EAD calibration for corporate credit lines

Managing the credit risk inherent to a corporate credit line is similar to that of a term loan, but with one key difference. For both instruments, the bank should know the borrower's probability of default (PD) and the facility's loss given default (LGD). However, since a credit line allows the borrowers to draw down the committed funds according to their own needs, the bank must also have a measure of the line's exposure at default (EAD). Our study, which is based on a census of all corporate lending within Spain over the last 20 years, provides the most comprehensive overview of corporate credit line use and EAD calculations to date. Our analysis shows that defaulting firms have significantly higher credit line usage rates and EAD values up to five years prior to their actual default. Furthermore, we find that there are important variations in EAD values due to credit line size, collateralization, and maturity. While our results are derived from data for a single country, they should provide useful benchmarks for further academic, business and policy research into this underdeveloped area of credit risk management.Commercial loans ; Bank loans ; Credit

How does competition impact bank risk-taking?

A common assumption in the academic literature and in the actual supervision of banking systems worldwide is that franchise value plays a key role in limiting bank risk-taking. As the underlying source of franchise value is assumed to be market power, reduced competition has been considered to promote banking stability. Boyd and De Nicolo (2005) propose an alternative view where concentration in the loan market could lead to increased borrower debt loads and a corresponding increase in loan defaults that undermine bank stability. Martinez-Miera and Repullo (2007) encompass both approaches by proposing a nonlinear relationship between competition and bank risk-taking. Using unique datasets for the Spanish banking system, we examine the empirical nature of that relationship. After controlling for macroeconomic conditions and bank characteristics, we find that standard measures of market concentration do not affect the ratio of non-performing commercial loans (NPL), our measure of bank risk. However, using Lerner indexes based on bank-specific interest rates, we find a negative relationship between loan market power and bank risk. This result provides evidence in favor of the franchise value paradigm.Bank competition

Determinants of access to external finance: evidence from Spanish firms

Access to external finance is a key determinant of a firm's ability to develop, operate and expand. To date, the literature has examined a variety of macroeconomic and microeconomic factors that influence firm financing. In this paper, we examine access by Spanish firms to external financing, both from bank and non-bank sources. We use dynamic panel data estimation techniques to estimate our models over a sample of 60,000 firms during the period from 1992 to 2002. We find that Spanish firms are quite dependent on short-term non-bank financing (such as trade credit), which makes up about 65 percent of total firm debt. Our results indicate that this type of financing is less sensitive to firm characteristics than short-term bank financing. However, we also find that short-term bank debt seems to be accessed more during economic expansions, which may suggest a substitution away from non-bank financing as firm conditions improve. Short-term bank debt also seems to be accessed more as funding rates rise, possibly again suggesting a substitution away from higher-priced non-bank alternatives. Using data from the Spanish Credit Register maintained by the Banco de Espana, we find that the impact of funding costs on access to external financing, whether from banks or non-banks, is affected by the nature of borrowing firms' bank relationships and collateral. In particular, we provide evidence of a potential hold-up problem in loan markets. Moreover, collateral plays a key role in making long-term finance available to firms.Bank competition

Analisis Kebermanfaatan Aplikasi Panduan Diet untuk Anak Penderita Demam Berdarah

Latar Belakang: Demam berdarah Dengue atau DBD merupakan penyakit yang sangat rentan menyerang sebagian besar masyarakat Indonesia, terbukti menurut Pemerintah Provinsi Jawa Timur pada tanggal 25 Januari 2015 angka penderita DBD di 38 Kabupaten/Kota di Jatim sudah mencapai 1.054 penderita, dengan 25 penderita di antaranya meninggal dunia.Metode: Penelitian ini merupakan penelitian kualitatif deskriptif yang bertujuan untuk mengetahui tingkat keberhasilan dari aplikasi yang telah dibuat. Data diperoleh dengan cara survey langsung pada orang tua yang memiliki anak sedang menderita demam berdarah. Instrumen penelitian yang digunakan adalah lembar check list menggunakan skala Likert. Penelitian dilakukan di tiga kelurahan yang berbeda yaitu kelurahan Wonokromo pada Puskesmas Wonokromo, Kelurahan Jagir pada Puskesmas Jagir dan Kelurahan Sukolilo pada Puskesmas Sukolilo, yang ketiga puskesmas tersebut berada di Kota Surabaya. Sampel penelitian meliputi tujuh kategori untuk mengetahui tingkat keberhasilan dari system yang telah dibuat yang meliputi kebermanfaatan aplikasi, kemudahan penggunaan, kemudahan pembelajaran, kemudahan tampilan, kemudahan bahasa, kemampuan aplikasi, dan penerimaan responden terhadap aplikasi yang dibuat.Hasil: aplikasi ini telah diujicobakan kepada tiga kelompok yang berbeda yaitu: dua ahli gizi, lima orang perawat, dan 20 orang tua yang memiliki anak penderita DBD, dan menghasilkan persentase sebesar 81% dari Ahli Gizi dan 89% dari tim medis kesehatan serta 81% dari orang tua, dimana ketiga kelompok tersebut menyatakan bahwa aplikasi ini dikategorikan sebagai alat bantu yang sangat baik

Empirical analysis of corporate credit lines

Since bank credit lines are a major source of corporate funding, we examine the determinants of credit line usage with a comprehensive database of Spanish corporate credit lines. A line’s default status is a key factor driving its usage, which increases as a firm’s financial condition worsens. Line usage decreases by roughly 10% for each year of its life. Lender characteristics, such as the number and length of a firm’s banking relationships, are found to affect a firm’s usage decisions, and credit line usage is found to be inversely related to macroeconomic condition

How does competition impact bank risk-taking?

A common assumption in the academic literature is that franchise value plays a key role in limiting bank risk-taking. As market power is the primary source of franchise value, reduced competition in banking markets has been seen as promoting banking stability. We test this hypothesis using data for the Spanish banking system. We find that standard measures of market concentration do not affect bank risk-taking. However, we find a negative relationship between market power measured using Lerner indexes based on bank-specific interest rates and bank risk. Our results support the franchise value paradig

Transmission Dynamics of Highly Pathogenic Avian Influenza at Lake Constance (Europe) During the Outbreak of Winter 2005–2006

Highly pathogenic avian influenza virus (HPAI) H5N1 poses a serious threat to domestic animals. Despite the large number of studies on influenza A virus in waterbirds, little is still known about the transmission dynamics, including prevalence, behavior, and spread of these viruses in the wild waterbird population. From January to April 2006, the HPAI H5N1 virus was confirmed in 82 dead wild waterbirds at the shores of Lake Constance. In this study, we present simple mathematical models to examine this outbreak and to investigate the transmission dynamics of HPAI in wild waterbirds. The population dynamics model of wintering birds was best represented by a sinusoidal function. This model was considered the most adequate to represent the susceptible compartment of the SIR model. The three transmission models predict a basic reproduction ratio (R0) with value of approximately 1.6, indicating a small epidemic, which ended with the migration of susceptible wild waterbirds at the end of the winter. With this study, we quantify for the first time the transmission of HPAI H5N1 virus at Lake Constance during the outbreak of winter 2005–2006. It is a step toward the improvement of the knowledge of transmission of the virus among wild waterbirds

Chronic glomerulonephritis of the mixed type in patient with HBV-infection (<i>Clinical case</i>)

The aim of the publication. To present a clinical case of the chronic glomerulonephritis (CGN) associated with hepatitis B virus (НВV) infection. To demonstrate efficacy of nucleoside analogues with high antiviral activity in the treatment of such patients and importance of well-timed prescription of antiviral therapy.Key points. Presented case shows renal onset of chronic viral hepatitis B, that was previously asymptomatic for long time in patient, who was infected at early childhood. Clinical manifestation of disease was characterized by nephrotic syndrome, hematuria, systemic hypertension. Severe dependent edema, abdominal and pleural effusions, splenomegaly and hypertension up to 160/90 mm Hg drew attention. Laboratory tests revealed markers of НВе-negative НВV-infection, high serum level of НВV DNA replication, severe proteinuria at preserved renal function. At ultrasound liver elastometry showed severe fibrosis (METAVIR F3). On a background of glucocorticosteroid treatment elevation of cytolytic enzymes (alanine transaminase of 120 U/L, aspartate aminotransferase of 98 U/L) was registered for the first time. Treatment included entecavir 0,5 mg per day for 12 wks with normalization of transaminase levels, virologic response (DNA НВV under 50 МЕ/ML) at the 30th week, НВе seroconversion at the 42nd week of treatment.Conclusions. Extrahepatic manifestations of viral hepatites frequently not only mask liver disease, but determine prognosis in many respects as well. Pathogenic treatment of НВV-infection associated CGN without antiviral treatment is accompanied by risk of liver disease activation. Patients with renal involvement within the framework of chronic НВV-infection require antiviral therapy by nucleoside analogues, their high antiviral activity is demonstrated by presented clinical case

Practical application of the ATOM study: Treatment efficacy of antihypertensive drugs in monotherapy or combination (ATOM metaanalysis according to PRISMA statement); tables for the use of antihypertensive drugs in monotherapy or combination

Background: The response to antihypertensive drugs is predictable. The absence of precise prescription recommendations to treat arterial hypertension (HT) lead to use drugs unable to reduce blood pressure (BP) to target values. We published ATOM study, in which we found significant differences in the ability to reduce BP between the different drugs. The objective of the study was to determine the expected decrease in blood pressure with the use of commercialized doses of the drugs commonly used in the treatment of HT in clinical practice, to avoid the use of drugs or combinations that even with the best response, are unable to obtain the necessary BP decrease to reach the goal. Methods: The analysis was based on the results of the ATOM study. To convert the mean doses of the different drugs and combinations in commercialized doses, the conclusions of the study by Law et al have been applied. Results: Based on the results, two tables were drawn, one for systolic BP and the other for diastolic BP, where the doses of the different drugs and combinations are classified according to the BP decrease that can be expected from them. In order to favor the use of the tables in clinical practice, the different drugs have been grouped in intervals of 10 millimeters of mercury (mmHg) for the decrease of the systolic BP and of 5 mmHg for the diastolic BP. Conclusions: Recommendations for the use of antihypertensive treatments should not be limited to pharmacological families. They should also consider differences between drugs or specific combinations. From the data of the ATOM study we have implemented tables that express the effect of the drugs commonly used in clinical practice and that should allow the clinicians to choose with care the treatment to use