633 research outputs found

    Essays on Risk Creation in the Banking Sector

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    This thesis consists of four essays exploring risk creation in the banking sector. The essays examine how conflicting interests can compromise the objectivity, judgment, and decision making of economic agents. Consequently, they may prioritize their personal or institutional interests over the best interests of others or the entire financial system. Chapter 2 delves into the conflict of interest that arises when a bank serves as an investor in the stock market. Chapter 3 revisits the discussion of the potential misalignment between sovereign incentives and the collective interests of the currency union, particularly in the bond market. Chapter 4 draws attention to a situation where regulations in the banking sector may be advantageous for a government in the sovereign bond market. Finally, Chapter 5 looks at the flip side of the coin, examining how banks may be susceptible to moral hazard concerns in their FX lending decisions, given that they do not fully bear the consequences of their actions

    Multidisciplinary perspectives on Artificial Intelligence and the law

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    This open access book presents an interdisciplinary, multi-authored, edited collection of chapters on Artificial Intelligence (‘AI’) and the Law. AI technology has come to play a central role in the modern data economy. Through a combination of increased computing power, the growing availability of data and the advancement of algorithms, AI has now become an umbrella term for some of the most transformational technological breakthroughs of this age. The importance of AI stems from both the opportunities that it offers and the challenges that it entails. While AI applications hold the promise of economic growth and efficiency gains, they also create significant risks and uncertainty. The potential and perils of AI have thus come to dominate modern discussions of technology and ethics – and although AI was initially allowed to largely develop without guidelines or rules, few would deny that the law is set to play a fundamental role in shaping the future of AI. As the debate over AI is far from over, the need for rigorous analysis has never been greater. This book thus brings together contributors from different fields and backgrounds to explore how the law might provide answers to some of the most pressing questions raised by AI. An outcome of the Católica Research Centre for the Future of Law and its interdisciplinary working group on Law and Artificial Intelligence, it includes contributions by leading scholars in the fields of technology, ethics and the law.info:eu-repo/semantics/publishedVersio

    Current issues of the management of socio-economic systems in terms of globalization challenges

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    The authors of the scientific monograph have come to the conclusion that the management of socio-economic systems in the terms of global challenges requires the use of mechanisms to ensure security, optimise the use of resource potential, increase competitiveness, and provide state support to economic entities. Basic research focuses on assessment of economic entities in the terms of global challenges, analysis of the financial system, migration flows, logistics and product exports, territorial development. The research results have been implemented in the different decision-making models in the context of global challenges, strategic planning, financial and food security, education management, information technology and innovation. The results of the study can be used in the developing of directions, programmes and strategies for sustainable development of economic entities and regions, increasing the competitiveness of products and services, decision-making at the level of ministries and agencies that regulate the processes of managing socio-economic systems. The results can also be used by students and young scientists in the educational process and conducting scientific research on the management of socio-economic systems in the terms of global challenges

    Science and Innovations for Food Systems Transformation

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    This Open Access book compiles the findings of the Scientific Group of the United Nations Food Systems Summit 2021 and its research partners. The Scientific Group was an independent group of 28 food systems scientists from all over the world with a mandate from the Deputy Secretary-General of the United Nations. The chapters provide science- and research-based, state-of-the-art, solution-oriented knowledge and evidence to inform the transformation of contemporary food systems in order to achieve more sustainable, equitable and resilient systems

    Three essays on credit supply

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    This thesis consists of three independent essays on credit supply, each addressing different components, including the different impact of credit supply shocks financed through different supply channels, how different credit constraints impact debt structure and productivity, and how it affects their individual and collective exposure over time. Chapter 1: Its conceptual appeal has made the Conditional Value at Risk (CoVaR) one of the most influential systemic risk indicators. Despite its popularity, an outstanding methodological challenge may hamper the CoVaRs’ accuracy in measuring the time-series dimension of systemic risk. The dynamics of the CoVaR are entirely due to the behaviour of the state variables and therefore without their inclusion, the CoVaR would be constant over time. The key contribution of this chapter is to relax the assumption of time-invariant tail dependence between the financial system and each institution’s losses, by allowing the estimated parameters of the model to change over time, in addition to changing over quantiles and different financial institutions. We find that the dynamic component that we introduce does not affect the estimations for the risk of individual financial institutions, but it largely affects estimations of systemic risk which exhibits more procyclicality than the one implied by the standard CoVaR. As expected, larger financial institutions have a higher effect on systemic risk, although they are also shown to be individually more robust. When adding balance sheet data, it introduces additional volatility into our model relative to the standard one. In terms of forecasting, the results depend on the horizon used or the variables included. There is no clear outperformance between either model when we add the balance sheet data, or in the short term (less than 12 weeks). However, our model outperforms the standard one for medium (between 15 and 25 weeks) to long term horizons (between 30 and 40 weeks). Chapter 2: We seek to evaluate the impact of the different segments within the lending sector to the private non-financial sector can have on subsequent GDP growth. We isolate the bank lending channel as one of the main components, and group the remaining ones into a second segment which we classify as market based finance (MBF). We also include the 2 different segments of the borrowing sector, household debt and non-financial firm debt, to compare with the results obtained by the standard model. We debate the main source of these effects, and focus on either credit demand or credit supply shocks, in addition to other alternatives. We find that a rise in bank credit and/or household debt to GDP ratio lowers subsequent GDP growth. The predictive power is large in magnitude and robust across time and space. The bank credit booms and household debt booms are connected to lower interest rate spread environments, as well as periods with better financial conditions. And although the overall impact on subsequent GDP growth is negative, we found contrasting evidence when using the Financial Conditions Index (FCI) as an instrument. This would point to the potential different effects that bank credit and household debt could have on future economic growth (good booms vs bad booms), depending on the underlying cause of the boom. The results and the evidence that we found are more consistent with models where the fundamental source of the changes in household debt or bank credit lie in changes in the credit supply (credit supply shocks), rather than credit demand or other possibilities. This would likely be connected to incorrect expectations formation by lenders and investors (what many authors classify as “credit market sentiment” in the literature), which is an important element in explaining shifts in credit supply. Although credit demand shocks could play an important role in prolonging or amplifying the effects of the booms, it is unlikely that they are the source, as it would lead to results that conflict with empirical evidence. Finally, we find some differences in terms of statistical significance and magnitude in the different scenarios, where the bank credit shows more robustness to different specifications than the household debt. This would imply that there is a significance of the bank credit that goes well beyond the household debt. It would also mean that the main component that generates the boom bust cycle in GDP would be the bank credit, independent of its destination, rather than household debt, independent of its financing. Chapter 3: We construct a dataset at the firm-year level by merging the syndicated loan data, provided by Refinitiv LPC DealScan ("DealScan"), with the firm level data, provided by Center for Research in Security Prices (CRSP)/Compustat Merged Database ("CCM"). We conduct an analysis on firms subjected to different covenants, and find that firms with earnings-based constraints have lower levels of TFP (Total Factor Productivity), and short-term debt, when compared to firms with asset-based constraints. The data also shows that this is connected to an additional negative impact that short-term debt has on the productivity for the firms with earnings based constraints, which does not verify in the firms with asset-based constraints. Both these characteristics are robust to the use of 3 different TFP estimation methods, different subsamples, and additional controls, including age and size of the firm. Thus, we consider a quantitative dynamic stochastic partial equilibrium model, with three main types of firms, distinguished by their constraints, which explores the impact of short-term and long term borrowing on firm’s balance sheets, on the different variables. We construct replications for this theoretical model, and assess the how well it fits our actual data. Our findings show that constraints exert an impact on short-term borrowing, but not on the remaining variables. More specifically, firms that face an earnings-based constraint show lower levels of short-term borrowing, compared with firms that are either unconstrained, or asset-based constraint. The adjustment is made through lower dividend distribution, as can be seen by the lower values of the value function. They also point to the impact being larger for firms with lower productivity shocks, which is in accordance withour empirical findings. Even though that our data shows differences in some of this variables (for example, on long-term debt), these were not robust to some of the controls, including the size of the firm
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