, respectively. On the basis of a purposive reading of the monetary policy mandate and the SSM Regulation, the paper answers this question in the affirmative. Effective monetary policy (or supervision) requires financial stability (or smooth monetary policy transmission). Moreover, without a holistic approach, the SSM Regulation is more likely to provoke the adoption of mutually defeating decisions by the Governing Board. The reputation of the ECB would suffer considerably under such a situation – in a field where reputation is of paramount importance for effective policy.
As any meticulous separation between monetary and supervisory functions turns out to be infeasible, the paper explores the reasons. Parting from Katharina Pistor’s legal theory of finance, which puts the emphasis on exogenous factors to explain the (non)enforcement of legal rules, the paper suggests a legal instability theorem which focuses on endogenous reasons, such as law’s indeterminacy, contextuality, and responsiveness to democratic deliberation. This raises the question whether the holistic approach would be democratically legitimate under the current framework of the ESCB. The idea of technocratic legitimacy that exempts the ECB from representative structures is effectively called into question by the legal instability theorem. This does not imply that the independence of the ECB should be given up, as there are no viable alternatives to protect monetary policy against the time inconsistency problem. Rather, any solution might benefit from recognizing the ECB in its mixed technocratic and political shape as a centerpiece of European integration and improving.