Dampening Financial Regulatory Cycles

Financial regulation should be countercyclical, strengthening during speculative booms to contain excessive leverage and loosening following crises so as to not limit credit extension in hard times. And yet, financial regulation in fact tends to be procyclical, strengthening following crises and loosening during booms. This Article considers competing descriptive and normative analyses of that procyclical tendency. All of the models and arguments considered are rooted in a public choice perspective on financial regulation, i.e., rational choice ideas drawn from economics and applied to politics, but with that perspective modified to take account of behavioralist biases in rationality, particularly the availability bias. That bias helps explain the procyclical tendency in financial regulation, as both the public and regulators ignore the threat of financial crises during boom times and become very focused on that threat when crises actually occur. The normal dominance of concentrated interest groups temporarily shifts as public attention turns to financial regulation following a crisis. The models considered here differ greatly in their normative conclusions; some mainly criticize the deregulation that occurs during booms, some mainly criticize the regulation that occurs following crises, and some criticize the timing of both. The models differ in how they understand the balance of interest groups outside of crises and how likely that balance is to lead to outcomes that reflect the public interest; in how well they think the crisis-related public attention can be channeled to reflect the public interest; and in how they analyze the underlying vulnerability of financial institutions and markets and the intellectual difficulty of regulation. After analyzing these differing models, this Article considers historical evidence to determine the best approach, and then considers various administrative mechanisms that might help dampen the procyclical tendencies of financial regulation. This Article considers procedures such as bicameralism and the committee system in Congress, notice-and-comment rulemaking, hardlook judicial review, independent agencies, sunset clauses, mandated agency studies, regulatory “contrarians,” and automatic triggers for various rules

Mental health and language: anxiety and depression impact sentence recall differently

The present study examined how two mental health disorders (anxiety and depression) impact people's ability to process language. Participants (N = 64) were asked to read and recall sentences. A secondary naming task was used to prompt lexical rehearsal of the second noun in the stimulus sentence that was either part of the subject (e.g., Tania and the glass moved…) or final phrase (e.g., ... above the glass and the donkey). Corrections during writing and recall mistakes were modelled in generalized mixed models. In line with the hypothesis that mental health disorders impair language processing, both anxiety and depression affected sentence recall accuracy but only anxiety impacted the execution process. Understanding the impact of mental health disorders on language processing is crucial to develop targeted support for individuals who would otherwise be systematically disadvantaged in educational, social, and professional life. Future research may benefit from separating samples dependent on symptom severity and comorbidity

Surveillant and Counselor: A Reorientation in Compliance for Broker-Dealers

This Article argues that the compliance officer should play a major role in the ongoing reform of broker-dealers and other financial firms. This role is facilitated by the fact that compliance is now well established and accepted and compliance officers are close to decision making at all levels of a firm. The contention is that the role of compliance must be rethought and reoriented if it is to contribute fully to the reform. Compliance officers now ensure that the firms and their employees comply with the numerous laws and regulations governing them and their activities, primarily by producing and then revising detailed compliance procedures and policies, and monitoring compliance with them. The policies and procedures direct the conduct of employees by surrounding them with a web of detailed instructions, procedures, supervisory review, reporting, oversight, and investigation, where necessary. This approach, which is based on a well-established “external” model of direction, discipline, and surveillance, is necessary to prevent self-interested and opportunistic conduct by financial firm employees. However, there is a risk that employees follow only the letter of compliance and at times ignore it altogether because they understand that the rules are different from, and secondary to, the actual securities business. Moreover, the external approach “crowds out” another model that is necessary to achieve the most effective compliance: Ideal brokerdealer compliance would promote “internal,” in addition to external, compliance. The goal of the internal approach is to have firm employees internalize the policies of the laws and regulations and the professional and ethical standards so that they come into the foreground when the employees are making business decisions. In psychological terms, the internal model of compliance would ensure that the policies and standards do not “fade” in employee decision making. Thus a compliance officer, rather than being only a transcriber of rules and monitor of their enforcement, would be an educator about policies, standards, and the appropriate firm and industry culture, as well as an advisor and counselor concerning how they should inform daily employee decisions

Maternal Depression, Women's Empowerment, and Parental Investment: Evidence from a Randomized Control Trial

We evaluate the medium-term impacts of treating maternal depression on women's mental health, financial empowerment, and parenting decisions. We leverage variation induced by a cluster-randomized control trial that provided psychotherapy to 903 pre-natally depressed mothers in rural Pakistan. It was one of the world's largest psychotherapy interventions, and it dramatically reduced postpartum depression. Seven years after psychotherapy concluded, we returned to the study site to find that impacts on women's mental health had persisted, with a 17% reduction in depression rates. The intervention also improved women's financial empowerment and increased both time- and money-intensive parental investments by between 0.2 and 0.3 standard deviations

Quality management in the public building construction process

The poor quality of public buildings in the Botswana construction industry has been surrounded by controversy and strongly held opinions. The work reported here attempts to indicate some salient issues affecting the quality management system, with particular reference to the construction phase. Three propositions are addressed by the work. First that quality problems related to public building processes in Botswana are primarily due to an inappropriate project organizational structure. Secondly, that the traditional building procurement system provides a poor quality management system. The third proposition is that the traditional building procurement system does not facilitate derived quality levels as defined by the contract drawings and specifications. Five objectives of this study are identified and various issues which are fundamental to the research are reviewed. The first is the way in which the Botswana public building sector is organized, focussing on the building construction process. The second is the review of quality management theories both in the manufacturing and construction industries. The third is the relationship between the project management structure and project quality management, and the quality of building. The fourth is the proposal of a conceptual framework of an appropriate quality management system. Finally, recommendations about how to deal with organization of public building projects in order to select appropriate quality management systems are given. Information is obtained on the research areas through the use of the following methods: 1. Consultations with quality management practitioners and review of the Quality Management literature. 2. Questionnaires to architects, quantity surveyors, engineers, construction firm executives, contracts managers, site managers, trade foremen and skilled tradespersons, on quality management problems and procurement systems. 3. Case studies investigating approaches to site quality management in general and the adequacy of quality management documents. 4. Semi structured interviews investigating public building clients views on the quality management system and project procurement systems. The data collected are analysed using triangulation (qualitative and quantitative methodologies) methodology and the main results are reported below. The primary conclusion to be drawn is that the quality management system purported to be in use in the Botswana public building sector differs significantly from that recommended in the theory, resulting in poor quality buildings. This is primarily due to the use of an inappropriate building procurement system. In general the traditional building procurement system in the Botswana public building sector is used as a 'default system'. There are indications to suggest that it is used merely because the clients and consultants have failed to consider the issue of appropriateness. An appropriate quality management model for the construction phase is proposed with a proviso that the Botswana public building sector should establish appropriate methods of selecting appropriate procurement systems as a prerequisite in formulating appropriate quality management systems for various projects