The Anatomy of Large Valuation Episodes

We examine episodes in which there is a large shift in a country’s net foreign asset position due to the re-valuation of its foreign assets and/or liabilities. We highlight the differences in large valuation episodes between countries characterized by large gross stocks of foreign assets and liabilities and countries exhibiting large net positions. Finally, we analyze macroeconomic dynamics in the neighborhood of large valuation episodes.

The Anatomy of Large Valuation Episodes

We examine episodes in which there is a large shift in a country’s net foreign asset position due to the re-valuation of its foreign assets and/or liabilities. We highlight the differences in large valuation episodes between countries characterized by large gross stocks of foreign assets and liabilities and countries exhibiting large net positions. Finally, we analyze macroeconomic dynamics in the neighborhood of large valuation episodes.

Are Trump and Bitcoin Good Partners?

During times of extreme market turmoil, it is acknowledged that there is a tendency towards "flight to safety". A strong (weak) safe haven is defined as an asset that has a significant positive (negative) return in periods where another asset is in distress, while hedge has to be negatively correlated (uncorrelated) on average. The Bitcoin's surge alongside the aftermath of Trump's win in the 2016 U.S. presidential elections has strengthened its status as the modern safe haven. This paper uses a truly noise-assisted data analysis method, termed as Ensemble Empirical Mode Decomposition-based approach, to examine whether Bitcoin can act as a hedge and safe haven for U.S. stock price index. The results document that the Bitcoin's safe-haven property is time-varying and that it has primarily been a weak safe haven in the short term and the long-term. We also demonstrate that precious metals lost their safe haven properties over time as the correlation between gold/silver and U.S. stock price declines from short-to long-run horizons

Problem-based leadership: nurturing managers during turbulent times

Purpose – The paper explores problem-based learning (PBL) as a useful methodology in leadership development during turbulent times. It identifies several pertinent action points for managers to lead through problems while understanding their capacity to empower themselves and others to face challenges at work. Design/methodology/approach – Broad concepts of PBL are used to distil the characteristics of this methodology and how they might be applicable to leadership development. An actual case of PBL in leadership education and training is employed to illustrate the processes of problem solving and reflective action-taking. Findings – When confronted by problems, managers should adopt a learning-oriented mindset and draw on the strengths of others to generate immediate solutions for experimentation. In doing so, they need to accept failure as a prerequisite for creative tensions to be generated and applied in messy circumstances. Until they think out of the box, they will continue to solve problems in tried-and-tested ways obstructing the emergence of revolutionary solutions. Practical implications – In order for managers to make an impact on organizational process and improvement, they need to focus on the action and learn components of PBL. They should be given the space to listen to their own “voice” and internalize the “voice” of others through reflection and dialogue. They should also be recognized for their courage and boldness in confronting problems even if more problems are generated in the process. It is facing the goliath that managers truly grow to become real leaders. Originality/value – Although the concept of PBL has been around for a long while, its applicability to leadership development has not been sufficiently explored in both theory and practice. This paper brings another dimension to the common idea of problem solving where solution seeking is not an end it itself. At best, it is a means to discovering the potential of true leadership in those whose mindset is focused on learning and reflective decision-making

Is the luxury industry really a financier’s dream ?

Although modest in terms of sales, compared to most other sectors, luxury does get a high share of investors', financial analysts’ and media attention. Why would this sector receive a share of attention much bigger than its actual weight? Is it because of its glamourous image, or the incredible prices attached to its products, now displayed in all the media for mass desire? Are the financiers dreaming too?luxury brands; sales; investment; performance; profitability; finance;

Proliferation of risk and policy responses in the EU financial markets

Summary for non-specialistsThis study draws attention to the proliferation of tail risks in financial markets prior to and during the course of the recent global financial crisis. It examines the level of tail risks in selected equity, interbank lending and foreign exchange markets in selected EU Member States in relation to the United States. The extent of tail risks is assessed by applying general error distribution (GED) parameterization in GARCH volatility tests of the examined variables. The empirical tests prove that tail risks were pronounced across all of the examined European financial markets throughout the crisis. They were also significant prior to the crisis outbreak. The analyzed interbank lending markets exhibited more extreme volatility outbursts than the equity and foreign exchange markets. Several countercyclical monetary and macroprudential policies aimed at abating tail risks are identified and discussed. Flexible capital adequacy and contingent capital requirements for financial institutions are advocated.Global financial crisis equity markets foreign exchange markets monetary policies macroprudential policies Orlowski

Eligible central bank collateral in times of serious financial distress

On 15 October the ECB massively expanded the set of securities that it accepts as collateral. All securities should be accepted as collateral, given severe enough valuations and haircuts. The ECB should be more transparent in explaining how it values illiquid securities as collateral. The ECB could use a reverse auction to value securities but it should avoid outcomes with fire sale prices. Crisis conditions mean that the Eurosystem could need recapitalisation; an automatic arrangement to provide this should be in place

The Benefits and Costs of Internal Markets: Evidence from Asia's Financial Crisis

This study examines the role of internal capital markets and diversification during normal and turbulent times. We hypothesize that internal markets are more valuable for firms in countries with less-developed financial markets and that diversification generally reduces risk. To conduct our tests, we study 3,000 East Asian corporations over the period before and during the 1997-1998 financial crisis. We find support for the internal market hypothesis during normal times. We find, however, that more diversified firms perform worse during a crisis, especially in less-developed countries. This suggests that more diversification and greater usage of internal markets is associated with higher risk-taking, especially when external markets are less developed.

DEFINING MANAGEMENT FOR THE TWENTY-FIRST CENTURY

Globalization has brought a new economy, an economy based on a Digital Revolution. Due to the enormous progress of the information technology, the business environment of the twenty-first century is changing rapidly. That is why this turbulent environment requires a new management of organizations. The management in the third millennium is, above all, a knowledge management.Management; Business environment; Globalization; Organization; Knowledge management.

Recasting Economics as if the Climate and Global Ecology Really Mattered

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