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Previously we reported modulation of endothelial prostacyclin and interleukin-8 production, cyclooxygenase-2 expression and vasorelaxation by oleoyl-lysophosphatidylcholine (LPC 18:1). In the present study, we examined the impact of this LPC on nitric oxide (NO) bioavailability in vascular endothelial EA.hy926 cells. Basal NO formation in these cells was decreased by LPC 18:1. This was accompanied with a partial disruption of the active endothelial nitric oxide synthase (eNOS)-dimer, leading to eNOS uncoupling and increased formation of reactive oxygen species (ROS). The LPC 18:1-induced ROS formation was attenuated by the superoxide scavenger Tiron, as well as by the pharmacological inhibitors of eNOS, NADPH oxidases, flavin-containing enzymes and superoxide dismutase (SOD). Intracellular ROS-formation was most prominent in mitochondria, less pronounced in cytosol and undetectable in endoplasmic reticulum. Importantly, Tiron completely prevented the LPC 18:1-induced decrease in NO bioavailability in EA.hy926 cells. The importance of the discovered findings for more in vivo like situations was analyzed by organ bath experiments in mouse aortic rings. LPC 18:1 attenuated the acetylcholine-induced, endothelium dependent vasorelaxation and massively decreased NO bioavailability. We conclude that LPC 18:1 induces eNOS uncoupling and unspecific superoxide production. This results in NO scavenging by ROS, a limited endothelial NO bioavailability and impaired vascular function.
Bacterial porin disrupts mitochondrial membrane potential and sensitizes host cells to apoptosis
(2009)
The bacterial PorB porin, an ATP-binding beta-barrel protein of pathogenic Neisseria gonorrhoeae, triggers host cell apoptosis by an unknown mechanism. PorB is targeted to and imported by host cell mitochondria, causing the breakdown of the mitochondrial membrane potential (delta psi m). Here, we show that PorB induces the condensation of the mitochondrial matrix and the loss of cristae structures, sensitizing cells to the induction of apoptosis via signaling pathways activated by BH3-only proteins. PorB is imported into mitochondria through the general translocase TOM but, unexpectedly, is not recognized by the SAM sorting machinery, usually required for the assembly of beta-barrel proteins in the mitochondrial outer membrane. PorB integrates into the mitochondrial inner membrane, leading to the breakdown of delta psi m. The PorB channel is regulated by nucleotides and an isogenic PorB mutant defective in ATP-binding failed to induce delta psi m loss and apoptosis, demonstrating that dissipation of delta psi m is a requirement for cell death caused by neisserial infection.
The relevant field of interest in High Energy Physics experiments is shifting to searching and studying extremely rare particles and phenomena. The search for rare probes requires an increase in the number of available statistics by increasing the particle interaction rate. The structure of the events also becomes more complicated, the multiplicity of particles in each event increases, and a pileup appears. Due to technical limitations, such data flow becomes impossible to store fully on available storage devices. The solution to the problem is the correct triggering of events and real-time data processing.
In this work, the issue of accelerating and improving the algorithms for reconstruction of the charged particles' trajectories based on the Cellular Automaton in the STAR experiment is considered to implement them for track reconstruction in real-time within the High-Level Trigger. This is an important step in the preparation of the CBM experiment as part of the FAIR Phase-0 program. The study of online data processing methods in real conditions at similar interaction energies allows us to study this process and determine the possible weaknesses of the approach.
Two versions of the Cellular Automaton based track reconstruction are discussed, which are used, depending on the detecting systems' features. HFT~CA Track Finder, similar to the tracking algorithm of the CBM experiment, has been accelerated by several hundred times, using both algorithm optimization and data-level parallelism. TPC~CA Track Finder has been upgraded to improve the reconstruction quality while maintaining high calculation speed. The algorithm was tuned to work with the new iTPC geometry and provided an additional module for very low momentum track reconstruction.
The improved track reconstruction algorithm for the TPC detector in the STAR experiment was included in the HLT reconstruction chain and successfully tested in the express production for the online real data analysis. This made it possible to obtain important physical results during the experiment runtime without the full offline data processing. The tracker is also being prepared for integration into a standard offline data processing chain, after which it will become the basic track search algorithm in the STAR experiment.
This article focuses on the ius theutonicum Magdeburgense, its meaning and functions, attempting to understand what ius theutonicum meant for contemporaries. It starts with the present interpretation of the term. This is followed by a detailed analysis of the available medieval privileges for Magdeburg law issued for towns in Galician Rus’. The result was not an identification or "reconstruction" of a particular "law" or combination of different "laws" adopted in town courts of Galician Rus’ under the term ius theutonicum. It was rather the recognition that the notion called ius theutonicum in medieval documents was an adaptable pattern applicable to different conditions, a model with many variants or a general set of principles which was filled with real content and adapted to concrete circumstances.
Alman Anayasası velilere, öğrencilere ve dinî cemaatlere eğitim alanında haklar ve yetkiler tanımaktadır. Buna göre veliler ve öğrenciler doğrudan hak sahibi iken dinî cemaatler bu hakkın devletle birlikte taşıyıcısı ve uygulayıcısıdır. Anayasa; devletin, din dersi verme sorumluluğunu dinî cemaatlerle paylaşması gerektiğini ve din derslerini, dinî cemaatlerle uyum, anlaşma ve iş birliği içerisinde vermek zorunda olduğunu hükme bağlamıştır. Bu bağlamda din derslerinin, Devlet’in şekline ve Anayasa’sına halel getirmeden kiliselerin veya dinî cemaatlerin tasavvuru çerçevesinde verilmesi ve organize edilmesi öngörülmüştür. Bu makalede Devlet tarafından teminat altına alınan bu hak ve özgürlüklerin Alman okullarında uygulanabilmesi için söz konusu mevzuatın incelenerek okula, aileye ve ilgili cemaatlere düşen görev ve sorumlulukların belirlenmesi amaçlanmaktadır. Makalede anayasal çerçevesi ve hukuki statüsü incelenecek olan din dersleri meselesi, okullarda verilecek İslam din öğretimini yakından ilgilendirmektedir. Bu anlamda öncelikle Almanya’da din öğretiminin yasal dayanakları ile dinî cemaatlerin hukuki statüleri ortaya konulmuş, sonra da Almanya’da zorunlu temel öğretim kademelerinde okuyan Müslüman öğrencilere yönelik düzenlenen İslam din derslerine yer verilmiştir
Background: Sputum induction is an important noninvasive method for analyzing bronchial inflammation in patients with asthma and other respiratory diseases. Most frequently, ultrasonic nebulizers are used for sputum induction, but breath-controlled nebulizers may target the small airways more efficiently. This treatment may produce a cell distribution similar to bronchoalveolar lavage (less neutrophils and more macrophages) and provide deeper insights into the underlying lung pathology. The goal of the study was to compare both types of nebulizer devices and their efficacy in inducing sputum to measure bronchial inflammation, i.e., cell composition and cytokines, in patients with mild allergic asthma and healthy controls.
Methods: The population of this study consisted of 20 healthy control subjects with a median age of 17 years, range: 8–25 years, and 20 patients with a median age of 12 years, range: 8–24 years, presenting with mild, controlled allergic asthma who were not administered an inhaled steroid treatment. We induced sputum in every individual using both devices on two separate days. The sputum weight, the cell composition and cytokine levels were analyzed using a cytometric bead assay (CBA) and by real-time quantitative PCR (qRT-PCR).
Results: We did not observe significant differences in the weight, cell distribution or cytokine levels in the sputum samples induced by both devices. In addition, the Bland-Altman correlation revealed good concordance of the cell distribution. As expected, eosinophils and IL-5 levels were significantly elevated in patients with asthma.
Conclusions: The hypothesis that sputum induction with a breath-controlled "smart" nebulizer is more efficient and different from an ultrasonic nebulizer was not confirmed. The Bland-Altman correlations showed good concordance when comparing the two devices.
Trial registration: NCT01543516 Retrospective registration date: March 5, 2012.
A case of Lymphangioleiomyomatosis (LAM) of the lung in a patient with a history of breast cancer
(2019)
Background: Lymphangioleiomyomatosis (LAM) is a rare progressive cystic and nodular disease of the lung characterized by smooth muscle cell proliferation. LAM predominantly affects young premenopausal women. This report is of a case of LAM presenting in a 47-year-old woman with a past history of breast cancer and discusses the possibility of an association between the two conditions.
Case report: A 47-year-old woman presented as an emergency with an exacerbation of a four-month history of shortness of breath and dry cough. Her symptoms began following the start of anti-hormonal treatment with letrozole and goserelin acetate for a moderately differentiated (grade 2) invasive ductal carcinoma of the breast (pT2, pN0, M0) which was positive for expression of estrogen receptor (ER+), progesterone receptor (PR+), and human epidermal growth factor receptor 2 (HER2+). Until the previous four months, she had breast-conserving treatment with radiotherapy and tamoxifen therapy. Following hospital admission, she was found to be in type I respiratory failure. Chest X-ray, lung computed tomography (CT), and positron-emission tomography (PET) showed diffuse cystic and nodular lung lesions, consistent with a diagnosis of LAM, and antihormonal therapy was discontinued. She developed pericarditis that was treated with the anti-inflammatory agent, colchicine. Treatment with letrozole and sirolimus improved her respiratory symptoms.
Conclusions: A rare case of LAM is presented in a woman with a recent history of breast cancer. Because both tumors were hormone-dependent, this may support common underlying gene associations and signaling pathways between the two types of tumor.
Nach dem Theologiestudium in Göttingen und Marburg war Tabea Kraaz am Graduiertenkolleg „Theologie als Wissenschaft“ an unserem Fachbereich tätig. 2018 wurde sie mit einer Arbeit zu „Martin Luthers Glaubenswelten“ promoviert. Heute ist sie Gemeindepfarrerin in Arnoldshain im Taunus und engagiert sich als „TheoTabea“ in Sozialen Medien und mit einem Blog für die „digitale Kirche“.
Start thinking in systems
(2021)
IN TWO-SIDED MARKETS SUCH AS EXCHANGES, AN INTERMEDIARY BRINGS TOGETHER TWO DISTINCT CUSTOMER POPULATIONS, E.G., BUYERS AND SELLERS. THESE CUSTOMER POPULATIONS INTERACT VIA A PLATFORM PROVIDED BY THE INTERMEDIARY, AND TYPICALLY NETWORK EFFECTS ARE OBSERVABLE IN THESE MARKETS; IF THE NUMBER OF BUYERS IS HIGH, MORE SELLERS ARE ATTRACTED TO THE PLATFORM, AND VICE VERSA. IN SUCH MARKETS IT IS DIFFICULT TO MEASURE THE ECONOMIC SUCCESS OF IT INVESTMENTS. THIS ARTICLE PROPOSES A SOLUTION.
Probing the association between resting-state brain network dynamics and psychological resilience
(2022)
Abstract
This study aimed at replicating a previously reported negative correlation between node flexibility and psychological resilience, that is, the ability to retain mental health in the face of stress and adversity. To this end, we used multiband resting-state BOLD fMRI (TR = .675 sec) from 52 participants who had filled out three psychological questionnaires assessing resilience. Time-resolved functional connectivity was calculated by performing a sliding window approach on averaged time series parcellated according to different established atlases. Multilayer modularity detection was performed to track network reconfigurations over time, and node flexibility was calculated as the number of times a node changes community assignment. In addition, node promiscuity (the fraction of communities a node participates in) and node degree (as proxy for time-varying connectivity) were calculated to extend previous work. We found no substantial correlations between resilience and node flexibility. We observed a small number of correlations between the two other brain measures and resilience scores that were, however, very inconsistently distributed across brain measures, differences in temporal sampling, and parcellation schemes. This heterogeneity calls into question the existence of previously postulated associations between resilience and brain network flexibility and highlights how results may be influenced by specific analysis choices.
Author Summary
We tested the replicability and generalizability of a previously proposed negative association between dynamic brain network reconfigurations derived from multilayer modularity detection (node flexibility) and psychological resilience. Using multiband resting-state BOLD fMRI data and exploring several parcellation schemes, sliding window approaches, and temporal resolutions of the data, we could not replicate previously reported findings regarding the association between node flexibility and resilience. By extending this work to other measures of brain dynamics (node promiscuity, degree) we observe a rather inconsistent pattern of correlations with resilience that strongly varies across analysis choices. We conclude that further research is needed to understand the network neuroscience basis of mental health and discuss several reasons that may account for the variability in results.
Probing the association between resting state brain network dynamics and psychological resilience
(2021)
Abstract
This study aimed at replicating a previously reported negative correlation between node flexibility and psychological resilience, i.e., the ability to retain mental health in the face of stress and adversity. To this end, we used multiband resting-state BOLD fMRI (TR = .675 sec) from 52 participants who had filled out three psychological questionnaires assessing resilience. Time-resolved functional connectivity was calculated by performing a sliding window approach on averaged time series parcellated according to different established atlases. Multilayer modularity detection was performed to track network reconfigurations over time and node flexibility was calculated as the number of times a node changes community assignment. In addition, node promiscuity (the fraction of communities a node participates in) and node degree (as proxy for time-varying connectivity) were calculated to extend previous work. We found no substantial correlations between resilience and node flexibility. We observed a small number of correlations between the two other brain measures and resilience scores, that were however very inconsistently distributed across brain measures, differences in temporal sampling, and parcellation schemes. This heterogeneity calls into question the existence of previously postulated associations between resilience and brain network flexibility and highlights how results may be influenced by specific analysis choices.
Author Summary We tested the replicability and generalizability of a previously proposed negative association between dynamic brain network reconfigurations derived from multilayer modularity detection (node flexibility) and psychological resilience. Using multiband resting-state BOLD fMRI data and exploring several parcellation schemes, sliding window approaches, and temporal resolutions of the data, we could not replicate previously reported findings regarding the association between node flexibility and resilience. By extending this work to other measures of brain dynamics (node promiscuity, degree) we observe a rather inconsistent pattern of correlations with resilience, that strongly varies across analysis choices. We conclude that further research is needed to understand the network neuroscience basis of mental health and discuss several reasons that may account for the variability in results.
Cognitive flexibility – the ability to adjust one’s behavior to changing environmental demands – is crucial for controlled behavior. However, the term ‘cognitive flexibility’ is used heterogeneously, and associations between cognitive flexibility and other facets of flexible behavior have only rarely been studied systematically. To resolve some of these conceptual uncertainties, we directly compared cognitive flexibility (cue-instructed switching between two affectively neutral tasks), affective flexibility (switching between a neutral and an affective task using emotional stimuli), and feedback-based flexibility (non-cued, feedback-dependent switching between two neutral tasks). Three experimental paradigms were established that share as many procedural features (in terms of stimuli and/or task rules) as possible and administered in a pre-registered study plan (N = 100). Correlation analyses revealed significant associations between the efficiency of cognitive and affective task switching (response time switch costs). Feedback-based flexibility (measured as mean number of errors after rule reversals) did not correlate with task switching efficiency in the other paradigms, but selectively with the effectiveness of affective switching (error rate costs when switching from neutral to emotion task). While preregistered confirmatory factor analysis (CFA) provided no clear evidence for a shared factor underlying the efficiency of switching in all three domains of flexibility, an exploratory CFA suggested commonalities regarding switching effectiveness (accuracy-based switch costs). We propose shared mechanisms controlling the efficiency of cue-dependent task switching across domains, while the relationship to feedback-based flexibility may depend on mechanisms controlling switching effectiveness. Our results call for a more stringent conceptual differentiation between different variants of psychological flexibility.
he observed hump-shaped life-cycle pattern in individuals' consumption cannot be explained by the classical consumption-savings model. We explicitly solve a model with utility of both consumption and leisure and with educational decisions affecting future wages. We show optimal consumption is hump shaped and determine the peak age. The hump results from consumption and leisure being substitutes and from the implicit price of leisure being decreasing over time; more leisure means less education, which lowers future wages, and the present value of foregone wages decreases with age. Consumption is hump shaped whether the wage is hump shaped or increasing over life.
We show that the optimal consumption of an individual over the life cycle can have the hump shape (inverted U-shape) observed empirically if the preferences of the individual exhibit internal habit formation. In the absence of habit formation, an impatient individual would prefer a decreasing consumption path over life. However, because of habit formation, a high initial consumption would lead to high required consumption in the future. To cover the future required consumption, wealth is set aside, but the necessary amount decreases with age which allows consumption to increase in the early part of life. At some age, the impatience outweighs the habit concerns so that consumption starts to decrease. We derive the optimal consumption strategy in closed form, deduce sufficient conditions for the presence of a consumption hump, and characterize the age at which the hump occurs. Numerical examples illustrate our findings. We show that our model calibrates well to U.S. consumption data from the Consumer Expenditure Survey.
We set up and solve a rich life-cycle model of household decisions involving consumption of both perishable goods and housing services, stochastic and unspanned labor income, stochastic house prices, home renting and owning, stock investments, and portfolio constraints. The model features habit formation for housing consumption, which leads to optimal decisions closer in line with empirical observations. Our model can explain (i) that stock investments are low or zero for many young agents and then gradually increasing over life, (ii) that the housing expenditure share is age- and wealth-dependent, (iii) that perishable consumption is more sensitive to wealth and income shocks than housing consumption, and (iv) that non-housing consumption is hump-shaped over life.
We show that the net corporate payout yield predicts both the stock market index and house prices and that the log home rent-price ratio predicts both house prices and labor income growth. We incorporate the predictability in a rich life-cycle model of household decisions involving consumption of both perishable goods and housing services, stochastic and unspanned labor income, stochastic house prices, home renting and owning, stock investments, and portfolio constraints. We find that households can significantly improve their welfare by optimally conditioning decisions on the predictors. For a modestly risk-averse agent with a 35-year working period and a 15-year retirement period, the present value of the higher average life-time consumption amounts to roughly $179,000 (assuming both an initial wealth and an initial annual income of $20,000), and the certainty equivalent gain is around 5.5% of total wealth (financial wealth plus human capital). Furthermore, every cohort of agents in our model would have benefited from applying predictor-conditional strategies along the realized time series over our 1960-2010 data period.
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 term life insurance with realistic features. In particular, the available contracts are long term so that decisions are sticky and can only be revised at significant costs. Furthermore, a revision is only possible as long as the insured person is healthy. A second important and realistic 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 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 life insurance markets altogether.
We propose a novel approach on how to estimate systemic risk and identify its key determinants. For US financial companies with publicly traded equity options, we extract option-implied value-at-risks and measure the spillover effects between individual company value-at-risks and the option-implied value-at-risk of a financial index. First, we study the spillover effect of increasing company risks on the financial sector. Second, we analyze which companies are mostly affected if the tail risk of the financial sector increases. Key metrics such as size, leverage, market-to-book ratio and earnings have a significant influence on the systemic risk profiles of financial institutions.
In this paper, we propose a novel approach on how to estimate systemic risk and identify its key determinants. For all US financial companies with publicly traded equity options, we extract their option-implied value-at-risks (VaRs) and measure the spillover effects between individual company VaRs and the option-implied VaR of an US financial index. First, we study the spillover effect of increasing company risks on the financial sector. Second, we analyze which companies are most affected if the tail risk of the financial sector increases. We find that key accounting and market valuation metrics such as size, leverage, balance sheet composition, market-to-book ratio and earnings have a significant influence on the systemic risk profile of a financial institution. In contrast to earlier studies, the employed panel vector autoregression (PVAR) estimator allows for a causal interpretation of the results.
This paper studies the relation between firm value and a firm's growth options. We find strong empirical evidence that (average) Tobin's Q increases with firm-level volatility. However, the significance mainly comes from R&D firms, which have more growth options than non-R&D firms. By decomposing firm-level volatility into its systematic and unsystematic part, we also document that only idiosyncratic volatility (ivol) has a significant effect on valuation. Second, we analyze the relation of stock returns to realized contemporaneous idiosyncratic volatility and R&D expenses. Single sorting according to the size of idiosyncratic volatility, we only find a significant ivol anomaly for non-R&D portfolios, whereas in a four-factor model the portfolio alphas of R&D portfolios are all positive. Double sorting on idiosyncratic volatility and R&D expenses also reveals these differences between R&D and non-R&D firms. To simultaneously control for several explanatory variables, we also run panel regressions of portfolio alphas which confirm the relative importance of idiosyncratic volatility that is amplified by R&D expenses.
We study consumption-portfolio and asset pricing frameworks with recursive preferences and unspanned risk. We show that in both cases, portfolio choice and asset pricing, the value function of the investor/ representative agent can be characterized by a specific semilinear partial differential equation. To date, the solution to this equation has mostly been approximated by Campbell-Shiller techniques, without addressing general issues of existence and uniqueness. We develop a novel approach that rigorously constructs the solution by a fixed point argument. We prove that under regularity conditions a solution exists and establish a fast and accurate numerical method to solve consumption-portfolio and asset pricing problems with recursive preferences and unspanned risk. Our setting is not restricted to affine asset price dynamics. Numerical examples illustrate our approach.
We study consumption-portfolio and asset pricing frameworks with recursive preferences and unspanned risk. We show that in both cases, portfolio choice and asset pricing, the value function of the investor/representative agent can be characterized by a specific semilinear partial differential equation. To date, the solution to this equation has mostly been approximated by Campbell-Shiller techniques, without addressing general issues of existence and uniqueness. We develop a novel approach that rigorously constructs the solution by a fixed point argument. We prove that under regularity conditions a solution exists and establish a fast and accurate numerical method to solve consumption-portfolio and asset pricing problems with recursive preferences and unspanned risk. Our setting is not restricted to affine asset price dynamics. Numerical examples illustrate our approach.
This paper studies constrained portfolio problems that may involve constraints on the probability or the expected size of a shortfall of wealth or consumption. Our first contribution is that we solve the problems by dynamic programming, which is in contrast to the existing literature that applies the martingale method. More precisely, we construct the non-separable value function by formalizing the optimal constrained terminal wealth to be a (conjectured) contingent claim on the optimal non-constrained terminal wealth. This is relevant by itself, but also opens up the opportunity to derive new solutions to constrained problems. As a second contribution, we thus derive new results for non-strict constraints on the shortfall of inter¬mediate wealth and/or consumption.
This paper studies a consumption-portfolio problem where money enters the agent's utility function. We solve the corresponding Hamilton-Jacobi-Bellman equation and provide closed-form solutions for the optimal consumption and portfolio strategy both in an infinite- and finite-horizon setting. For the infinite-horizon problem, the optimal stock demand is one particular root of a polynomial. In the finite-horizon case, the optimal stock demand is given by the inverse of the solution to an ordinary differential equation that can be solved explicitly. We also prove verification results showing that the solution to the Bellman equation is indeed the value function of the problem. From an economic point of view, we find that in the finite-horizon case the optimal stock demand is typically decreasing in age, which is in line with rules of thumb given by financial advisers and also with recent empirical evidence.
This paper studies a consumption-portfolio problem where money enters the agent's utility function. We solve the corresponding Hamilton-Jacobi-Bellman equation and provide closed-form solutions for the optimal consumption and portfolio strategy both in an infinite- and finite-horizon setting. For the infinite-horizon problem, the optimal stock demand is one particular root of a polynomial. In the finite-horizon case, the optimal stock demand is given by the inverse of the solution to an ordinary differential equation that can be solved explicitly. We also prove verification results showing that the solution to the Bellman equation is indeed the value function of the problem. From an economic point of view, we find that in the finite-horizon case the optimal stock demand is typically decreasing in age, which is in line with rules of thumb given by financial advisers and also with recent empirical evidence.
This research article examines the dual impact of protests on COVID-19 spread, a challenge for policymakers balancing public health and the right to assemble. Using a game theoretical model, it shows that protests can shift infection risks between counties, creating a dilemma for regulators. The empirical study analyzes two German protests in November 2020 using proprietary data from a bus-shuttle service, finding evidence to support the assumption that protests can shift infection risks. The article concludes by discussing the implications of these findings for policymakers, highlighting that regulators’ individually rational strategic decisions may lead to inefficient outcomes.
Plasma fibronectin is a circulating protein that facilitates phagocytosis by connecting bacteria to immune cells. A fibronectin isoform, which includes a sequence of 90 AA called extra-domain B (EDB), is synthesized de novo at the messenger RNA (mRNA) level in immune cells, but the reason for its expression remains elusive. We detected an 80-fold increase in EDB-containing fibronectin in the cerebrospinal fluid of patients with bacterial meningitis that was most pronounced in staphylococcal infections. A role for this isoform in phagocytosis was further suggested by enhanced EDB fibronectin release after internalization of Staphylococcus aureus in vitro. Using transgenic mouse models, we established that immune cell production of fibronectin contributes to phagocytosis, more so than circulating plasma fibronectin, and that accentuated release of EDB-containing fibronectin by immune cells improved phagocytosis. In line with this, administration of EDB fibronectin enhanced in vitro phagocytosis to a larger extent than plasma fibronectin. This enhancement was mediated by αvβ3 integrin as shown using inhibitors or cells from β3 integrin knockout mice. Thus, we identified both a novel function for EDB fibronectin in augmenting phagocytosis over circulating plasma fibronectin, as well as the mediating receptor. Our data also establish for the first time, a direct role for β3 integrin in bacterial phagocytosis in mammals.
Trehalose, a sugar from fungi, mimics starvation due to a block of glucose transport and induces Transcription Factor EB- mediated autophagy, likely supported by the upregulation of progranulin. The pro-autophagy effects help to remove pathological proteins and thereby prevent neurodegenerative diseases such as Alzheimer’s disease. Enhancing autophagy also contributes to the resolution of neuropathic pain in mice. Therefore, we here assessed the effects of continuous trehalose administration via drinking water using the mouse Spared Nerve Injury model of neuropathic pain. Trehalose had no effect on drinking, feeding, voluntary wheel running, motor coordination, locomotion, and open field, elevated plus maze, and Barnes Maze behavior, showing that it was well tolerated. However, trehalose reduced nerve injury-evoked nociceptive mechanical and thermal hypersensitivity as compared to vehicle. Trehalose had no effect on calcium currents in primary somatosensory neurons, pointing to central mechanisms of the antinociceptive effects. In IntelliCages, trehalose-treated mice showed reduced activity, in particular, a low frequency of nosepokes, which was associated with a reduced proportion of correct trials and flat learning curves in place preference learning tasks. Mice failed to switch corner preferences and stuck to spontaneously preferred corners. The behavior in IntelliCages is suggestive of sedative effects as a 'side effect' of a continuous protracted trehalose treatment, leading to impairment of learning flexibility. Hence, trehalose diet supplements might reduce chronic pain but likely at the expense of alertness.
Analyses of species functional traits are suitable to better understand the coexistence of species in a given environment. Trait information can be applied to investigate diversity patterns along environmental gradients and subsequently to predict and mitigate threats associated with climate change and land use. Species traits are used to calculate community trait means, which can be related to environmental gradients. However, while species traits can provide insights into the mechanisms underlying community assembly, they can lead to erroneous inferences if mean trait values are used. An alternative is to incorporate intraspecific trait variability (ITV) into calculating the community trait means. This approach gains increasing acceptance in plant studies. For macrofungi, functional traits have recently been applied to examine their community ecology but, to our knowledge, ITV has yet to be incorporated within the framework of community trait means. Here, we present a conceptual summary of the use of ITV to investigate the community ecology of macrofungi, including the underlying ecological theory. Inferences regarding community trait means with or without the inclusion of ITV along environmental gradients are compared. Finally, an existing study is reconsidered to highlight the variety of possible outcomes when ITV is considered. We hope this Opinion will increase awareness of the potential for within-species trait variability and its importance for statistical inferences, interpretations, and predictions of the mechanisms structuring communities of macro- and other fungi.
Forest species are affected by macroclimate, however, the microclimatic variability can be more extreme and change through climate change. Fungal fruiting community composition was affected by microclimatic differences. Here we ask whether differences in the fruiting community can be explained by morphological traits of the fruit body, which may help endure harsh conditions. We used a dead wood experiment and macrofungal fruit body size, color, and toughness. We exposed logs of two host tree species under closed and experimentally opened forest canopies in a random-block design for four years and identified all visible fruit bodies of two fungal lineages (Basidio- and Ascomycota). We found a consistently higher proportion of tough-fleshed species in harsher microclimates under open canopies. Although significant, responses of community fruit body size and color lightness were inconsistent across lineages. We suggest the toughness-protection hypothesis, stating that tough-fleshed fruit bodies protect from microclimatic extremes by reducing dehydration. Our study suggests that the predicted increase of microclimatic harshness with climate change will likely decrease the presence of soft-fleshed fruit bodies. Whether harsh microclimates also affect the mycelium of macrofungi with different fruit body morphology would complement our findings and increase predictability under climate change.
Climate change causes increased tree mortality leading to canopy loss and thus sun-exposed forest floors. Sun exposure creates extreme temperatures and radiation, with potentially more drastic effects on forest organisms than the current increase in mean temperature. Such conditions might potentially negatively affect the maturation of mushrooms of forest fungi. A failure of reaching maturation would mean no sexual spore release and, thus, entail a loss of genetic diversity. However, we currently have a limited understanding of the quality and quantity of mushroom-specific molecular responses caused by sun exposure. Thus, to understand the short-term responses toward enhanced sun exposure, we exposed mushrooms of the wood-inhabiting forest species Lentinula edodes, while still attached to their mycelium and substrate, to artificial solar light (ca. 30°C and 100,000 lux) for 5, 30, and 60 min. We found significant differentially expressed genes at 30 and 60 min. Eukaryotic Orthologous Groups (KOG) class enrichment pointed to defense mechanisms. The 20 most significant differentially expressed genes showed the expression of heat-shock proteins, an important family of proteins under heat stress. Although preliminary, our results suggest mushroom-specific molecular responses to tolerate enhanced sun exposure as expected under climate change. Whether mushroom-specific molecular responses are able to maintain fungal fitness under opening forest canopies remains to be tested.
Risiko muss wieder kosten
(2011)
This paper summarizes the key proposals of the report by the Liikanen Commission. It starts with an explanation of a crisis narrative underlying the Report and its proposals. The proposals aim for a revitalization of market discipline in financial markets. The two main structural proposals of the Liikanen Report are: first, for large banks, the separation of the trading business from other parts of the banking business (the "Separation Proposal"), and the mandatory issuing of subordinated bank debt thought to be liable (the strict "Bail-in Proposal"). The credibility of this commitment to private liability is achieved by strict holding restrictions. The anticipated consequences of the introduction of these structural regulations for the financial industry and markets are addressed in a concluding part.
Ausgehend von einer Erläuterung der Kriseninterpretation (crisis narrative), wie sie in dem Bericht der Liikanen-Kommission zugrunde liegt, werden die nach Ansicht des Verfassers zentralen Vorschläge des Kommissionsberichts ausgewählt, vorgestellt und in den größeren Rahmen einer erneuerten Ordnungspolitik für die Finanzmärkte Europas eingeordnet. Die mit den Vorschlägen eng zusammenhängenden Reformelemente der Bankenunion werden in diesem Text bewusst ausgeklammert. Die beiden zentralen Strukturvorschläge des Liikanen-Berichts betreffen die Abspaltung der Handelsgeschäfte von dem Universalbankengeschäft für große, internationale Banken (der Trennbankenvorschlag), sowie die verpflichtende Emission nachrangigen, glaubwürdig haftenden Fremdkapitals (der strenge Bail-in Vorschlag). Glaubwürdigkeit der Haftungszusage wird durch strenge Halterestriktionen erreicht. Vorhersehbare Folgerungen einer Einführung dieser Strukturregeln für die Finanzindustrie und -märkte werden in einem abschließenden Teil angesprochen.
This present comment suggests an amendment to the proposal for a directive of the European Parliament and of the Council, establishing a framework for the recovery and resolution of credit institutions and investment firms. The current proposal focuses on bail-in, but does not sufficiently take into account the pressure exerted on central bankers, supervisors and politicians by the fear of interbank contagion. The only way out of this hold-up type of situation can be found in bail-in bonds. Bail-in bonds are dedicated loss taking debt instruments, whose status of being first in line if it comes to default is clearly communicated from day one.
Geiz war gestern
(2020)
In dieser Notiz wird ein neues Konzept für eine europäische Einlagensicherung vorgeschlagen, welches den starken politischen Vorbehalten Rechnung trägt, die gegen eine Vergemeinschaftung der Haftung für Bankeinlagen bestehen. Das skizzierte drei-stufige Einlagensicherungsmodell führt existierende nationale Einlagensicherungseinrichtungen weiter, bietet einen europäischen Verlustausgleich und verhindert eine exzessive Risikoübernahme zu Lasten der internationalen Gemeinschaft.
On January 29, 2014, EU Commissioner Barnier published a draft law proposing a ban for proprietary trading by big banks in Europe. In this opinion piece, published in a German newspaper on 30 January, 2014, Jan Pieter Krahnen, who was a member of the Liikanen Commission, argues that the proposal could prove to be effective in preventing systemic risk.
Stinginess was yesterday
(2020)
Fünf Jahre nach Beginn der Banken- und Staatsschuldenkrise („Finanzkrise“) kämpfen wir weiterhin mit den elementaren Problemen: Bei Märkten und Marktteilnehmern fehlt es an Stabilität und Vertrauen. Viele Banken stehen immer noch nicht auf eigenen Füßen und nehmen die ihnen in Europa traditionell zukommende zentrale Rolle für Wachstum und Entwicklung nicht wahr. Den guten Absichten, auf die sich die großen politischen Mächte während der ersten G-20 Treffen 2008 und 2009 verständigt hatten, ist eine Reihe von sinnvollen Ideen und Konzepten gefolgt. Die Voraussetzungen für einen grundlegenden reformerischen Erfolg sind somit gegeben – doch nun muss die Umsetzung folgen. Dazu bedarf es mutiger Entscheidungen. Im Jahr 2014 muss die europäische Politik gleich mehrere Weichen stellen. Der Bundesregierung kommt dabei die Schlüsselrolle zu. Sie muss den Mut haben zu radikaler Ordnungspolitik!
In this note, a new concept for a European deposit guarantee scheme is proposed, which takes account of the strong political reservations against a mutualization of the liability for bank deposits. The three-stage model for deposit insurance outlined in the text builds on existing national deposit guarantee schemes, offering loss compensation on a European level and at the same time preventing excessive risk and moral hazard taking by individual banks.
This policy letter provides an overview of the strengths, weaknesses, risks and opportunities of the upcoming comprehensive risk assessment, a euro area-wide evaluation of bank balance sheets and business models. If carried out properly, the 2014 comprehensive assessment will lead the euro area into a new era of banking supervision. Policy makers in euro area countries are now under severe pressure to define a credible backstop framework for banks. This framework, as the author argues, needs to be a broad, quasi-European system of mutually reinforcing backstops.
Mit Blick auf die gescheiterten Verhandlungen mit Griechenland, argumentiert Jan Krahnen im vorliegenden Policy Beitrag, dass eine zielführende Reformagenda nur von der gewählten Regierung Griechenlands formuliert werden kann. Die Euro-Staaten müssten Griechenland für die Zeitdauer einer Restrukturierungszeit eine Grundsicherung zusagen. Die EU-Staaten fordert Krahnen dazu auf, aus der Griechenlandkrise die notwendigen Konsequenzen zu ziehen. Auch die Eurozone brauche eine effektive Reformagenda. Die Verschuldungsdynamik innerhalb der Währungsunion, deren Auswüchse am Beispiel Griechenlands besonders deutlich werden, könne bei fehlendem guten Willen nur durch eine politische Union und eine in sie eingebettete Fiskalunion aufgelöst werden. Krahnen argumentiert, dass ein Weiterverhandeln über Restrukturierungsauflagen aus der derzeitigen verfahrenen Situation nicht herausführen wird. Entscheidend sei, ein mehr oder weniger umfassendes Paket zu schnüren, das Elemente eines teilweisen internationalen Haftungsverbunds mit Elementen eines partiellen nationalen Souveränitätsverzichts verbindet.
Stellungnahme zum Entwurf eines Gesetzes zur Umsetzung der Richtlinie 2014/59/EU (BRRD-Umsetzungsgesetz) der Bundesregierung vom 22.09.2014
Der Gesetzentwurf der Bundesregierung zur Umsetzung der EU-Richtlinie 2014/59/EU zur Festlegung eines Rahmens für die Sanierung und Abwicklung von Kreditinstituten und Wertpapierfirmen (“BRRD-Umsetzungsgesetz“) berührt auch die Frage der institutionellen Struktur für die Zuständigkeit für Bankenaufsicht und Geldpolitik. Es gibt gewichtige Gründe dafür, auf lange Sicht die Geldpolitik von der Bankenaufsicht und möglichen Bankenabwicklungs- und -restrukturierungsfragen institutionell zu trennen. Bei einer Trennung ist zu beachten, dass alle Institutionen für ihre jeweiligen Mandate gleichberechtigt auf erstklassige Daten über die Kapitalmärkte und die Transaktionen und Bilanzen der Banken zugreifen müssen. Ein Y-Modell, in dem zwei voneinander unabhängige Institutionen auf eine gemeinsame Datenbasis aufsetzen, kann im deutschen Kontext erreicht werden, indem die Bundesbank und die Bafin in einer Institution zusammengeführt werden, wobei sowohl die Aufsicht wie auch die Geldpolitik als Anstalt in der Anstalt (AIDA) geführt werden. Im Rahmen dieser „doppelten AIDA“-Lösung können beide Anstalten gleichberechtigt auf eine Datenbasis zugreifen. Die Daten werden im Rahmen der Mandate von Geldpolitik und Aufsicht wie bisher bundesweit erhoben. Die Entwicklung und spätere Einführung des Y-Modells („doppelte AIDA“) würde auch einen Modellcharakter für die noch zu führende Debatte um eine sinnvolle Institutionenstruktur für Europa haben.
Das Financial Stability Board (FSB) schlägt zur Lösung des "too big to fail"-Problems einen neuen Risikokapital-Puffer für global tätige systemrelevante Banken vor. Die Kennzahl „Total Loss Absorbing Capacity“ (TLAC), setzt sich zusammen aus hartem Kernkapital und verlustabsorbierendem Fremdkapital. Das verlustabsorbierende, also bail-in-fähige Fremdkapital soll vor anderen Positionen der Passivseite einer Bank in einer Krisensituation vorrangig haften oder aber in Eigenkapital umgewandelt werden. Jan Krahnen argumentiert, dass es für eine glaubhafte Verringerung des "too big to fail"-Problems auf die Anforderungen an das verlustabsorbierende Fremdkapital ankommt. Dass die Aufsicht die Halter von Bail-in Anleihen im Verlustfall tatsächlich einem Bail-in unterzieht ist vor allem nur dann glaubwürdig, wennn andere Banken nicht die Halter solcher Anleihen sind.
A recent proposal by the Financial Stability Board (FSB) suggests a new risk capital buffer for globally operating systemically important financial institutions. The suggested metric, “Total Loss Absorbing Capacity“ (TLAC), is composed of Tier-1 capital and loss absorbing debt. In a crisis situation, “bail-in-able” debt is to be written down or converted into equity. Jan Krahnen argues that the credibility of bail-in, in the case of systemically important financial institutions, hinges crucially on the design of TLAC and the requirements that will be placed on loss absorbing “bail-in-able” debt.The fear of direct systemic consequences through bail-in could be overcome, if a holding ban were placed on the “bail-in-bonds” of financial institutions. The holding ban would stipulate that these bonds cannot be held by other institutions within the banking sector.
In light of the failed negotiations with Greece, Jan Krahnen argues that an effective reform agenda for Greece can only be designed by the elected government. Fundamental reforms will take time to take full effect and euro area member states will, in the meantime, have to offer Greece a basic level of economic security.
Krahnen demands that policy makers and the professional public involved view the Greek crisis as an opportunity to take the next necessary steps to formulate a reform agenda for the European Monetary Union. A community of supranational and non-party researchers and intellectuals could take the initiative and in a structured process develop a trustworthy and realistic concept that drafts the next big step towards a political union of Europe, including elements of a fiscal union.
Recently, Fuest and Sinn (2018) have demanded a change of rules for the Eurozone’s Target 2 payment system, claiming it would violate the Statutes of the European System of Central Banks and of the European Central Bank. The authors present a stylized model based on a set of macro-economic assumptions, and show that Target 2 may lead to loss sharing among national central banks (NCBs), thus violating the no risk-sharing requirement laid out by the Eurosystem Statutes.
In this note, I present an augmented model that incorporates essential features of the micro- and macroprudential regulatory and supervisory regime that today is hard-wired into Europe’s banking system. The model shows that the original no-risk-sharing principle is not necessarily violated during a financial crisis of a member state. Moreover, it shows that under a banking union regime, financial crisis asset value losses at or below the 99.9th percentile are borne by private investors, not by taxpayers, and particularly not by central banks.
Therefore, policy conclusions from the micro-founded model differ significantly from those suggested by Fuest and Sinn (2018).
Um eine grüne Transformation der Volkswirtschaft zu erreichen, werden Finanzmärkte und die mit ihnen verbundenen Banken eine wichtige Rolle einnehmen müssen. Aber allein vermögen Banken und Kapitalmärkte wenig, wenn sie nicht im Kontext einer klugen, politischen Rahmensetzung und einer transparenten Erfassung der verursachten Schäden auf Unternehmensebene gesehen werden. Diese drei Pfeiler stellen bildlich den tragenden Unterbau für eine Brücke hin zu einer klimaneutralen Wirt-schaftsverfassung dar. Ihr Zusammenwirken ist eine Voraussetzung dafür, dass die Finanzwirtschaft die benötigten Finanzmittel für die grüne Transformation bereitstellen kann.
Über Scheinriesen: Was TARGET-Salden tatsächlich bedeuten : eine finanzökonomische Überprüfung
(2018)
Der TARGET-Saldo der Bundesbank beläuft sich gegenwärtig auf knapp 1 Billion Euro. Kritikern zufolge birgt dieser Umstand hohe Lasten und Risiken für den deutschen Steuerzahler und zeigt, dass Deutschland zu einem „Selbstbedienungsladen“ im Eurosystem geworden sei. Vor diesem Hintergrund erörtert das Papier im Detail, wie TARGET-Salden überhaupt entstehen und was sie finanzökonomisch bedeuten. Die wirtschaftspolitische Analyse kommt zu dem Schluss, dass - anders als von den Kritikern behauptet- unter den Bedingungen einer Währungsunion im Normalbetrieb - TARGET-Salden lediglich Verrechnungssalden ohne weitere Implikationen sind, die aber nützliche Informationen über ökonomisch tieferliegende, regionale Verschiebungen geben können. Unter dem Extremszenario eines Zerfalls der Währungsunion können TARGET-Salden zwar als offene Positionen interpretiert werden, deren spätere Erfüllung würde aber ähnlich dem Brexit von komplizierten politischen Verhandlungen abhängen, sodass über die Werthaltigkeit allenfalls spekuliert werden kann. Sollte man das Extremszenario für bedeutend halten, und politisches Handeln fordern, erscheinen zwei Lösungen sinnvoll. Beide Vorschläge führen zu einer institutionellen Stärkung der Eurozone: i) die Einführung einer Tilgungspraxis, wie sie im US-amerikanischen Fedwire-System angewandt wird. Dabei handelt es sich um eine rein fiktive Tilgung in Form einer Umbuchung auf einem gemeinsamen (Offenmarkt-)Konto bei der EZB; ii) die Bündelung aller monetären Aktivitäten bei der EZB, sodass eine regionale Abgrenzung von Zahlungsvorgängen entfällt (und damit die TARGET-Salden verschwinden), weil alle Banken in direkter Beziehung zu ein und derselben Zentralbank stehen und der Zahlungsverkehr direkt zwischen den beteiligten Banken stattfindet.
Die große Herausforderung, um das systemische Risiko im Finanzsektor zu vermindern, besteht darin, kluge Finanzarchitektur zu etablieren, die gewährtleistet, dass ein verbindlicher Anteil von Bankanleihen außerhalb des Finanzsektors gehalten wird. Die Anleihegläubiger von außerhalb des Bankensektors müssen sich dadurch auszeichnen, dass sie kein Refinanzierungsrisiko haben, wenn sie eine plötzliche Verlussituation erleben.
The bail-in puzzle
(2011)
Under the current conditions of a global financial crisis, notably in Europe’s banking industry, the governance role of bond markets is defunct. In fact, investors have understood that bank debt will almost always be rescued with taxpayers’ money. The widespread practice of government-led bank bailouts has thus severely corrupted the bond market, leading to the underestimation of risk and, as a consequence, the destruction of market discipline. Any feasible solution to the bank-debt-is-too-cheap problem will have to re-install true default risk for bank bond holders.
Gesprächsreihe zu Strukturreformen im europäischen
Bankensektor : Zukunft der Universalbanken
(2013)
In der zweiten Veranstaltung der „Gesprächsreihe zu Strukturreformen im europäischen Bankensektor“ diskutierten Professor Dr. Jan Pieter Krahnen und Dr. Michael Kemmer die Zukunft der Universalbanken. Anlass war der Vorschlag der Liikanen-Kommission, dass Finanzinstitute einen Teil ihres Investmentbankings, den Eigenhandel und das Market-Making, ab einer bestimmten Größenordnung ausgliedern sollen.
The Wirecard scandal is a wake-up call alerting German politics to the importance of securities market integrity. The role of market supervision is to ensure the smooth functioning of capital markets and their integrity, creating trust among and acceptance by investors locally and globally. The existing patchwork of national supervisory practice in Europe is under discussion today, in the wake of Brexit that will end the role of London as a de-facto lead supervisor in stock and bond markets. A fundamental overhaul of a fragmented securities markets supervisory regime in Europe would offer the potential to lead to the establishment of an independent European Single Market Supervisor (ESMS). Endowed with strong enforcement powers, and supported by the existing national agencies, the ESMS would be entrusted with ensuring a uniform market standard as to transparency and other issues of market integrity across Europe. This would not rule out maintaining a variety of market organization structures at the national level. The ESMS would need executive powers in the world of markets (i.e. securities and trading), much like the SSM in the world of banking. To fill this new role, ESMS would have to be established as a new, independent institution, including an enormously scaled up staff if compared, e.g., to ESMA.
Gesprächsreihe zu Strukturreformen im Europäischen Bankensektor: Managementvergütung im Bankensektor
(2013)
In der ersten Veranstaltung der „Gesprächsreihe zu Strukturreformen im europäischen Bankensektor“ diskutierten Professor Dr. Jan Krahnen und Dr. Thomas Mayer den im Liikanen-Bericht enthaltenen Vorschlag zur Managervergütung im Bankensektor. Der Vorschlag baut auf einem der Kernvorschläge der Liikanen-Kommission auf, nach dem Finanzinstitute gehalten sein sollen, einen Teil ihres Fremdkapitals so zu strukturieren, dass, bei Schieflage des Finanzinstituts, eine Inhaftungnahme der Gläubiger dieses Fremdkapitals möglich wird. Um dies zu erreichen, empfiehlt die Liikanen-Kommission für alle Banken, dass diese einen festgelegten Prozentsatz ihres Kapitals als „Bail-in Anleihen“ begeben müssen. Der Vorschlag zur Managervergütung sieht vor Bail-in Anleihen für die leistungsorientierte und anreizorientierte Entlohnung von Managern einzusetzen, um Anreize zu geben, die Risikopolitik des Unternehmens so zu verankern, dass auch längerfristig keine exorbitanten Risiken auftreten.
In the wake of the recent financial crisis, significant regulatory actions have been taken aimed at limiting risks emanating from trading in bank business models. Prominent reform proposals are the Volcker Rule in the U.S., the Vickers Report in the UK, and, based on the Liikanen proposal, the Barnier proposal in the EU. A major element of these reforms is to separate “classical” commercial banking activities from securities trading activities, notably from proprietary trading. While the reforms are at different stages of implementation, there is a strong ongoing discussion on what possible economic consequences are to be expected. The goal of this paper is to look at the alternative approaches of these reform proposals and to assess their likely consequences for bank business models, risk-taking and financial stability. Our conclusions can be summarized as follows: First, the focus on a prohibition of only proprietary trading, as envisaged in the current EU proposal, is inadequate. It does not necessarily reduce risk-taking and it likely crowds out desired trading activities, thereby negatively affecting financial stability. Second, there is potentially a better solution to limit excessive trading risk at banks in terms of potential welfare consequences: Trading separation into legally distinct or ring-fenced entities within the existing banking organizations. This kind of separation limits cross-subsidies between banking and proprietary trading and diminishes contagion risk, while still allowing for synergies across banking, non-proprietary trading and proprietary trading.
In the wake of the recent financial crisis, significant regulatory actions have been taken aimed at limiting risks emanating from banks’ trading activities. The goal of this paper is to look at the alternative reforms in the US, the UK and the EU, specifically with respect to the role of proprietary trading. Our conclusions can be summarized as follows: First, the focus on a prohibition of proprietary trading, as reflected in the Volcker Rule in the US and in the current proposal of the European Commission (Barnier proposal), is inadequate. It does not necessarily reduce risk-taking and it is likely to crowd out desired trading activities, thereby possibly affecting financial stability negatively. Second, trading separation into legally distinct or ring-fenced entities within the existing banking organizations, as suggested under the Vickers Report for the UK and the Liikanen proposal for the EU, is a more effective solution. Separation limits cross-subsidies between banking and proprietary trading and diminishes contagion risk, while still allowing for synergies and risk management across banking, non-proprietary trading and proprietary trading.
This paper provides a systematic analysis of individual attitudes towards ambiguity, based on laboratory experiments. The design of the analysis allows to capture individual behavior across various levels of ambiguity, ranging from low to high. Attitudes towards risk and attitudes towards ambiguity are disentangled, providing pure measures of ambiguity aversion. Ambiguity aversion is captured in several ways, i.e. as a discount factor net of a risk premium, and as an estimated parameter in a generalized utility function. We find that ambiguity aversion varies across individuals, and with the level of ambiguity, being most prominent for intermediate levels. Around one third of subjects show no aversion, one third show maximum aversion, and one third show intermediate levels of ambiguity aversion, while there is almost no ambiguity seeking. While most theoretical work on ambiguity builds on maxmin expected utility, our results provide evidence that MEU does not adequately capture individual attitudes towards ambiguity for the majority of individuals. Instead, our results support models that allow for intermediate levels of ambiguity aversion. Moreover, we find risk aversion to be statistically unrelated to ambiguity aversion on average. Taken together, the results support the view that ambiguity is an important and distinct argument in decision making under uncertainty.
This note discusses the basic economics of central clearing for derivatives and the need for a proper regulation, supervision and resolution of central counterparty clearing houses (CCPs). New regulation in the U.S. and in Europe renders the involvement of a central counterparty mandatory for standardized OTC derivatives’ trading and sets higher capital and collateral requirements for non-centrally cleared derivatives.
From a macrofinance perspective, CCPs provide a trade-off between reduced contagion risk in the financial industry and the creation of a significant systemic risk. However, so far, regulation and supervision of CCPs is very fragmented, limited and ignores two important aspects: the risk of consolidation of CCPs on the one side and the competition among CCPs on the other side. i) As the economies of scale of CCP operations in risk and cost reduction can be large, they provide an argument in favor of consolidation, leading at the extreme to a monopoly CCP that poses the ultimate default risk – a systemic risk for the entire financial sector. As a systemic risk event requires a government bailout, there is a public policy issue here. ii) As long as no monopoly CCP exists, there is competition for market share among existing CCPs. Such competition may undermine the stability of the entire financial system because it induces “predatory margining”: a reduction of margin requirements to increase market share.
The policy lesson from our consideration emphasizes the importance of a single authority supervising all competing CCPs as well as of a specific regulation and resolution framework for CCPs. Our general recommendations can be applied to the current situation in Europe, and the proposed merger between Deutsche Börse and London Stock Exchange.
The European Commission is trying to reboot the CMU project: The High-Level Forum on Capital Markets Union – a group of 28 selected experts from industry, academia and civil society – is expected to submit policy recommendations by the end of May 2020 which will feed into the Commission’s new CMU agenda. This contribution is largely based on a letter to the High-Level Forum that gives feedback on the Interim Report published in February. There, we introduce a comprehensive approach to distinguish, from a functional finance perspective, between the ‘game changers’ and what is nice to have. We highlight the importance of common and consistent supervisory practices across Member States and recommend building up a European Securities and Exchange Commission (E-SEC) according to the American model.
Insider trading and portfolio structure in experimental asset markets with a long lived asset
(1997)
We report results of a series of nine market experiments with asymmetric information and a fundamental value process that is more "realistic" than those in previous experiments. Both a call market institution and a continuous double auction mechanism are employed. We find considerable pricing inefficiencies that are only partially exploited by insiders. The magnitude of insider gains is analyzed separately for each experiment. We find support for the hypothesis that the continuous double auction leads to more efficient outcomes. Finally, we present evidence of an endowment effect: the initial portfolio structure influences the final asset holdings of experimental subjects.
This note proposes a new set-up for the fund backing the Single Resolution Mechanism (SRM). The proposed fund is a Multi-Tier Resolution Fund (MTRF), restricting the joint and several supranational liability to a limited range of losses, bounded by national liability at the upper and the lower end. The layers are, in ascending order: a national fund (first losses), a European fund (second losses), the national budget (third losses), the ESM (fourth losses, as a backup for sovereigns). The system works like a reinsurance scheme, providing clear limits to European-level joint liability, and therefore confining moral hazard. At the same time, it allows for some degree of risk sharing, which is important for financial stability if shocks to the financial system are exogenous (e.g., of a supranational macroeconomic nature). The text has four parts. Section A describes the operation of the Multi-Tier Resolution Fund, assuming the fund capital to be fully paid-in (“Steady State“). Section B deals with the build-up phase of the fund capital (“Build up“). Section C discusses how the proposal deals with the apparent incentive conflicts. The final Section D summarizes open questions which need further thought (“Open Questions“).
Green finance upside down
(2021)
We raise some critical points against a naïve interpretation of “green finance” products and strategies. These critical insights are the background against which we take a closer look at instruments and policies that might allow green finance to become more impactful. In particular, we focus on the role of a taxonomy and investor activism. We also describe the interaction of government policies with green finance practice – an aspect, which has been mostly neglected in policy debates but needs to be taken into account. Finally, the special case of green government bonds is discussed.
We raise some critical points against a naïve interpretation of “green finance” products and strategies. These critical insights are the background against which we take a closer look at instruments and policies that might allow green finance to become more impactful. In particular, we focus on the role of a taxonomy and investor activism. We also describe the interaction of government policies with green finance practice – an aspect, which has been mostly neglected in policy debates but needs to be taken into account. Finally, the special case of green government bonds is discussed.
Zusammenfassung - Das Kernanliegen des KredReorgG –die Internalisierung des systemischen Risikos in den Entscheidungsprozess und die Verantwortlichkeit von Bankeignern und –gläubigern – wird im Wesentlichen erreicht. - Die Wirksamkeit des Gesetzes steht und fällt mit der Möglichkeit, jede Bank in systemisch relevante (zu rettende) und systemisch nicht-relevante (abzuwickelnde) Teile zu zerlegen. Dieser Ansatz ist Ziel führend und international „state of the art“ (Bsp. UK). - Unsere Hauptkritik: Um die o.g. Wirksamkeit des Gesetzes überhaupt zu ermöglichen (und eine Unterlaufung der Gesetzesintention zu verhindern), bedarf es einer zusätzlichen und zwingenden Vorgabe, dass jede Bank eine Mindestmenge an Anleihen außerhalb des Kern-Finanzsektors dauerhaft platzieren muss, und dass diese Anleihen zu keinem Zeitpunkt von Banken erworben werden dürfen. - Um dies zu erreichen sind die Anlagevorschriften für Kapitalsammelstellen (Lebensversicherer, Pensionsfonds) und für Banken entsprechend zu ändern bzw. zu verschärfen. - Weitere Kritikpunkte betreffen die vermutete geringe Bedeutung der freiwilligen Verfahren (Sanierung und Reorganisation) und die Gestaltung der Sonderabgabe und der Restrukturierungsfonds.