IMF-Related Announcements, Fundamentals, and Creditor Moral Hazard: A Case Study of Indonesia

Previous tests of creditor moral hazard cannot distinguish between two types of investor behavior: expectations of implicit guarantees or better future economic fundamentals due to a prospective IMF program. The novelty of our approach lies in the inclusion of the forward foreign exchange rate in the empirical tests of creditor moral hazard, which reflects investors’ expectations about the country’s future fundamentals and allows us to separate the effects of fundamentals from those of moral hazard. Using Indonesian financial markets as a case study, we first conduct tests of creditor moral hazard in the Indonesian bond and stock markets. Then, we use the forward exchange rate to confirm the interpretation of the bond and stock market results. Our results show that IMF-program related news, especially, the announcement of program negotiations, brings about higher stock returns and lower bond spreads, even though the bath sells at a forward discount on the same day. These results suggest creditor moral hazard in the Indonesian bond and equity markets.http://deepblue.lib.umich.edu/bitstream/2027.42/40066/3/wp680.pd

Creditor Moral Hazard in Equity Markets: A Theoretical Framework and Evidence from Indonesia and Korea

This paper expands on the work of Sarno and Taylor (1999) and develops three alternative models in which creditor moral hazard might occur in equity markets under different assumptions regarding the existence of asset market bubbles and implicit guarantees. Incorporating IMF-related news associated with the own country and with other countries to our models, we are able to predict the expected change in investor behavior and its effect on stock returns. Using daily stock returns for Indonesia and Korea, we test the ability of the models to predict the expected changes in stock returns on the days of IMF-related news such as program negotiations and program approval. Our results regarding Korea and, to a lesser extent, Indonesia are consistent with the creditor moral hazard models that assume implicit guarantees and asset price bubbles. Our results show that, if there is creditor moral hazard in equity markets, its duration could be measured only by days, suggesting that creditor moral hazard is a short-term phenomenon.http://deepblue.lib.umich.edu/bitstream/2027.42/40045/3/wp659.pd

Testing creditor moral hazard in sovereign bond markets: A unified theoretical approach and empirical evidence

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon. --

Testing Creditor Moral Hazard in Sovereign Bond Markets: A Unified Theoretical Approach and Empirical Evidence

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon.Creditor moral hazard, financial markets, the IMF, and news

Effect of Supersymmetric phases on the Direct CP Asymmetry of B -> X_d \gamma

We investigate the effect of supersymmetric CP violating phases on the inclusive decay B\to X_d\gamma. Although such a decay contains a large background from B\to X_s\gamma, if isolated it may exhibit sizeable CP violation, both in the Standard Model (SM) and in the context of models beyond the SM. With unconstrained supersymmetric CP violating phases we show that the direct CP asymmetry (A_CP) lies in the region -40% \le A_CP \le 40%, where a positive asymmetry would constitute a clear signal of physics beyond the SM. Even if a direct measurement of B\to X_d\gamma proves too dif ficult experimentally, its asymmetry contributes non-negligibly to the measurements of A_CP for B\to X_s\gamma, and thus should be included in future analyses. We show t hat there may be both constructive and destructive interference between A^d\gamma_CP and A^s\gamma_CP.Comment: 12 pages, 6 figures. Full Res. figures (and PostScript of paper) available at http://www-th.kek.jp/home/stefan/b2dgamma

A Systematic Review of therapeutic agents for the treatment of the Middle East Respiratory Syndrome Coronavirus (MERS-CoV)

Background The Middle East Respiratory Syndrome Coronavirus (MERS-CoV) was first described in 2012 and attracted a great international attention due to multiple healthcare associated outbreaks. The disease carries a high case fatality rate of 34.5%, and there is no internationally or nationally recommended therapy. Method We searched MEDLINE, Science Direct, Embase and Scopus databases for relevant papers published till March 2019 describing in vitro, in vivo or human therapy of MERS. Results Initial search identified 62 articles: 52 articles were from Medline, 6 from Embase, and 4 from Science Direct. Based on the inclusions and exclusions criteria, 30 articles were included in the final review and comprised: 22 in vitro studies, 8 studies utilizing animal models, 13 studies in humans, and one study included both in vitro and animal model. There are a few promising therapeutic agents on the horizon. The combination of lopinavir/ritonavir and interferon-beta- 1b showed excellent results in common marmosets and currently is in a randomized control trial. Ribavirin and interferon were the most widely used combination and experience comes from a number of observational studies. Although, the data are heterogenous, this combination might be of potential benefit and deserve further investigation. There were no randomized clinical trials to recommend specific therapy for the treatment of MERS-CoV infection. Only one such study is planned for randomization and is pending completion. The study is based on a combination of lopinavir/ritonavir and interferon-beta- 1b. A fully human polyclonal IgG antibody (SAB-301) was safe and well tolerated in healthy individuals and this agent may deserve further testing for efficacy. Conclusion Despite multiple studies in humans there is no consensus on the optimal therapy for MERS-CoV. Randomized clinical trials are needed and potential therapies should be evaluated only in such clinical trials. In order to further enhance the therapeutic aroma for MERS-CoV infection, repurposing old drugs against MERS-CoV is an interesting strategy and deserves further consideration and use in clinical settings

Nutrient Digestibility and Productivity of Bali Cattle Fed Fermented Hymenachne Amplexia­calis Based Rations Supplemented with Leucaena Leucocephala

An experiment was conducted to study the effects of lamtoro (Leucaena leucocephala) leaf supplementation in fermented kumpai grass (Hymenachne amplexia­calis) based rations on the productivity of Bali cattle. Variables measured were dry matter and organic matter intakes, nutrient digestibility (dry matter, organic matter, crude protein, and crude fiber), body weight gain, and feed efficiency. The types of rations were: Ration A= 45% fermented kumpai grass + 40% benggala grass + 15% concentrate + 0% lamtoro leaf, Ration B= 45% fermented kumpai grass + 30% benggala grass + 15% concentrate + 10% lamtoro leaf, Ration C= 45% fermented kumpai grass + 20% benggala grass + 15% concentrate + 20% lamtoro leaf, and Ration D= 45% fermented kumpai grass + 10% benggala grass + 15% concentrate + 30% lamtoro leaf. The supplementation of lamtoro leaf up to 30% into the ration could increase (P<0.05) dry matter and organic matter intakes, and crude protein digestibility. The highest body weight gain and feed efficiency were found in Bali cattle fed ration with 20% lamtoro leaf supplementation. The level of lamtoro leaf supplementation in the ration did not affect the digestibility of dry matter, organic matter, and crude fiber. It was concluded that the supplementation of lamtoro leaf in the ration could increase dry matter, organic matter, and crude protein intakes. Addition of 20% lamtoro leaf gave the best effect on the increased body weight gain and feed efficiency in Bali cattle

Two flavors of dynamical quarks on anisotropic lattices

We report on our study of two-flavor full QCD on anisotropic lattices using $O(a)$-improved Wilson quarks coupled with an RG-improved glue. The bare gauge and quark anisotropies corresponding to the renormalized anisotropy $\xi=a_s/a_t = 2$ are determined as functions of $\beta$ and $\kappa$, which covers the region of spatial lattice spacings $a_s\approx 0.28$--0.16 fm and $m_{PS}/m_V\approx 0.6$--0.9. The calibrations of the bare anisotropies are performed with the Wilson loop and the meson dispersion relation at 4 lattice cutoffs and 5--6 quark masses. Using the calibration results we calculate the meson mass spectrum and the Sommer scale $r_0$. We confirm that the values of $r_0$ calculated for the calibration using pseudo scalar and vector meson energy momentum dispersion relation coincide in the continuum limit within errors. This work serves to lay ground toward studies of heavy quark systems and thermodynamics of QCD including the extraction of the equation of state in the continuum limit using Wilson-type quark actions.Comment: 16 pages, 23 figures, Version accepted for publication in Physical Review