Beyond the Financial Crisis:Addressing Risk Challenges in a Changing Financial Environment

The Financial Crisis has not only highlighted the importance of addressing issues such as liquidity risk – it has also brought to the fore the need to focus on unregulated instruments such as hedge funds, which are of systemic importance to the financial industry. Risk is an area which, owing to its increasing significance, requires greater focus. A move to risk based strategies is evidenced by the growing popularity of risk based regulation and meta regulatory strategies. Given the presence of an unregulated hedge fund industry however, such attempts do not suffice on their own. Further, the systemic nature of risk exacerbates the problem of such unregulated institutions. 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. These theories will be considered against a background of themes such as dynamism, evolutionism, developments in science and industry, cultural attitudes to risk, and the need to be responsive and reflexive to changes which have arisen in modern society. Theoretical models and hybrids of a responsive model of regulation such as Enforced self regulation and meta regulation, which have the potential to address the problems relating to risk will be addressed. By virtue of the pro cyclical nature of risk, the inability of Basel 2 to address risk cycles were revealed during the Northern Rock Crisis. Other flaws and deficiencies inherent in Basel 2, a form of meta regulation, will be highlighted. The relevance of internal control systems to an efficient system of regulation, the reasons for which meta regulation is not only considered to be the most responsive form of regulation, but also one which assigns central role to internal control systems will be discussed. The contested nature of risk and the difficulties attributed to its quantification, raise questions about its ability to function effectively as a regulatory tool. If risks could be eliminated in their entirety however, then regulation would serve no purpose. This paper aims generally therefore to direct attention to those areas which could be addressed, namely institutional risks, and measures whereby such risks, even though impossible to eliminate, could be minimize

Size matters: entrepreneurial entry and government

We explore the country-specific institutional characteristics likely to influence an individual's decision to become an entrepreneur. We focus on the size of the government, on freedom from corruption, and on 'market freedom' defined as a cluster of variables related to protection of property rights and regulation. We test these relationships by combining country-level institutional indicators for 47 countries with working age population survey data taken from the Global Entrepreneurship Monitor. Our results indicate that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption. A cluster of institutional indicators representing 'market freedom' is only significant in some specifications. Freedom from corruption is significantly related to entrepreneurial entry, especially when the richest countries are removed from the sample but unlike the size of government, the results on corruption are not confirmed by country-level fixed effects models

Competitive Effects of Partial Ownership: Financial Interest and Corporate Control

In this article, we set up an economic framework for analyzing the competitive effects of partial ownership interests. We have three main goals. First, we conceptually derive and explain the competitive effects of partial ownership, explaining its key elements and drawing analogies to the key ideas behind the analysis of horizontal mergers. Second, we present a general framework for evaluating the competitive effects of partial ownership that is analogous to, but at the same time recognizes key differences in the standard analysis for evaluating horizontal mergers. Third, we examine several methods of quantifying these competitive effects

A review of Australian approaches for monitoring, assessing and reporting estuarine condition: III. Evaluation against international best practice and recommendations for the future

In this final component of a three-part review, we present a national synthesis and evaluation of approaches for monitoring, assessing and reporting estuarine condition across Australia. Progress is evaluated against objective criteria that together provide a model of international best practice. We critically assess the limitations, inconsistencies and gaps that are evident across Australian jurisdictions, and identify common obstacles to future progress. Major strengths and successes are also highlighted, together with specific examples of best practice from around Australia that are transferable to other States and beyond. Significant obstacles to greater national coordination of monitoring and reporting practices include inconsistent spatial scales of management, pluralistic governance structures and the lack of any overarching legislation. Nonetheless, many perceptible advances have been made over the last decade across Australia in estuarine monitoring and health assessment, and there is great potential for further progress. Finally, we provide a list of recommendations to address some of the most pressing limitations and gaps, and support improved future monitoring, assessment and reporting for Australian estuaries

Coordinating Local Adaptive Strategies through a Network-Based Approach

As the impacts of climate change become increasingly destructive and pervasive, climate adaptation has received greater political and academic attention. The traditional top-down model for mitigating climate change, however, is ill-suited to implementing effective adaptation strategies. Yet, local communities most impacted by climate change seldom have the tools and resources to develop effective adaptive strategies on their own. This note argues that a bottom-up, network-based approach could be a promising paradigm towards implementing effective adaptive strategies and empowering affected communities