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Copyright of Ekonomista is the property of Polskie Towarzystwo Ekonomiczne & Institute of Economic Sciences of the Polish Academy of Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In a context of economic volatility, multiple crises, and growing environmental concerns, the optimization of physical and financial flows has become imperative for businesses. In a classical Inventory Routing Problem (IRP), only the physical flow of goods is considered. This paper introduces a link between a two-echelon Inventory Routing Problem and the financial flows of the Working Capital Requirement, where the products are dispatched from warehouses to fulfill customer demand. We propose a two Echelon Inventory Routing Problem under Working Capital Requirement (2E-IRP-WCR) model which allows us to evaluate the integration of physical and financial flows so as to further reduce the total cost, where the total cost consisting of ordering and inventory costs, transportation costs and financial costs. Numerical tests, established for multi-suppliers, multi-warehouses, multi-customers, single-product and finite capacity cases, are presented to demonstrate the pertinence of our approach. [ABSTRACT FROM AUTHOR]

The article discusses the book "Clearing OTC Derivatives in Europe" by Bas Zebregs, Victor de Seriere, Rezah Stegeman, and Patrick Pearson. The book provides valuable insights into the history and current regulatory regime of clearing over-the-counter derivatives (OTC) in Europe. It covers topics such as the legal relationships between CCPs, clearing members, and clearing clients, the economic function of a CCP, the fragmentation of clearing, and the optimal structure of CCPs. The book also addresses issues related to default management, the resolution regime for CCPs, and the future of derivatives clearing, including the use of distributed ledger technology. Overall, the book offers a comprehensive analysis of the past, present, and future of derivatives clearing in a thorough and understandable manner. [Extracted from the article]

The role of entrepreneurship in inclusive development of the economy is widely recognised by policy makers and academicians. The present study analyses various dimensions of entrepreneurship among one of the disadvantaged groups in India, namely, the SCs. The study used primary data collected from 162 SC and 60 non-SC entrepreneurs in five districts of Telangana. The findings of the empirical investigation indicate that there is a changing attitude of entrepreneurship among the SCs. Countering the previous studies on entrepreneurship among disadvantaged groups in India, the present study indicates that entrepreneurship among the SCs is positively motivated with dominance of nonpecuniary motives and they are eager to be independent rather than being in the shadow of economic distress. Moreover, SC entrepreneurs are involved in similar value-added sectors like others, managed to employ similar level of fixed capital and workers as others, managed to report similar level of growth in size, and managed to secure formal credit like banks for their fixed capital requirements. [ABSTRACT FROM AUTHOR]

In the aftermath of the Global Financial Crisis, financial regulation uses micro and macroprudential rules, most of the time motivated by empirical studies. This article suggests a theoretical explanation for countercyclical and progressive capital requirements that incorporate micro- and macro-prudential stabilization objectives. The Capital Adequacy Ratio (CAR) imposed to individual banks by a Prudential Authority (PA) would thus represent an optimal regulation whose aim is to avoid individual and systemic risk accumulation by imposing minimal constraints to financial institutions. This corresponds to the implementation of optimal time-varying prudential capital requirements to banks, with non-linear structure, that allows PA to take progressive countercyclical actions in order to ensure financial stability. We also test the mechanism in a DSGE model and show that it would be more suitable for the financial and real stability compared to the existing fixed prudential ratios. [ABSTRACT FROM AUTHOR]

Most of prudential regulations apply to national institutions while, in practice, banks operate at the global level, generating international banking flows which are not comprehensively captured by policies with a domestic remit. This may give rise to spillovers, i.e., effects not considered ex ante in the objectives and/or constraints of authorities in charge of prudential policy, the effectiveness of which may be harmed. Using BIS data on foreign bank lending over a large sample of countries, we investigate international spillovers from French prudential policies. Overall, we show that French prudential policies entail a reduction in foreign banks' lending to French residents. Yet some measures may lead to undesired leakages that potentially undermine authorities' goals: foreign bank affiliates' exposure to France rose by 1.1% (1.9 Bn USD) on average over 2011–17 owing to the implementation of Basel capital requirements. [ABSTRACT FROM AUTHOR]

We assess if capital ratios reduced the occurrence of banking crises in the European Union from 1998 to 2017. We use a Probit model and estimate the effect of two measures: the bank capital to total assets ratio and the bank regulatory capital to Risk Weighted Assets (RWA). We found that both measures affect negatively the probability of crisis. This result is robust to the exclusion of outliers, to the inclusion of various control variables for banking, financial and macroeconomic risks. Finally, we show that while the bank regulatory capital to RWA has always a negative effect on the probability of crisis, the bank capital to total assets ratio is only significant above a threshold, estimated between 10 ​% and 12 ​%. [ABSTRACT FROM AUTHOR]

Both equity and regulation play key roles in determining the ability of banks to create credit. Equity varies endogenously, while regulations are exogenously imposed. This study proposes a banking model to investigate how changes in bank equity due to interest receipts and expenditures affect credit and money creation under Basel III regulations. Four Basel III regulations—the capital adequacy ratio, the leverage ratio, the liquidity coverage ratio, and the net stable funding ratio—are discussed. Their effect on credit creation are demonstrated by the changes that occur in the credit supply in response to the changes in equity arising from interest payments. This study identifies seven regulatory scenarios under these four regulations. In each scenario, there exists a multiplier that relates the change in equity to the resultant change in the credit supply. Correspondingly, there is a multiplier effect on the money supply. This study sheds new light on how bank equity and Basel III regulations affect credit and money creation. • Banks respond to changes in their equity by creating credit and money. • Consequently, there exist multiplier effects on their credit and money supply. • This study shows seven regulatory scenarios under Basel III regulations. • The multipliers depend on the specific scenario. • Under liquidity coverage ratios, increasing equity may reduce the credit supply. [ABSTRACT FROM AUTHOR]

This research intends to investigate whether the "bank capital channel" does exist, by examining the relationship between bank capital and liquidity creation through 35 Asian countries over the period 2001–2018 and contributes to the literature in several respects. First, this study confirms the existence of the "bank capital channel" and solves the puzzle between the "risk absorption" hypothesis and the "financial fragility-crowding out" hypothesis. Our results reveal that strongly-capitalized banks retain more liquid assets, but do not lend more. Second, we explore the role of liquidity on the effects of bank capital and lending. Third, this study investigates whether the effect of bank capital on lending differs depending upon the role of political risk. Higher political risk leads to a higher level of uncertainty and results in a decrease of liquidity creation; only properly-capitalized banks are able to increase their liquidity creation. Our robustness tests also reveal that the "risk absorption" effect remains for commercial banks and large banks. However, cooperative banks have a greater positive effect on the banking capital channel probably due to differences in capital requirements. We also consider the effects of concentration and a financial crisis and find that liquidity creation drops under higher competition and during a crisis period. Lastly, we discuss policy implications. [ABSTRACT FROM AUTHOR]

This paper presents a model to capture the impact of the Basel III's Liquidity Coverage Ratio (LCR) and the reserves requirement regulation on the banking sector and the real economy. It employs a medium-scale Dynamic Stochastic General Equilibrium (DSGE) model with financial frictions and calibrated to match data for Indonesia. The study shows that the impact of changing the two liquidity requirements on lending and output are relatively similar. However, lowering the LCR has consequences on the decline of demand for government bonds, so that it has a different impact on taxes, household deposits and bank's profit. This paper also found that countercyclical liquidity regulations can improve welfare and reduce the volatility of bank loans. [ABSTRACT FROM AUTHOR]

This paper investigates the performance of European and U.S. banks since Basel III. Key findings in the literature as well as multi-year bank performance data are summarized. With a focus on the regulatory requirements on capital adequacy and liquidity and how they affect profitability, we find evidence of improving safety standards across the board. Banking regulation addresses two critical aspects of risk management: capital adequacy and liquidity. Liquidity risk stems from the likelihood that a depository financial institution may not have sufficient funds to meet its recurring payment obligations. To that end, the key reason for bank regulation on liquidity is to address concerns over the safety and stability of banks and the payments system. Capital adequacy deals with the minimum capital capable of absorbing any unforeseen losses from credit, market, and operational risks to which banks are exposed. The goal of capital adequacy is to keep total bank capital sufficiently high so that the chance of bank failure is prevented when financial losses mount. Capital adequacy ratio (CAR) takes into account a bank's ability to pay its liabilities and respond fully to the risk of any such financial losses. A bank with strong CAR has more than sufficient capital to absorb these losses and therefore less likely to become insolvent. Banks in the EU lead their US counterparts in terms of safety but lag in terms of profitability. There is evidence that the strive toward higher capital and liquidity standards comes with the price of reduced profitability. Notwithstanding, most studies agree that while the new standards impose additional costs, they are necessary for ensuring the stability and sustainability of the financial system. [ABSTRACT FROM AUTHOR]

We assess the effect of loan growth and capitalization on credit risk in Islamic banking. Using a sample of Islamic banks from 29 countries, our empirical results reveal that higher loan growth exacerbates credit risk one year ahead, particularly for Islamic banks with higher capitalization. However, a deeper investigation highlights that such evidence is more pronounced after the 2008 global financial crisis (GFC). Hence, strengthening prudential tools and supervision for Islamic banks with higher capitalization is necessary to mitiate moral hazard and ensure prudent lending behavior in the aftermath of the GFC. Likewise, strengthening capital requirements is not enough to ensure prudent lending behavior in Islamic banking. [ABSTRACT FROM AUTHOR]

This research analyzes for the effect of cash compensation, charter value, and capital requirements on risk-taking as measured by non-performing loans (NPL), loan-todeposit ratio (LDR), and operational risk (OR). This research sample includes 28 banks listed on the Indonesia Stock Exchange (IDX) in the period 2006-2017 with 336 observations. The analytical method of the research employed the random-effects model and common effect model. The results of the research indicate that cash compensation and charter value have a significantly negative impact on NPL, LDR, and OR. This research has limitations because it used a measure of compensation with cash incentives and risk-taking with an accounting risk approach. [ABSTRACT FROM AUTHOR]

This paper focuses on the economic performance of immigrants admitted through the diversity immigrant visa program otherwise known as the DV lottery. The question of interest is: does the human capital eligibility requirement improve the economic performance of diversity immigrants compared to immigrants in other admission categories? Using the first round of the New Immigrant Survey, the results indicate that diversity immigrants were less likely to be home owners than immigrants admitted as spouse of U.S. citizens. In addition, diversity immigrants were less likely to work for pay than immigrants admitted through the employment admission category. [ABSTRACT FROM AUTHOR]

This paper focuses on the economic performance of immigrants admitted through the diversity immigrant visa program otherwise known as the DV lottery. The question of interest is: does the human capital eligibility requirement improve the economic performance of diversity immigrants compared to immigrants in other admission categories? Using the first round of the New Immigrant Survey, the results indicate that diversity immigrants were less likely to be home owners than immigrants admitted as spouse of U.S. citizens. In addition, diversity immigrants were less likely to work for pay than immigrants admitted through the employment admission category. [ABSTRACT FROM AUTHOR]

In the new century, the rapid transfer of information and the lack of time and physical limits by increasing the importance of information technologies, the organizations have changed the way of doing business. In this context, the field of activity where the virtual organizations formed by the expert organizations coming together and working on the internet is the trade done over the internet. The entrepreneur who wants to create differences can choose internet entrepreneurship for reasons such as low initial capital requirement, low operating expenses and access to broad markets.Virtual organizations are looking for new value-added strategies for internet entrepreneurial activities. Influenced by this change, internet entrepreneurs had to differentiate their brand positioning strategies in order to benefit from opportunities. The aim of this paper is to explain the entrepreneurship model which is new entrepreneurship model and to explain the digital brand positioning strategies of virtual organizations by giving examples from youtube, instagram and facebook. It is expected that the theoretical approach of this study will be supported with subsequent field studies and will give a direction to the researches. [ABSTRACT FROM AUTHOR]

We analyze how capital requirements from environmental risk exposure affect bank lending to the corporate sector, and how these effects transmit to real economic activity and to greenhouse gas emissions. To do so, we exploit the introduction of a policy in Brazil that required banks to incorporate environmental risks in their capital assessments. Using comprehensive credit data, we find that the policy induces large banks to reallocate their lending away from exposed sectors. The credit contraction has no substantial impact on the real activity and greenhouse gas emissions of these sectors, as smaller banks expand their lending afterwards. However, the policy triggers a moderate labor reallocation from small firms (i.e., those with higher costs of switching lenders) and into large firms within environmentally exposed sectors. [ABSTRACT FROM AUTHOR]

• Most financiers believe that transition to low/zero-carbon shipping is underway but slow. • They mostly believe fossil cargo shipping will not decrease significantly in the near future. • They believe the risk that the ships they have financed will be stranded is limited. • Many banks want to support their existing clients in the transition, due to the importance of their business relationships. • Whether alternative financiers and institutional investors will support existing shipowners or new entrants is not clear. Ship financiers play an important role in the shipping industry's transition to a low carbon economy as they shape the financing terms provided to shipowners and the type of assets that are financed, but their transition-related beliefs are unclear. This paper proposes a novel theoretical framework which categorises financiers during low-carbon transitions into five archetypes. It also provides novel empirical insights on the beliefs and ambitions of shipping financiers regarding their future role and the risks to their assets using semi-structured interviews with ten financiers and two shipowners. The results show that the majority of interviewees expressed an ambition to support incumbent shipowners in the transition, but expressed the need for regulation to ensure financiers properly measure climate risks (e.g. the EU taxonomy and differentiated capital requirements for green and brown assets). This highlights the potential, but also the limits, of voluntary initiatives from financiers to promote green investments. [ABSTRACT FROM AUTHOR]

In addition, amendments have been made such that the notice issued by MAS may apply to a single bank incorporated in Singapore (in addition to a class of banks incorporated in Singapore). The new s. l OC of the BA formalises MAS's power to impose such funding requirements on banks to ensure a bank has a stable and sustainable funding structure for its activities. [Extracted from the article]

Copyright of Cumhuriyet Üniversitesi Fen-Edebiyat Fakültesi Sosyal Bilimler Dergisi is the property of University of Cumhuriyet, Faculty of Sciences & Arts and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This research paper represents the culmination of a joint faculty and undergraduate student collaboration that addresses comments in the financial press asserting banks are categorizing a greater percentage of their debt investments as held-to-maturity (HTM) rather than available-for-sale (AFS) in preparation of the Basel III Accord regulations. If a decline in the market values of AFS securities is anticipated, then banks will be more inclined to categorize their debt investments as HTM to avoid decreases to their capital ratios. An alternative explanation is that banks are increasing their liquidity in response to the tightening of monetary policy. Results support the alternative explanation. [ABSTRACT FROM AUTHOR]

Copyright of Ensayos Sobre Política Económica is the property of Banco de la Republica and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Against the backdrop of the Great Recession, investigating the differences in institutional frameworks became important to explain the heterogeneity in the market perception about the credit quality and default risk of banks in different countries. Using data for 118 banks of 30 countries over the period 2004–2011, we find that an improvement of the quality of economic and legal institutions can help in reducing banks' CDS spreads, as banks operating in countries where the regulatory quality is stronger tend to be less affected by spikes in financial stress of 2008–2009. Considering a series of indicators of the financial structure of the banking system, our results reveal that more concentration of the banking sector, a stronger presence of foreign banks, a deterioration of the banking sector health or the lack of alternative means of finance is associated with higher CDS spreads of banks. We also show that the dynamics of bank CDS spreads accrue to: (i) the quality of banks’ balance sheet; (ii) (il)liquidity of banks’ assets; (iii) how profitable banks’ operations are; and (iv) the banks’ leverage ratios. Finally, higher CDS spreads of banks tend to be associated with periods of high inflation and low GDP growth. [ABSTRACT FROM AUTHOR]

Economics is the engine that drives industry. For complete understanding of project economics four major items must be discussed; capital requirements, operating expenses, cash flow and profitability measures. Petrochemicals in general are compounds and polymers derived directly or indirectly from petroleum. C 6 –C 8 aromatics are petrochemical intermediates that include benzene, toluene and xylenes. This research work aims to execute a financial model template using MICROSOFT EXCEL PROGRAM which can be applied on any industry to check its profitability. Two configurations for aromatics production had been considered as a case study for model application, Configuration I for the production of benzene, toluene and xylenes and Configuration II for the production of benzene and para xylene only based on 3 million tons of straight run naphtha feedstock. In addition, the economic effect of the integration between Configuration II and MIDOR refinery had been studied. The designed and initiated financial model performed in this paper is applied on a real and existing petrochemical project to check its validation. The economic indicators calculated using the initiated financial model were found to match with the actual status of the project. The research resulted in; Configuration I and II are not profitable under the mentioned basis. The integration between Configuration II and MIDOR refinery is more profitable than the standalone one. Configurations I and II shall be feasible if the quantity of naphtha feedstock increases to 70,000 and 5500 thousand tons per year respectively. Configurations I and II shall be feasible if the discount in naphtha feedstock price reaches to 9% and 4.5% respectively. [ABSTRACT FROM AUTHOR]

The paper presents various GLM models using individual rating factors to calculate the solvency capital requirements for non-life underwriting risk in insurance. First, we consider the potential heterogeneity of claim frequency and the occurrence of large claims in the models. Second, we analyse how the distribution of frequency and severity varies depending on the modelling approach and examine how they are projected into SCR estimates according to the Solvency II Directive. In addition, we show that neglecting of large claims is as consequential as neglecting the heterogeneity of claim frequency. The claim frequency and severity are managed using generalized linear models, that is, negative-binomial and gamma regression. However, the different individual probabilities of large claims are represented by the binomial model and the large claim severity is managed using generalized Pareto distribution. The results are obtained and compared using the simulation of frequency-severity of an actual insurance portfolio. [ABSTRACT FROM AUTHOR]

Copyright of Cumhuriyet Üniversitesi Fen-Edebiyat Fakültesi Sosyal Bilimler Dergisi is the property of University of Cumhuriyet, Faculty of Sciences & Arts and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

A majority of U.S. banks between 1973 and 2012 held equity capital significantly beyond the required minimum. We study the risk-return tradeoff in connection with a bank’s capital structure, and identify several new significant market factors that drive the level of equity capital in banks. During normal growth periods, bank leverage is negatively related to a level of competition and loan portfolio diversification, while high bank leverage is associated with low past liquidity. During recessions and expansions, the roles of those factors change following distortions in risk-return tradeoff. In distress, when banks approach regulatory capital requirements, market determinants of book leverage lose their significance; however, leverage does not decrease until a bank is within 1% of the minimal capital threshold. [ABSTRACT FROM AUTHOR]

Monetary authorities around the world are implementing enhanced banking capital adequacy requirements under Basel III meant to improve financial stability. Critics however argue that increased capital requirements concentrate the banking industry reducing competition while not guaranteeing financial sector stability. Using data from 167 banks in 37 African countries, we find that increased capital beef-up significantly increases financial instability in Africa (except in big banks) implying that higher capital requirements did not make African banks safer. We also find that increased regulatory capital improves competitive pricing for foreign banks while it makes domestic banks less competitive mainly attributed to the high cost of sourcing and holding extra capital for domestic banks compared to foreign banks who can source cheaper capital from parent companies. The results put to question the effectiveness of enhanced regulatory capital on stability and competitiveness of the African financial system. [ABSTRACT FROM AUTHOR]

Can countercyclical bank capital buffers reduce the negative effects of global liquidity shocks? We use the Lehman Brothers bankruptcy as a natural experiment to document the role of the banking system as a transmission channel of global financial disturbances to the real economy. Using central bank administrative data, our results suggest that in the aftermath of the Lehman collapse the banking channel is responsible for 1.44% of the aggregate drop in investment and 0.58% of the drop in aggregate employment. In order to evaluate the effectiveness of counter-cyclical macroprudential policies, we model an open-economy with a banking sector. We compare the drop in actual GDP during the 2008 financial crisis against the counterfactual GDP had Basel III style counter-cyclical capital buffers (CCyB) been in place. We find that the GDP drop in the counterfactual scenario would have been 6 p.p. lower than in the data. We also demonstrate the beneficial effects of the CCyB in mitigating tail risk (GDP at Risk). We show that, over a 3–5 year horizon, the GDP distribution with an operational CCyB would have a higher mean and a much thinner left tail when compared to an economy without a CCyB. [ABSTRACT FROM AUTHOR]

• Bank specific capital requirements (P2R) are mainly driven by long-term determinants related with size (-), credit risk (+), reputational risk (+) and funding risk (+). • Short run changes to P2R are explained by bank profitability (-) and market risk exposures (+). • P2R decisions are heterogeneous with respect to capital, size, and access to market funding. This paper studies the determinants of the Pillar 2 capital requirements (P2R) of banks directly supervised by the ECB between 2016 and 2021. Drawing on the ECB's Supervisory Review and Evaluation Process (SREP) to identify the list of potential drivers of P2R, we estimate the impact on P2R by employing a method that separates long-run from short-run determinants. Our results suggest that in (i) the long-run, the P2R is mostly driven by credit risk, funding risk, and governance, whereas (ii) profitability and market risk seem to be the main short-run determinants of P2R. Furthermore, we find evidence that suggests the supervisor incorporates proportionality in the P2R decisions. Effectively, our sensitivity analyses show considerable differences in the long-run determinants of P2R according to the level of capital, size, and access to market funding of supervised entities. [ABSTRACT FROM AUTHOR]

Customer confidence in a bank is given and the amount of capital you subscribe shareholders and increases depending on the strategy of each institution. From customer relationships are a series of risks that can be amortized especially through adequate capital. Investments entrepreneurs made using credit institutions are central to economic development and represents mainly the purchase of plant and equipment, structures, machinery and inventory, for the development of production and services. Risks assumed by banks in this relationship are strengthened by capital requirements recommended by the Basel Committee. Subscribed capital increase recorded since the establishment under European regulations and directives. [ABSTRACT FROM AUTHOR]

The main objective of this work is to highlight the role that the methods and techniques for the management of banking risks have in internal process the capital adequacy at risk in the future and to reflect the continued growth of the banking risks in the contemporary age, in conjunction with the intensification of cooperation that led to the internationalizing of regulations, within the meaning of the development of national rules in accordance with the principles accepted by several countries, the kind of international groups of studies organized by the Bank for International Settlements the Basel Convention or the application of Community rules, drawn up in the form of the Directives of the European Communities. The work has the research field the theoretical and practical aspects of the completion of the internal process the capital adequacy at risk in banks. [ABSTRACT FROM AUTHOR]

New risk based capital requirement have pro-cyclical effect and causes negative externalities in the economy. During recession, on one side, quality of loan portfolio deteriorates and probability of default increases resulting into increased level of provisions and write off's and reduced capital level. This causes an increase in capital requirements which becomes more expensive. Weaker banks fail to access new capital and ultimately reduce the credit supply. On the other side, banks are required to maintain the minimum capital which results into credit supply contraction and hits the bank's profitability leading to a situation called Credit Crunch. This situation may prolong recession. During the crisis, developing countries are more affected than developed countries and this debate is entirely new in Pakistan. This research empirically investigates the pro-cyclical effect of new capital regulation under Basel II using panel data of 47 Pakistani Banks from 2001-2012. Particularly this paper examines the capital management mechanisms using capital buffers, using Generalized Method of Moments (GMM) one step and two step estimation techniques on dynamic panel data model. The results gives evidence that capital buffer are counter-cyclical except in case of specialized banks because of difference in operations. The findings also suggest that adjustment costs, cost of raising capital and bankruptcy costs are major determines of holding capital buffer. Analysis confirms too big to fail hypothesis. Form the results, it is concluded that capital buffer are counter-cyclical, consistent with the hypothesis. The findings suggest the banks to adopt Basel III Accord. [ABSTRACT FROM AUTHOR]

This paper simulates the effects of credit risk, changes in capital requirements and price shocks on the Brazilian banking system. We perform the analysis within the context of a model that integrates data on bilateral exposures in the interbank market with information about the liquidity profile of each financial institution. Asset prices in the model are determined endogenously as a function of the total volume of fire sales, thus creating the possibility that marking to market may trigger new rounds of fire sales and downward asset price spirals. The simulation results show that the Brazilian banking system is robust, as relatively large increases in the NPL ratio lead to only modest losses in the system. We also compute the contribution of each financial institution to systemic losses under severe shocks and find that contributions from medium-sized banks can be significant. However, if shocks become more severe, only large banks will contribute significantly to systemic losses. [ABSTRACT FROM AUTHOR]

The procyclicality of the regulatory capital requirement in the aftermath of the international finance crisis have been paid a lot of attention by researcher and regulators. It is pointed out that the risk-sensitive capital requirement in Basel Accord II drives the problem of procyclicality which amplified the economic cycle fluctuation and made the banking system a shock amplifier while not a shock absorber. In this paper, on the basis of China's 16 major commercial banks in 2004-2014 panel data, the researcher analyzes the relationship between macro-economic cycle and capital adequacy ratio to test whether there exists procyclical effect or not within. The empirical result shows that the capital adequacy ratio changes have procyclical effect on China's commercial banks. [ABSTRACT FROM AUTHOR]

In the paper we seek an explanation of disparities in the required minimum levels of the capital adequacy ratio. Attention is given to 40 European countries mainly in the pre-crisis period. Cluster analysis results justify a need for a discretionary approach of the national prudential authorities when adopting the supranational prudential recommendations, to be more precise, Basel Committee conclusions. In such a manner, lower regulatory burden, i.e. lower minimum level of capital adequacy ratio in this case, is and should remain a privilege of the more transparent, ethical and accountable economic systems with better country credit rating, higher GDP per capita and lower inflation rate. Despite insignificance of the banking sector variables in the cluster analysis, when linear regression method is adopted, variables such as bank concentration indicator and asset quality have the highest explanatory power. A conclusion can be made that the set-up of the minimum capital adequacy ratio should be carefully planned due to threats of loss in the economic output if the banking sector is over-regulated or on the other hand increased financial instability in case of being under-regulated.23 [ABSTRACT FROM AUTHOR]

We optimize the design and time-varying operation of a CO 2 -capture-enabled power station burning coal and natural gas, subject to a CO 2 emission intensity constraint. The facility consists of a coal-fired power plant and an amine CO 2 capture system, which is powered by a combined-heat-and-power auxiliary gas-fired subsystem. The detailed design of the CO 2 capture system, the detailed heat integration of the facility, and time-varying operations schedule across all hours of the year are determined in a single optimization problem. This problem is formulated as a bi-objective mixed integer nonlinear program: objectives include minimizing total capital requirement (TCR) and maximizing net present value (NPV). Because the Aspen Plus model used for the CO 2 capture system is too computationally intensive to use directly in optimization runs, we develop a statistical proxy model of the capture system that reproduces Aspen Plus results but is several hundred times faster. The integrated proxy model includes statistical submodels for the CO 2 absorption and solvent regeneration blocks, as well as simple physical models of other system components. Incorporating the detailed CO 2 capture system in the optimization provides important design information such as the optimal number of CO 2 capture trains required. Two scenarios are considered, based on historical data for Texas and India. Results show that the choice of objective function can have a strong effect on planned operating profile (constant or variable operations). Similarly, hourly electricity price variability strongly affects design and plant scheduling. In the West Texas scenario, which has high price variability, the maximum NPV objective favors variable operations, with a CO 2 capture system utilization factor of 65.9% (out of a maximum of 85%), while the minimum TCR objective favors constant operations. In contrast, because of low electricity price variability in the India scenario, there is little value in time-shifting the demand for capture heat, so constant operations are favored in this case for both objectives. [ABSTRACT FROM AUTHOR]

The article explores the promise and the perils of top-down capital regulation with the strengths and weaknesses of a top-down regulatory system and the combination of a safe harbor high level of required capital combined with the potential for personal liability for managers of banks.

The article focuses on the analysis of capital arbitrage and its back-and-forth relationship with bank capital regulation and mentions that how financial institutions engage in regulatory capital arbitrage before the Financial Crisis of 2008.

The article discusses the traditional system of capital regulation and the distinctive elements of rulemaking and supervision in the bank regulatory regime and the foundation for proposals for significantly higher capital.

The adoption of the new prudential directive "Solvency II" urges insurance companies to improve their internal models in accordance with their own capital stocks, reserve, Solvency Capital Requirement in order to manage properly their risks. The reserve risk is considered as the main risk in non-life insurance determining the solvency capital. The aim of this paper is twofold: to model the reserve risk of a part of non-life portfolio and to evaluate the necessary capital to cover it under the internal model of the Solvency II project, taking into account the dependence between the branches. For this purpose, our analysis begins by assessing reserve risk over the ultimate horizon of payments development, using stochastic models and a simulation technique to determine the distribution of reserve, in the case of two insured risks; the motor damages and the motor third-party liability. Then, we use a copula theory modeling in order to detect the dependence between the two insurance business lines. Finally, we provide a comparative analysis of alternative schemes measuring adequately SCR under the independence and dependence cases for both standard and internal models. Using original data collected on Tunisian Insurance companies, our results reveal that internal model provides better estimates of solvency funds. [ABSTRACT FROM AUTHOR]

This study critically analyzes the regulatory and supervisory frameworks that govern Islamic banks in the dual banking systems of Pakistan, Malaysia, Bahrain, and the UK. We discuss their core regulatory functions and find that conflicting views among Islamic jurists and policymakers have aggravated shariarelated problems. Over the years, the regulatory framework in each country has developed in a certain way. Malaysia and Bahrain have established indigenous governance systems. Islamic banks in the UK still fall under the conventional setup, while in Pakistan, they are governed by an orthodox regulatory framework combined with an evolving Islamic banking regulatory system. However, the effectiveness of the existing regulatory frameworks has never been fully tested by the nascent Islamic banking industry, which remains very conservative. [ABSTRACT FROM AUTHOR]