Densely Entangled Financial Systems

In [1] Zawadoski introduces a banking network model in which the asset and counter-party risks are treated separately and the banks hedge their assets risks by appropriate OTC contracts. In his model, each bank has only two counter-party neighbors, a bank fails due to the counter-party risk only if at least one of its two neighbors default, and such a counter-party risk is a low probability event. Informally, the author shows that the banks will hedge their asset risks by appropriate OTC contracts, and, though it may be socially optimal to insure against counter-party risk, in equilibrium banks will {\em not} choose to insure this low probability event. In this paper, we consider the above model for more general network topologies, namely when each node has exactly 2r counter-party neighbors for some integer r>0. We extend the analysis of [1] to show that as the number of counter-party neighbors increase the probability of counter-party risk also increases, and in particular the socially optimal solution becomes privately sustainable when each bank hedges its risk to at least n/2 banks, where n is the number of banks in the network, i.e., when 2r is at least n/2, banks not only hedge their asset risk but also hedge its counter-party risk.Comment: to appear in Network Models in Economics and Finance, V. Kalyagin, P. M. Pardalos and T. M. Rassias (editors), Springer Optimization and Its Applications series, Springer, 201

Gene Expression Analyses of Neurons, Astrocytes, and Oligodendrocytes Isolated by Laser Capture Microdissection From Human Brain: Detrimental Effects of Laboratory Humidity

Laser capture microdissection (LCM) is a versatile computer-assisted dissection method that permits collection of tissue samples with a remarkable level of anatomical resolution. LCM\u27s application to the study of human brain pathology is growing, although it is still relatively underutilized, compared with other areas of research. The present study examined factors that affect the utility of LCM, as performed with an Arcturus Veritas, in the study of gene expression in the human brain using frozen tissue sections. LCM performance was ascertained by determining cell capture efficiency and the quality of RNA extracted from human brain tissue under varying conditions. Among these, the relative humidity of the laboratory where tissue sections are stained, handled, and submitted to LCM had a profound effect on the performance of the instrument and on the quality of RNA extracted from tissue sections. Low relative humidity in the laboratory, i.e., 6-23%, was conducive to little or no degradation of RNA extracted from tissue following staining and fixation and to high capture efficiency by the LCM instrument. LCM settings were optimized as described herein to permit the selective capture of astrocytes, oligodendrocytes, and noradrenergic neurons from tissue sections containing the human locus coeruleus, as determined by the gene expression of cell-specific markers. With due regard for specific limitations, LCM can be used to evaluate the molecular pathology of individual cell types in post-mortem human brain

On the Computational Complexity of Measuring Global Stability of Banking Networks

Threats on the stability of a financial system may severely affect the functioning of the entire economy, and thus considerable emphasis is placed on the analyzing the cause and effect of such threats. The financial crisis in the current and past decade has shown that one important cause of instability in global markets is the so-called financial contagion, namely the spreading of instabilities or failures of individual components of the network to other, perhaps healthier, components. This leads to a natural question of whether the regulatory authorities could have predicted and perhaps mitigated the current economic crisis by effective computations of some stability measure of the banking networks. Motivated by such observations, we consider the problem of defining and evaluating stabilities of both homogeneous and heterogeneous banking networks against propagation of synchronous idiosyncratic shocks given to a subset of banks. We formalize the homogeneous banking network model of Nier et al. and its corresponding heterogeneous version, formalize the synchronous shock propagation procedures, define two appropriate stability measures and investigate the computational complexities of evaluating these measures for various network topologies and parameters of interest. Our results and proofs also shed some light on the properties of topologies and parameters of the network that may lead to higher or lower stabilities.Comment: to appear in Algorithmic

Systemic risk and macroeconomic fat tails

We propose a mechanism for shock amplification that potentially can account for fat tails in the distribution of the growth rate of national output. We argue that extreme macroeconomic events, such as the Great Depression and the Great Recession, were preceded by significant turmoil in the banking system. We have developed a model of bank network formation and presented numerical simulations that show that, for the benchmark case, aggregate credit follows a random walk. When we introduce fire sales the model does not only produce larger variations in the growth of aggregate credit but also shows that there is an asymmetry between booms and busts that is also consistent with empirical evidence

The global burden of cancer: priorities for prevention

Despite decreases in the cancer death rates in high-resource countries, such as the USA, the number of cancer cases and deaths is projected to more than double worldwide over the next 20–40 years. Cancer is now the third leading cause of death, with >12 million new cases and 7.6 million cancer deaths estimated to have occurred globally in 2007 (1). By 2030, it is projected that there will be ∼26 million new cancer cases and 17 million cancer deaths per year. The projected increase will be driven largely by growth and aging of populations and will be largest in low- and medium-resource countries. Under current trends, increased longevity in developing countries will nearly triple the number of people who survive to age 65 by 2050. This demographic shift is compounded by the entrenchment of modifiable risk factors such as smoking and obesity in many low-and medium-resource countries and by the slower decline in cancers related to chronic infections (especially stomach, liver and uterine cervix) in economically developing than in industrialized countries. This paper identifies several preventive measures that offer the most feasible approach to mitigate the anticipated global increase in cancer in countries that can least afford it. Foremost among these are the need to strengthen efforts in international tobacco control and to increase the availability of vaccines against hepatitis B and human papilloma virus in countries where they are most needed

Systemic importance of financial institutions: regulations, research, open issues, proposals

In the field of risk management, scholars began to bring together the quantitative methodologies with the banking management issues about 30 years ago, with a special focus on market, credit and operational risks. After the systemic effects of banks defaults during the recent financial crisis, and despite a huge amount of literature in the last years concerning the systemic risk, no standard methodologies have been set up to now. Even the new Basel 3 regulation has adopted a heuristic indicator-based approach, quite far from an effective quantitative tool. In this paper, we refer to the different pieces of the puzzle: definition of systemic risk, a set of coherent and useful measures, the computability of these measures, the data set structure. In this challenging field, we aim to build a comprehensive picture of the state of the art, to illustrate the open issues, and to outline some paths for a more successful future research. This work appropriately integrates other useful surveys and it is directed to both academic researchers and practitioners