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This article analyses the 1783 proposal to issue readymade notes to the Bank of England's private banking customers. Prior to 1783, I argue that there were two broad categories under which the Bank issued its notes into circulation: (1) notes which were issued to government in relation to the Bank's role as facilitator of the fiscal revenues of state, and (2) notes which were issued to its private banking customers. The readymade note was a form of paper money which the Bank had previously been issuing only to government and, unlike the notes which the Bank originally issued to its private banking customers, was made out in advance of its being issued into circulation. I argue that the transformation suggested in the 1783 proposal was made possible by the unique relationship which the Bank had always had with the government, and I will make three observations based on identifying how this transformation took place. [ABSTRACT FROM AUTHOR]

This paper provides the first evidence of positive bank-to-bank spillovers. I show that geographic linkages between banks that engage in home lending in the same geographic region transmit positive shocks from one bank to another. I exploit shocks to the deposit base of banks located in counties experiencing shale oil booms and show that a nonshocked bank in a nonboom county expands lending more if its linkages have greater exposure to shale booms. Results show that the shock exposure of linkages has a positive impact on home prices of nonboom counties, and nonshocked banks located therein respond with increased lending. [ABSTRACT FROM AUTHOR]

This article presents several research papers related to banks and asset markets during war and depression. "The Great Banks' Depression: Deposit Withdrawals in the German Crisis of 1931," uses monthly balance-sheet data of all major German credit banks, and further analyze deposit withdrawals and bank failures in the German banking and currency crisis of 1931. "International Financial Crisis Contagion in the Interwar Period," examines international financial markets and the links between them using a newly hand-collected data set for more than 300 company stocks, encompassing weekly equity-market observations for 13 countries.

The article presents abstracts of research related to economic history. These include "Ecological Frontiers on the Grasslands of Kansas: Changes in Farm Scale and Crop Diversity," "Institutional Innovation and the Creation of Liquid Financial Markets: The Case of the American Over-the-Counter Market," and "Geographic and Regulatory Frontiers in Commercial Banking: Private Banking in the United States, Scotland and Germany in Early Industrialization."

Explores how the banks chartered by states in the United States (U.S.) provide a source of flexibility in state public finance following the decision of the U.S. Constitution to remove the states' power to issue paper money. Role of investment earnings and tax revenues derived from banks in state public finance; Importance of state-bank relationships to public finance.

This paper examines global data on unbanked and underbanked consumers to highlight the role improved financial literacy and capability could play inmotivating and enabling the safe and beneficial use of financial services. The paper uses Global Findex data, a demand-side survey on ownership and use of accounts at formal financial institutions, such as a bank or similar financial institution, or a mobile money service provider. The paper reviews the self-reported barriers to account ownership and use cited by unbanked adults and identifies the challenges faced by account owners who could not use an account without help. Together, these issues point to the importance of financial education to improve digital and financial literacy skills, in addition to product design that considers customer abilities, and strong consumer safeguards to ensure that customers benefit from financial access. [ABSTRACT FROM AUTHOR]

Empirical studies and much marketplace opinion have it that the spread between private money market rates and the U.S. Treasury bill rate of comparable maturity is due to differential default risk, liquidity risk, and relative supplies. This paper presents an argument and empirical evidence that the bulk of the systematic and medium-term differential between privates rates---in this case, domestic CDs, commercial paper, bankers' acceptances, and Eurodollar CDs---and the T-bill rate is due to the exemption of interest on Treasury securities from state and local taxation. In the case of Eurodollar CDs, the additional and major systematic factor explaining the spread (visa vis T-bills) is the exemption of Eurodollar CDs from the Federal Reserve's "tax" via reserve requirements. An empirical section confirms the role of standard default risk, liquidity risk, and market "absorption" variables in determining short-term deviations from tax-adjusted parity. The tax-adjusted parity condition, however, remains the major systematic and medium-term determinant---certainly more important than has been suggested previously in the literature. [ABSTRACT FROM AUTHOR]

Comments on articles about economic and business history in the United States. Details of private banking; Views on capital accumulation.

Comments on an article about private banking in the United States. Discussion on the work of economist Herman Kross; Details of economic history; Perception on the role of private bankers.

This article traces the origins of the ‘national bank’ in the Gold Coast. It shows how the Colonial authorities perverted the demand by Africans for a special kind of bank to aid their development. The Colonial Office preferred and ensured the establishment of an orthodox institution, which had little to give with regard to Africans'' demand for developmental credit. This was because it believed that such development institutions would be unhelpful to, arguably, uncreditworthy Africans. This attitude, it is argued, represented a setback to the Gold Coast''s development. Either such an institution, as demanded by Africans, would have helped the colony''s advance, or Africans would have learnt earlier that the concept of development was more fundamental than setting up a ‘national bank’. Cet article retrace les origines de la ‘banque nationale’ de la Côte-de-l''Or. Il démontre que les autorités coloniales dénaturèrent la demande formulée par les Africains d''un type particulier de banque d''aide au développement. Le ministère des colonies préféra, et mit sur pied, une institution orthodoxe qui n''avait pas grand-chose à offrir en matière de crédit au développement, convaincu qu''il était que des institutions de ce type ne seraient guère utiles à des Africains ne jouissant, à leurs yeux, d''aucun crédit. Cet article considère que cette attitude portant préjudice au développement de la Côte-de-l''Or. En effet, ou bien une institution d''aide au développement telle que la souhaitaient les Africains aurait soutenu les progrès de la colonie; ou bien les Africains auraient appris plus rapidement que le concept de développement a des implications plus fondamentales que la mise en place d''une ‘banque nationale’. Dieser Aufsatz spürt den Ursprüngen der ‘Nationalbank’ an der Goldküste nach. Es zeigt, wie die Kolonialregierung den Bedarf der Afrikaner nach einer spezifischen Entwicklungshilfebank manipulierte. Das Kolonialamt bevorzugte und sicherte eine althergebrachte Institution, die wenig mit dem afrikanischen Bedarf nach Entwicklungskredit zu tun hatte. Es wurde argumentiert, daß Entwicklungsbanken für die, so wurde gesagt, nicht kreditwürdigen Afrikaner wenig hilfreich seien. Der Autor argumentiert, daß diese Einstellung einen Rückschritt in bezug auf die Entwicklung der Goldküste darstellte. Entweder hätte eine solche Institution, wie von den Afrikanern gefordert, geholfen die Kolonie voranzubringen, oder die Afrikaner hätten gelernt, daß Entwicklungshilfe mehr als nur die Gründung einer ‘Nationalbank’ bedeutet. Este artículo traza los orígenes del ‘banco nacional’ en la Costa de Oro. Muestra como las autoridades coloniales instrumentalizaron la demanda de los africanos por una clase especial de banco para ayudar a su desarrollo. La Oficina Colonial prefirió y aseguró el establecimiento de una institución ortodoxa, que tenía poco que ver con la demanda de los africanos de crédito para el desarrollo. La causa fue la percepción, discutible, de que tales instituciones para el desarrollo no serían útiles para los poco fiables africanos. Esta actitud, se argumenta, representó un revés para el desarrollo de la Costa de Oro. O bien tal institución, como demandaban los africanos, hubiera ayudado al desarrollo de la colonia o bien los africanos hubieran aprendido antes que el concepto de desarrollo era más importante que el establecer un ‘banco nacional’. [ABSTRACT FROM AUTHOR]

The discussions of the Bullionist Controversy were closely related to the effects of inconvertibility on prices and exchange rates. However, during their discussions, economists had a need to address other important questions such as the convenience of free banking. In this paper, we will study the perspective of the different schools involved in the debate on this issue: we will show that their positions were wholly coherent with their underlying assumptions on the nature of monetary assets. The economists who viewed gold and banknotes as perfect substitutes, such as the radical bullionists, tended to favor a ban on free banking. On the contrary, the economists who viewed banknotes and gold as imperfect substitutes, such as the moderate bullionists and antibullionists, were inclined to favor free banking. [ABSTRACT FROM AUTHOR]

This article presents a comment on the paper "Deposit Insurance in the United States -- Evaluation and Reform." The author discusses some of the proposals that are presented in the paper and offers suggestions related to these policy measures. Some of the concerns that are raised by the author include the complexity of risk assessment and the responsibilities that the Federal Deposit Insurance Corporation and the U.S. Federal Reserve are given in the paper. The author discusses bank failure and the role that large investors play in the success of small banks. The author also offers some policy suggestions of his own.

In this paper, we develop a state-dependent sensitivity value-at-risk (SDSVaR) approach that enables us to quantify the direction, size, and duration of risk spillovers among financial institutions as a function of the state of financial markets (tranquil, normal, and volatile). For four sets of major financial institutions (commercial banks, investment banks, hedge funds, and insurance companies), we show that while small during normal times, equivalent shocks lead to considerable spillover effects in volatile market periods. Commercial banks and, especially, hedge funds appear to play a major role in the transmission of shocks to other financial institutions. [ABSTRACT FROM PUBLISHER]

Economists often consult multiple models in order to combat model uncertainty in the face of misspecification. By examining modeling practices at the Bank of England, this paper identifies an important, but underappreciated modeling procedure. Sometimes an idealized model is manipulated to reproduce the results from another distinct auxiliary model, ones which it could not produce on its own. However, this procedure does not involve making the original model "more realistic," insofar as this means adding in additional causal factors. This suggests that there are ways to make models more representationally adequate that do not involve de-idealization in the straightforward sense. [ABSTRACT FROM AUTHOR]

This paper derives a new set of results that provide corrective measures of overall technical inefficiency that either have been ignored or wrongly assumed in the literature. Using directional distance functions, we argue that overall technical inefficiency is not only a function of input and output technical inefficiencies as previous studies claim but also of the interaction between them. The derivation of the interactive effects between input and output technical inefficiencies (IEIOs) solves the arbitrary decomposition of overall technical inefficiency into input and output components. We also show that the IEIO depends on the choice of the directional vector and whether quantities and prices are taken into consideration. Using exogenous and endogenous directional vectors, we prove these results theoretically and empirically using the US commercial banking data set. Using Bayesian estimation with the monotonicity conditions imposed at each observation, we estimate input and output technical inefficiencies separately using directional input and output distance functions with the three commonly used directional vectors; the unit value, the observed input−output, and the optimal directional vectors. The overall technical inefficiency is estimated using systems of equations to incorporate the interactive effect equation and to address the endogeneity of inputs and outputs. Consistent with the theoretical results, we find significant evidence of the IEIO which has a negative effect on the overall technical inefficiency. This result is robust to alternative directional vectors and model specifications, suggesting that the adjustability of both inputs and outputs is required for the improvement of the efficiency of the US commercial banks. [ABSTRACT FROM AUTHOR]

Our last emerging trend article introduced Risks 1.0 (fairness and bias) and Risks 2.0 (addictive, dangerous, deadly, and insanely profitable). This article introduces Risks 3.0 (spyware and cyber weapons). Risks 3.0 are less profitable, but more destructive. We will summarize two recent books, Pegasus: How a Spy in Your Pocket Threatens the End of Privacy, Dignity, and Democracy and This is How They Tell Me the World Ends: The Cyberweapons Arms Race. The first book starts with a leak of 50,000 phone numbers, targeted by spyware named Pegasus. Pegasus uses a zero-click exploit to obtain root access to your phone, taking control of the microphone, camera, GPS, text messages, etc. The list of 50,000 numbers includes journalists, politicians, and academics, as well as their friends and family. Some of these people have been murdered. The second book describes the history of cyber weapons such as Stuxnet, which is described as crossing the Rubicon. In the short term, it sets back Iran's nuclear program for less than the cost of conventional weapons, but it did not take long for Iran to build the fourth-biggest cyber army in the world. As spyware continues to proliferate, we envision a future dystopia where everyone spies on everyone. Nothing will be safe from hacking: not your identity, or your secrets, or your passwords, or your bank accounts. When the endpoints (phones) have been compromised, technologies such as end-to-end encryption and multi-factor authentication offer a false sense of security; encryption and authentication are as pointless as closing the proverbial barn door after the fact. To address Risks 3.0, journalists are using the tools of their trade to raise awareness in the court of public opinion. We should do what we can to support them. This paper is a small step in that direction. [ABSTRACT FROM AUTHOR]

The main purpose of this paper is to analyze the contribution of land capital to the growth of emissions and income per capita in the long run. We collect new satellite data from the Earth Observatory to obtain estimates of the Enhanced Vegetation Index at the country level for the period 2000–2015. We use these data and the World Bank wealth estimates of natural capital to calibrate and empirically test an extension of the Green Solow model with land degradation and land capital investment. We show that the model is consistent with the cross-country variation in growth rates of carbon emissions per capita and find that there is convergence at the global level, with the contribution of land capital investment to the growth of emissions being negative and significant in all specifications. [ABSTRACT FROM AUTHOR]

Heavy-tailed distributions have been observed for various financial risks and papers have observed that these heavy-tailed distributions are power law distributions. The breakdown of a power law distribution is also seen as an indicator of a tipping point being reached and a system then moves from stability through instability to a new equilibrium. In this paper, we analyse the distribution of operational risk losses in US banks, credit defaults in US corporates and market risk events in the US during the global financial crisis (GFC). We conclude that market risk and credit risk do not follow a power law distribution, and even though operational risk follows a power law distribution, there is a better distribution fit for operational risk. We also conclude that whilst there is evidence that credit defaults and market risks did reach a tipping point, operational risk losses did not. We conclude that the government intervention in the banking system during the GFC was a possible cause of banks avoiding a tipping point. [ABSTRACT FROM AUTHOR]

A conference paper is presented that examines the distribution of bank deposits in the U.S. and the implications this has for the flow of funds analysis. A study was conducted in southern California in an attempt to examine how the funds from this region moved throughout the surrounding area. The author was interested in examining the validity of the growth center concept. The author's findings support the idea of a funds flow; however, he suggests that further analysis is needed.

The interdependence of loan cost and tangible bank activity is an aspect of the cost of bank debt that has not been treated in the literature. Understanding this interdependence is important for banks in pricing their services, especially as banks adopt more flexible pricing policies. This understanding is crucial for a firm in establishing the true cost of bank borrowing, in comparing bank borrowing with other sources of funds, and in evaluating the firm's banks. It is also important for understanding the firm-bank relationship in general and the cost of capital in particular. This paper investigates this interdependence and determines the effective cost of bank borrowing as a function of useful loan size when banks: (1) impose compensating balance restrictions in addition to interest charges in obtaining compensation for loans, (2) allow the firm to earn credits on average net collected balances in the firm's account that can be applied to payment for tangible bank services, (3) allow the same balances that earn credits for tangible services to be used to satisfy the compensating balance requirements associated with borrowing, and (4) impose constraints on the percentage of charges for tangible services that can be paid for by cash payments. Conditions 1 to 4 and the necessity of providing for transaction balances are typical of most firms. This paper (1) defines the concept of both the effective interest rate and the effective rate of compensating balances, and (2) derives the effective cost of bank borrowing as a function of useful loan size at a given bank. We find that the marginal effective loan cost versus useful loan size is a step function of three steps at a single bank and is a step function of many steps for a firm with many banks. [ABSTRACT FROM AUTHOR]

A central question of many previous monetary studies has been the determination of the effects of various forces upon the actual supply of money in the economy. One of a number of competing monetary supply hypotheses (Brunner and Meltzer) has focused on the relationship between bank reserves and deposit creation. This theoretical structure was first suggested in earlier works by Phillips and Crick. Recent studies of similar nature, including those of Mellon and Orr, Morrison, and Brown and Lloyd, have employed the techniques of inventory theory to examine the factors influencing bank credit expansion. Similar inventory treatments of other cash balance and portfolio adjustment models are presented in the works of Baumol, Eppen and Fama, Lloyd, and Chitre. In the present paper, the effects of various forces on the optimal expansion of credit and the holding of reserves are investigated using the techniques of dynamic programming (see, for example, Bellman and Dreyfus). Discussed in the paper are the effects on bank credit expansion of uncertainty about reserve losses, various types of penalty costs, costs of adjustment, uncertain future interest rates, and of various institutional structures under which the bank must operate. This latter topic is important because of the Federal Reserve policy change of September 1968. Prior to that time, required reserves and actual reserves were computed over the same reserve period. Since that time, however, the required reserves in any period are known with certainty at the beginning of the period and depend upon deposit levels two periods earlier. For purposes of mathematical convenience, this latter structure is treated here as a one-period lag. [ABSTRACT FROM AUTHOR]

Commercial bank portfolio models developed by Hester [6], Porter [11], and Kane and Malkiel [7], among others, relate the structure of an asset portfolio to variation in the level of deposits. Similarly, in a recent application of linear programming to asset management, Cohen and Hammer [3] specify a liquidity constraint based upon deposit fluctuations. However, there have been few empirical studies of the determinants of demand deposit fluctuations. The purpose of this paper is to extend the work of Gramley [4], Rangarajan [12], and Wilkerson [14] on the determinants of deposit variability. In this paper, the analysis will be confined to demand deposit variability. [ABSTRACT FROM AUTHOR]

The article offers information about the Warburton Collection at George Mason University. The collection features information about the development of Clark Warburton as an economist, his studies of the U.S. banking system and the role of money in business fluctuations, published and unpublished papers, unpublished book-length manuscripts and corresponding notes, research proposals, comments on the works of other economists, and biographical materials. The contribution of Warburton about the integration of monetary and value theory is discussed.

This article presents several research papers related to economic history. "Educational Disparity in Pakistan, 1947-1971." Using time-series data, this paper documents the regional divide in educational facilities between East Pakistan (now Bangladesh) and West Pakistan, 1947-1971. "Management Structure and Bank Performance: Empirical Examination of the Chinese Banking Industry," investigates the relationship between bank performance and management structure in Shanghai between 1912 and 1937. The data come from Shanghai's Municipal Archives and the Center for Research of Chinese Business History.

The extant literature suggests that one of the main causes of the recent financial crisis was the excessive use of short-term debt by banks. Using a large sample of banks, we find that increases in repurchase agreements (repos) were recognized by external capital markets to increase bank risk in the pre-crisis period. In the crisis, we find a negative relationship between repos and risk. We attribute this result to evidence suggesting that “good” banks were able to continue funding their repos, whereas “bad” banks had to significantly decrease their repo funding. [ABSTRACT FROM PUBLISHER]

This paper examines the effect of commercial bank entry on underwriting spreads for IPOs, SEOs, and debt issues using a long time series that spans 30 years, from 1975 to 2004. We find that, on average, commercial banks charge lower spreads of approximately 72 basis points for IPOs, 43 basis points for SEOs, and 14 basis points for debt over the entire sample period. The economic impact of commercial banks on lowering underwriting spreads is most significant when commercial banks were allowed to enter via Section 20 subsidiaries but persists beyond. Commercial bank entry into underwriting appears to have a procompetitive effect that lasts many years after their initial entry. [ABSTRACT FROM AUTHOR]

Presents an abstract of a research paper entitled `Bank-Firm Relationships and the Development of Interlocking Directorates in the Kaiserreich,' by Caroline Fohlin, presented at the annual meeting of the Economic History Association.

The article discusses the evaluation of bank performance and comments on the paper, "A Canonical Analysis of Bank Performance" by Donald R. Fraser, Wallace Phillips Jr., and Peter S. Rose. The author reports on the statistical aspects of the multivariate canonical analysis conducted by Fraser and his colleagues. The canonical analysis reduces the problematic dimensions of examining the relationship between the components of performance and determinants in commercial banks in Texas. Also, the correlation coefficients have their variances kept constant through this analysis.

This paper analyses the mechanisms through which capital flows produced financial instability in Spain over a 165-year period. We study why and how capital bonanzas make crises more likely and severe, and whether their incidence varies depending on types of crises (currency, banking and debt crises). We conclude that most of them occurred in different monetary policy regimes, but they were associated with capital bonanzas in a liberal regulatory framework, both of which contributed to a higher likelihood and greater severity of crises. The analysis of the different monetary policy regimes, financial structures and the types of crises allows us to draw some policy implications that emphasise the need for sound financial regulation and supervision. [ABSTRACT FROM AUTHOR]

There have been many efforts in recent years to explain differences in the performance of commercial banks. Interest has centered on the extent to which changes in a selected group of indices of bank performance are related to tile structure of bankinq markets and selected other factors thought to influence bank behavior. While various tecnniques have been used, the most common has been multiple linear regression. The measures of performance entered into the regression equations have included the price and quantity of bank services and bank profitability, while the explanatory variables have included, to name only a few, the one-, two-, or three-bank concentration ratio, the number of banks in the market, the existence of competition from nonbank financial institutions, bank costs, bank size, and proxies for the demand for banking services. Generalizations then have been made about the impact of market structure and other variables on bank performance, generalizations based upon the regression coefficients of the explanatory variables. The consensus appears to be that the demand for banking services and bank costs are significant determinants of the performance of individual commercial banks; market structure appears to be much less important. However, the conclusions are by no means unanimous. Numerous conceptual and data problems are common to these studies. Not the least of these limitations is the isolated treatment of each of the performance variables. In fact, the performance of commercial banks should not be measured by a single proxy variable, such as the loan rate or bank profits, but by a set of variables which are jointly determined by market structure, demand, and other factors. The specification of the model should not rest upon a single measure of bank performance (as in the regression studies cited above) but should be multivariate (for example, a set of simultaneous equations). The purpose of this paper is to report the results of the... [ABSTRACT FROM AUTHOR]

The article presents commentary on the reports "Risk, Return and the Morphology of Commercial Banking," by John T. Emery and "The Pricing of Bank Deposits: A Theoretical and Empirical Analysis," by Michael A. Klein and Neil B. Murphy, both included within the issue. Both models of systematically describing banking market and firm behavior are complimented and contrasted with each other, particularly in regards to the use of rent and portfolio theories.

This paper surveys the recent academic literature on the economics of cross-border regulatory cooperation as well as recent policy developments in this area. While institutional arrangements of cross-border regulatory cooperation used to focus on day-to-day supervisory tasks, the crisis has given an impetus to a focus on cooperation at the bank resolution stage, with an array of different cooperation forms. A growing theoretical literature has documented different externalities arising from national supervision of cross-border banks, while empirical evidence has been relatively scarce. The paper concludes with a forward looking agenda both for policy reform and academic research in this area. [ABSTRACT FROM AUTHOR]

We measure crypto and financial literacy using microdata from the Bank of Canada's Bitcoin Omnibus Survey. Our crypto literacy measure is based on three questions covering basic aspects of Bitcoin. The financial literacy measure we use is based on three questions covering basic aspects of conventional finance (the "Big Three"). We find that a significant share of Canadian Bitcoin owners have low crypto knowledge and low financial literacy. We also find gender differences in crypto literacy among Bitcoin owners, with female owners scoring lower in Bitcoin knowledge than male owners. We do not, however, find significant gender differences in financial literacy amongst Bitcoin owners. In contrast, non-owners show gender differences in both crypto and financial literacy. [ABSTRACT FROM AUTHOR]

This paper links banking system development to the colonial and legal history of African countries. Based on a sample of 40 African countries from 2000 to 2018, our empirical findings show a significant dependence of current financial institutions on the inherited legal origin and the colonization type. Findings also reveal that current financial legal institutions are not major determinants of banking system development, and that institutional development and governance quality are more important. A high share of government spending relative to GDP also positively affects banking system development in African countries. [ABSTRACT FROM AUTHOR]

This paper seeks to provide a theoretical explanation for the weak association between measures of financial structure—as defined by the mixture of bank-based and market-based financial systems in an economy—and economic development. Lenders fund risky investment projects of firms by drawing up loan contracts in the presence of an informational asymmetry. An optimal contract entails the issue of debt, equity, or a mix of the two. The equilibrium choice of contract and the financial structure depend on the state of the economy, which in turn depends on the contracting regime. Based on this analysis, the paper provides a theory that can explain the wide diversity of financial structure among middle-income countries. [ABSTRACT FROM PUBLISHER]

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Argues that changes in the regulatory environment help greatly to explain the movements in circulation and increased bank entry. The reduction in circulation can be traced to an 1882 change in the law that allowed banks to divest their bond holdings; A model linking regulation and national bank note issue; The market for real paper money; Empirical tests; Conclusion.

This paper introduces a new estimation method for arbitrary temporal heterogeneity in panel data models. The paper provides a semiparametric method for estimating general patterns of cross-sectional specific time trends. The methods proposed in the paper are related to principal component analysis and estimate the time-varying trend effects using a small number of common functions calculated from the data. An important application for the new estimator is in the estimation of time-varying technical efficiency considered in the stochastic frontier literature. Finite sample performance of the estimators is examined via Monte Carlo simulations. We apply our methods to the analysis of productivity trends in the U.S. banking industry. [ABSTRACT FROM PUBLISHER]

After the subprime financial crisis, the countries who were worst affected set about reforming legacy financial regulations. Given multiple similarities in the way they experienced the crisis and the similar complexions of their post-crisis economies and politics, the contrast between the UK and the Netherlands' approaches to breaking up their largest banks presents a puzzle for prevailing theories in the politics of financial regulation. Both countries explored a range of reform options using similar expert committees, but while UK policymakers determined that commercial and investment operations should be ring-fenced in the largest British banks, the Dutch reform program centered on the banks' own recommendations to change banking culture from the bottom up by developing a code of conduct and banker's oath. The paper traces this divergence to two related effects produced by the countries' contrasting majoritarian and consensus party systems: power sharing and coalition formation. Under conditions of high issue salience, both worked to encourage British policymakers to prioritize reform, while in the Netherlands each factor reduced party political responsiveness and de-emphasized alternatives to the banks' own reform prescriptions. The paper ultimately suggests that institutional democratic variables are worthy of greater recognition among scholars of business power and financial regulation. [ABSTRACT FROM AUTHOR]

The paper discusses the effects on growth of a systemic banking crisis as a result of debt defaults. These effects will come from the impact of credit rationing on consumption and credit and from the impacts of a significant rise in the spread between lending and borrowing rates for both producers and consumers. The analysis uses the dynamic stochastic general equilibrium version of the National Institute global model. The paper also investigates the impact on output of a permanent, regulation induced, rise in margins in the financial sector, taking into account the impacts of regulation on equity market valuations. [ABSTRACT FROM AUTHOR]

The current financial crisis has raised queries about the adequacy of the present regulatory regime. Whilst the immediate priority may be to plug the obvious holes in the system, there are some long-term generic problems with almost any system of financial regulation. This paper explores one such concern, i.e. the boundary problem. This arises because effective regulation, one that actually bites, is likely to penalise those within the regulated sector, relative to those just outside, causing substitution flows towards the unregulated. This boundary problem impacts on many proposals, such as 'narrow banking' and my own, with Avinash Persaud, for state and time-varying capital adequacy requirements. The question of how and where to set the boundary is considered. Such boundaries will always be criticised as leading to disintermediation, competitive inequality (no level-playing-field), inefficiency and higher spreads and borrowing rates; and such criticisms will be valid up to a point. The paper ends by discussing how best to respond. [ABSTRACT FROM AUTHOR]

The financial crisis that started in August 2008 has reached a climax in the autumn of 2008 with a wave of bank nationalisations across North America and Europe. Although banking crises are not uncommon, this is the largest since 1929-33. This paper discusses the build-up to the crisis, looking at the role of low real interest rates in stimulating an asset price bubble. That bubble was stocked by financial innovation and increases in lending. New financial products were not stress tested and have failed in the downturn. After discussing the bubbles we look at the collapse of the complex asset structure, and then put the crisis in the context of the literature. The paper concludes with a discussion of policy implications of the crisis, and advocates a significant improvement in the regulatory structure. [ABSTRACT FROM AUTHOR]

In this paper the co-responsibility of the North for the development of the South, the chance of an authentic development and Rawls's maximin rule are indicated as the ethical perspectives from which the financial integration of developing countries will be evaluated. It follows a brief economic analysis of possible problems of high inflows of portfolio investments for developing countries. They become more vulnerable to financial and monetary crises and their domestic banking systems are weakened by a higher risk of devaluation. This will lead to an outline of the goals for reshaping the financial integration: among others limitation of capital inflows, strengthening of the domestic banking system and further development of the country's particular economic style. Finally some regulations of external financial relations and the proposal of a cooperative monetary arrangement between the South and the North are discussed as possible measures to improve this integration. [ABSTRACT FROM AUTHOR]

The paper examines the determinants of contract terms on bank revolving credit agreements (revolvers) of medium/large publicly traded companies. We model the duration (maturity), secured status, and pricing decisions within a simultaneous decision framework, thereby overcoming the biased and inconsistent estimates in prior single equation studies of debt contract terms. We find strong interrelationships between contract terms with significant bi-directional relationships between duration and secured status and between the all-in-spread and commitment fees and a unidirectional relationship from both duration and secured status to all-in-spread. We also illustrate how several single equation studies of contract terms draw incorrect conclusions because of their (inappropriate) assumption that other contract terms and leverage were exogenous. Finally, our results support the hypothesis that the setting of contract terms plays an important role in alleviating contracting problems. [ABSTRACT FROM AUTHOR]

Using firm-level survey information, we investigate whether relationship lending affects firms' employment decisions in the face of negative sales shock. We find that firms with a durable relationship with their main bank display significantly less employment growth sensitivity to such shocks, especially where these are transitory. The result is stronger for younger and smaller firms that benefit from tighter bank-firm relationships, and for firms in sectors or economic environments where the costs of employment adjustment are greater. Our findings indicate that relationship lending provides liquidity insurance to firms to meet their demand for labor hoarding. [ABSTRACT FROM AUTHOR]

This paper reviews the market failures that may justify the need for liquidity regulation, assesses whether liquidity regulation is a necessary complement to Lender of Last Resort (LOLR) policies, capital regulation and prompt corrective action, surveys the available evidence on the net benefits of liquidity regulation, and concludes by outlining research directions useful to improve bank regulation design. [ABSTRACT FROM AUTHOR]

Women remain underrepresented in cabinets, especially in high-prestige, "masculine" portfolios. Still, a growing number of states have appointed women to the finance ministry—a powerful position typically reserved for men. Drawing on the "glass cliff" phenomenon, we examine the relationship between financial crises and women's ascension to, and survival in, this post. With an original dataset on appointments to finance ministries worldwide (1972–2017), we show that women are more likely to first come to power during a banking crisis. These results also hold for currency and inflation crises and even when accounting for the political and economic conditions that might otherwise explain this relationship. Subsequent examination of almost 3,000 finance ministers' tenures shows that, once in office, crises shorten men's (but not women's) time in the post. Together, these results suggest that women can sometimes seize on crises as opportunities to access traditionally male-dominated positions. [ABSTRACT FROM AUTHOR]

In this paper a detailed analysis of undular bore dynamics in channels of variable cross-section is presented. Two undular bore regimes, low Froude number (LFN) and high Froude number (HFN), are simulated with a Serre–Green–Naghdi model, and the results are compared with the experiments by Treske (1994). We show that contrary to Favre waves and HFN bores, which are controlled by dispersive non-hydrostatic mechanisms, LFN bores correspond to a hydrostatic phenomenon. The dispersive-like properties of the LFN bores is related to wave refraction on the banks in a way similar to that of edge waves in the near shore. A fully hydrostatic asymptotic model for these dispersive-like bores is derived and compared to the observations, confirming our claim. [ABSTRACT FROM AUTHOR]

The Asian Infrastructure Investment Bank [AIIB] is the world's newest multilateral development bank [MDB] and already one of Asia's largest international organizations by membership. This paper will compare the institutional structure of the AIIB with that of the Asian Development Bank [ADB] to identify areas in which the AIIB has innovated as a matter of international institutional law. In reviewing the constituent documents, bylaws, and operational policies of the two banks, the paper will juxtapose the AIIB and ADB's approaches to membership, project finance, voting, and governance. It will identify not only innovations, but also the likely implications, positive and negative, thereof. Finally, it will assess the degree to which these innovations may impact the AIIB's ability to partner with existing MDBs. In particular, the AIIB's approach to project finance and governance mark a significant break from the status quo, while in other areas it has remained conservative. [ABSTRACT FROM AUTHOR]