Addressing Risk Challenges in a Changing Financial Environment:the Need for Greater Accountability in Financial Regulation and Risk Management

The need for continuous monitoring and regulation is particularly attributed to, and justified by, the inevitable presence of risks and uncertainty – both in terms of certain externalities and indeterminacies which are capable of being reasonably quantified and those which are not. Amongst other goals, this paper aims to address complexities and challenges faced by regulators in identifying and assessing risk, problems arising from different perceptions of risk, and solutions aimed at countering problems of risk regulation. It will approach these issues through an assessment of explanations put forward to justify the growing importance of risks, well known risk theories such as cultural theory, risk society theory and governmentality theory. “Socio cultural” explanations which relate to how risk is increasingly becoming embedded in organisations and institutions will also be considered as part of those factors attributable to why the financial environment has become transformed to the state in which it currently exists. A consideration of regulatory developments which have contributed to a change in the way financial regulation is carried out, as well as developments which have contributed to the de formalisation of rules and a corresponding “loss of certainty”, will also constitute focal points of the paper. To what extent are risks capable of being quantified? Who is able to assist with such quantification – and why has it become necessary to introduce other regulatory actors and greater measures aimed at fostering corporate governance and accountability into the regulatory process? These questions constitute some of the issues which this paper aims to address

Why stagnant? Behind the scenes in Indonesia's reformed state asset management policies

This study seeks to answer the question of “why is policy innovation in Indonesia, in particular reformed state asset management laws and regulations, stagnant?” through an empirical and qualitative approach, identifying and exploring potential impeding influences to the full and equal implementation of said laws and regulations. The policies and regulations governing the practice of state asset management has emerged as an urgent question among many countries worldwide (Conway, 2006; Dow, Gillies, Nichols, & Polen, 2006; Kaganova, McKellar, & Peterson, 2006; McKellar, 2006b) for there is heightened awareness of the complex and crucial role that state assets play in public service provision. Indonesia is an example of such country, introducing a ‘big-bang’ reform in state asset management laws, policies, regulations, and technical guidelines. Two main reasons propelled said policy innovation: a) world-wide common challenges in state asset management practices - such as incomplete information system, accountability, and governance adherence/conceptualisation (Kaganova, McKellar and Peterson 2006); and b) unfavourable state assets audit results in all regional governments across Indonesia. The latter reasoning is emphasised, as the Indonesian government admits to past neglect in ensuring efficiency and best practice in its state asset management practices. Prior to reform there was euphoria of building and developing state assets and public infrastructure to support government programs of the day. Although this euphoria resulted in high growth within Indonesia, there seems to be little attention paid to how state assets bought/built is managed. Up until 2003-2004 state asset management is considered to be minimal; inventory of assets is done manually, there is incomplete public sector accounting standards, and incomplete financial reporting standards (Hadiyanto 2009). During that time transparency, accountability, and maintenance state assets was not the main focus, be it by the government or the society itself (Hadiyanto 2009). Indonesia exemplified its enthusiasm in reforming state asset management policies and practices through the establishment of the Directorate General of State Assets in 2006. The Directorate General of State Assets have stressed the new direction that it is taking state asset management laws and policies through the introduction of Republic of Indonesia Law Number 38 Year 2008, which is an amended regulation overruling Republic of Indonesia Law Number 6 Year 2006 on Central/Regional Government State Asset Management (Hadiyanto, 2009c). Law number 38/2008 aims to further exemplify good governance principles and puts forward a ‘the highest and best use of assets’ principle in state asset management (Hadiyanto, 2009a). The methodology of this study is that of qualitative case study approach, with a triangulated data collection method of document analysis (all relevant state asset management laws, regulations, policies, technical guidelines, and external audit reports), semi-structured interviews, and on-site observation. Empirical data of this study involved a sample of four Indonesian regional governments and 70 interviews, performed during January-July 2010. The analytical approach of this study is that of thematic analysis, in an effort to identify common influences and/or challenges to policy innovation within Indonesia. Based on the empirical data of this study specific impeding influences to state asset management reform is explored, answering the question why innovative policy implementation is stagnant. An in-depth analysis of each influencing factors to state asset management reform, and the attached interviewee’s opinions for each factor, suggests the potential of an ‘excuse rhetoric’; whereby the influencing factors identified are a smoke-screen, or are myths that public policy makers and implementers believe in; as a means to explain innovative policy stagnancy. This study offers insights to Indonesian policy makers interested in ensuring the conceptualisation and full implementation of innovative policies, particularly, although not limited to, within the context of state asset management practices

Dynamics of banking technology adoption: an application to internet banking

This paper is concerned with examining behaviour of firms (banks) and consumers (banks’ customers) in the event of a new technology (internet banking) introduction. The determinants of consumer adoption of internet banking are characterised using survey data from Korea in both static and dynamic framework. I find evidence that adoption of internet banking is influenced by sex, age, marital status, degree of exposure to internet banking, and the characteristics of the banks. A duration analysis shows no evidence of first mover advantage (order effects) in internet banking whilst the largest bank (rank effects) in commercial banking remains dominant in internet banking. The results imply that the internet banking adoption is dominated by social norm effects

Modelling election dynamics and the impact of disinformation

Complex dynamical systems driven by the unravelling of information can be modelled effectively by treating the underlying flow of information as the model input. Complicated dynamical behaviour of the system is then derived as an output. Such an information-based approach is in sharp contrast to the conventional mathematical modelling of information-driven systems whereby one attempts to come up with essentially {\it ad hoc} models for the outputs. Here, dynamics of electoral competition is modelled by the specification of the flow of information relevant to election. The seemingly random evolution of the election poll statistics are then derived as model outputs, which in turn are used to study election prediction, impact of disinformation, and the optimal strategy for information management in an election campaign.Comment: 20 pages, 5 figure

The Case for Legal Regulation of Physicians’ Off-Label Prescribing

Deafness has been associated with poor abilities to deal with digits in the context of arithmetic and memory, and language modality-specific differences in the phonological similarity of digits have been shown to influence short-term memory (STM). Therefore, the overall aim of the present thesis was to find out whether language modality-specific differences in phonological processing between sign and speech can explain why deaf signers perform at lower levels than hearing peers when dealing with digits. To explore this aim, the role of phonological processing in digit-based arithmetic and memory tasks was investigated, using both behavioural and neuroimaging methods, in adult deaf signers and hearing non-signers, carefully matched on age, sex, education and non-verbal intelligence. To make task demands as equal as possible for both groups, and to control for material effects, arithmetic, phonological processing, STM and working memory (WM) were all assessed using the same presentation and response mode for both groups. The results suggested that in digit-based STM, phonological similarity of manual numerals causes deaf signers to perform more poorly than hearing non-signers. However, for  digit-based WM there was no difference between the groups, possibly due to differences in allocation of resources during WM. This indicates that similar WM for the two groups can be generalized from lexical items to digits. Further, we found that in the present work deaf signers performed better than expected and on a par with hearing peers on all arithmetic tasks, except for multiplication, possibly because the groups studied here were very carefully matched. However, the neural networks recruited for arithmetic and phonology differed between groups. During multiplication tasks, deaf signers showed an increased  reliance on cortex of the right parietal lobe complemented by the left inferior frontal gyrus. In contrast, hearing non-signers relied on cortex of the left frontal and parietal lobes during multiplication. This suggests that while hearing non-signers recruit phonology-dependent arithmetic fact retrieval processes for multiplication, deaf signers recruit non-verbal magnitude manipulation processes. For phonology, the hearing non-signers engaged left lateralized frontal and parietal areas within the classical perisylvian language network. In deaf signers, however, phonological processing was limited to cortex of the left occipital lobe, suggesting that sign-based phonological processing does not necessarily activate the classical language network. In conclusion, the findings of the present thesis suggest that language modality-specific differences between sign and speech in different ways can explain why deaf signers perform at lower levels than hearing non-signers on tasks that include dealing with digits.Dövhet har kopplats till bristande förmåga att hantera siffror inom områdena aritmetik och minne. Särskilt har språkmodalitetsspecifika skillnader i fonologisk likhet för siffror visat sig påverka korttidsminnet. Det övergripande syftet med den här avhandlingen var därför att undersöka om språkmodalitetsspecifika skillnader i fonologisk bearbetning mellan teckenoch talspråk kan förklara varför döva presterar sämre än hörande på sifferuppgifter. För att utforska det området undersöktes fonologisk bearbetning i sifferbaserade minnesuppgifter och aritmetik med hjälp av både beteendevetenskapliga metoder och hjärnavbildning hos grupper av teckenspråkiga döva och talspråkiga hörande som matchats noggrant på ålder, kön, utbildning och icke-verbal intelligens. För att testförhållandena skulle bli så likartade som möjligt för de båda grupperna, och för att förebygga materialeffekter, användes samma presentations- och svarssätt för båda grupperna. Resultaten visade att vid sifferbaserat korttidsminne påverkas de dövas prestation av de tecknade siffrornas fonologiska likhet. Däremot fanns det ingen skillnad mellan grupperna gällande sifferbaserat arbetsminne, vilket kan bero på att de båda grupperna fördelar sina kognitiva resurser på olika sätt. Dessutom fann vi att den grupp teckenspråkiga döva som deltog i studien presterade bättre på aritmetik än vad tidigare forskning visat och de skiljde sig bara från hörande på multiplikationsuppgifter, vilket kan bero på att grupperna var så noggrant matchade. Däremot fanns det skillnader mellan grupperna i vilka neurobiologiska nätverk som aktiverades vid aritmetik och fonologi. Vid multiplikationsuppgifter aktiverades cortex i höger parietallob och vänster frontallob för de teckenspråkiga döva, medan cortex i vänster frontal- och parietallob aktiverades för de talspråkiga hörande. Detta indikerar att de talspråkiga hörande förlitar sig på fonologiberoende minnesstrategier medan de teckenspråkiga döva förlitar sig på ickeverbal magnitudmanipulering och artikulatoriska processer. Under den fonologiska uppgiften aktiverade de talspråkiga hörande vänsterlateraliserade frontala och parietala områden inom det klassiska språknätverket. För de teckenspråkiga döva var fonologibearbetningen begränsad till cortex i vänster occipitallob, vilket tyder på att teckenspråksbaserad fonologi inte behöver aktivera det klassiska språknätverket. Sammanfattningsvis visar fynden i den här avhandlingen att språkmodalitetsspecifika skillnader mellan tecken- och talspråk på olika sätt kan förklara varför döva presterar sämre än hörande på vissa sifferbaserade uppgifter

IPOs cycle and investment in high-tech industries

This paper analyses the effects of the Initial Public Offering (IPO) market on real investment decisions in emerging industries. We first propose a model of IPO timing based on divergence of opinion among investors and short-sale constraints. Using a real option approach, we show that firms are more likely to go public when the ratio of overvaluation over profits is high, that is after stock market run-ups. Because initial returns increase with the demand from optimistic investors at the time of the offer, the model provides an explanation for the observed positive causality between average initial returns and IPO volume. Second, we discuss the possibility of real overinvestment in high-tech industries. We claim that investing in the industry gives agents an option to sell the project on the stock market at an overvalued price enabling then the financing of positive NPV projects which would not be undertaken otherwise. It is shown that the IPO market can however also lead to overinvestment in new industries. Finally, we present some econometric results supporting the idea that funds committed to the financing of high-tech industries may respond positively to optimistic stock market valuations

Probabilities in Probable Cause and Beyond: Statistical Versus Concrete Harms

Colb surfaces the statistical versus concrete harms disparity in judicial (and more broadly, human) reactions to probability-based behavior. In particular, it identifies the disparity in case law that either explicitly relies on the distinction as a normatively proper ground for legal decisions or that operates in a manner best explained by resort to this distinction. Though the paper is primarily descriptive, it suggests, tentatively, that lawmakers, judges, and juries should exercise greater care and deliberation in applying what may seem like a natural approach to distinguishing between permissible and impermissible harm. It is thus a plea for conscious consideration of the statistical-concrete distinction, which is sometimes applied in an unthinking fashion