The impact of real estate, inequality and current account imbalances on excessive credit: A cross country analysis

The numerous financial crises in the 20th and 21st century demonstrate the role of excessive credit as the main instigator of financial crises. Could this excessive credit be natural byproducts of lingering economic ailments such as, income inequality, property bubbles and persistent current account imbalances? This study attempts to answer this question by applying the Least Squares Dummy Variable (LSDVC) and dynamic GMM estimations based on the data of ten countries from the year 2004 to 2012. Whilst past literature have investigated the effect of income inequality, dominant real estate sector and current account imbalances on excessive credit separately, this study extends the literature by examining the impact of all three variables on excessive credit aggregately. Our findings tend to indicate that there do exist a positive relationship between all three variables and excessive credit. However, we found that only income inequality and the real estate sector contribute significantly to excessive credit but current account imbalances only marginally do so. We also discovered that the contribution to excessive credit by the banking sector is just about twice the amount of all three variables combined. Our results serve as evidence for policymakers interested in reducing excessive credit by controlling all three variables as well as the banking sector

The impact of real estate, inequality and current account imbalances on excessive credit: A cross country analysis

The numerous financial crises in the 20th and 21st century demonstrate the role of excessive credit as the main instigator of financial crises. Could this excessive credit be natural byproducts of lingering economic ailments such as, income inequality, property bubbles and persistent current account imbalances? This study attempts to answer this question by applying the Least Squares Dummy Variable (LSDVC) and dynamic GMM estimations based on the data of ten countries from the year 2004 to 2012. Whilst past literature have investigated the effect of income inequality, dominant real estate sector and current account imbalances on excessive credit separately, this study extends the literature by examining the impact of all three variables on excessive credit aggregately. Our findings tend to indicate that there do exist a positive relationship between all three variables and excessive credit. However, we found that only income inequality and the real estate sector contribute significantly to excessive credit but current account imbalances only marginally do so. We also discovered that the contribution to excessive credit by the banking sector is just about twice the amount of all three variables combined. Our results serve as evidence for policymakers interested in reducing excessive credit by controlling all three variables as well as the banking sector

Risk Taking Behavior and Capital Adequacy in a Mixed Banking System: New Evidence from Malaysia using Dynamic OLS and Two-step Dynamic System GMM Estimators

The financial and banking crises around the world have prompted the regulators to revise, among others, the capital level of the banks to deal with the excessive risks taken by the banks, both conventional and Islamic. This study is the first attempt to investigate the relationship between risky assets and capital level in a mixed banking system applying the panel VECM and dynamic GMM estimators. The Malaysian mixed banking system is used as a case study taking panel data covering the period from December 2006 to October 2013. Our statistical results based on dynamic OLS (DOLS) tend to indicate that there is a positive relationship between the capital ratio (CAR) and risk weighted asset ratio (RWA) in the long run and also, the causality analysis based on panel VECM and two-step dynamic System GMM tends to indicate unidirectional causality in that the RWA is positively driven by CAR. Our results appear to suggest that higher capital buffer (excess capital above regulatory capital requirement) might have opened up more space for bank managers to taking risky positions while assisted by increasing domestic demand for credit facilities under favorable economic condition of Malaysia. In other words, high capital growth and capital buffer provides an extra cushion for Malaysian banks to pursue relatively riskier financing activities. For the full-fledge Islamic banks (IB) and Islamic bank subsidiaries (IBS), the existence of a cointegrating relationship between RWA and CAR suggests that the way the managers of Islamic banks behave towards risky assets follows the conventional practice

Barium & related stars and their white-dwarf companions II. Main-sequence and subgiant stars

Barium (Ba) dwarfs and CH subgiants are the less-evolved analogues of Ba and CH giants. They are F- to G-type main-sequence stars polluted with heavy elements by a binary companion when the latter was on the Asymptotic Giant Branch (AGB). This companion is now a white dwarf that in most cases cannot be directly detected. We present a large systematic study of 60 objects classified as Ba dwarfs or CH subgiants. Combining radial-velocity measurements from HERMES and SALT high-resolution spectra with radial-velocity data from CORAVEL and CORALIE, we determine the orbital parameters of 27 systems. We also derive their masses by comparing their location in the Hertzsprung-Russell diagram with evolutionary models. We confirm that Ba dwarfs and CH subgiants are not at different evolutionary stages and have similar metallicities, despite their different names. Additionally, Ba giants appear significantly more massive than their main-sequence analogues. This is likely due to observational biases against the detection of hotter main-sequence post-mass-transfer objects. Combining our spectroscopic orbits with the Hipparcos astrometric data, we derive the orbital inclinations and the mass of the WD companion for four systems. Since this cannot be done for all systems in our sample yet (but should be with upcoming Gaia data releases), we also analyse the mass-function distribution of our binaries. We can model this distribution with very narrow mass distributions for the two components and random orbital orientation on the sky. Finally, based on BINSTAR evolutionary models, we suggest that the orbital evolution of low-mass Ba systems can be affected by a second phase of interaction along the Red Giant Branch of the Ba star, impacting on the eccentricities and periods of the giants.Comment: Accepted for publication in A&A on the 5th of April, 201

Risk Taking Behavior and Capital Adequacy in a Mixed Banking System: New Evidence from Malaysia using Dynamic OLS and Two-step Dynamic System GMM Estimators

The financial and banking crises around the world have prompted the regulators to revise, among others, the capital level of the banks to deal with the excessive risks taken by the banks, both conventional and Islamic. This study is the first attempt to investigate the relationship between risky assets and capital level in a mixed banking system applying the panel VECM and dynamic GMM estimators. The Malaysian mixed banking system is used as a case study taking panel data covering the period from December 2006 to October 2013. Our statistical results based on dynamic OLS (DOLS) tend to indicate that there is a positive relationship between the capital ratio (CAR) and risk weighted asset ratio (RWA) in the long run and also, the causality analysis based on panel VECM and two-step dynamic System GMM tends to indicate unidirectional causality in that the RWA is positively driven by CAR. Our results appear to suggest that higher capital buffer (excess capital above regulatory capital requirement) might have opened up more space for bank managers to taking risky positions while assisted by increasing domestic demand for credit facilities under favorable economic condition of Malaysia. In other words, high capital growth and capital buffer provides an extra cushion for Malaysian banks to pursue relatively riskier financing activities. For the full-fledge Islamic banks (IB) and Islamic bank subsidiaries (IBS), the existence of a cointegrating relationship between RWA and CAR suggests that the way the managers of Islamic banks behave towards risky assets follows the conventional practice

Binary-object spectral-synthesis in 3D (BOSS-3D) -- Modelling H-alpha emission in the enigmatic multiple system LB-1

Context: To quantitatively decode the information stored within an observed spectrum, detailed modelling of the physical state and accurate radiative transfer solution schemes are required. In the analysis of stellar spectra, the numerical model often needs to account for binary companions and 3D structures in the stellar envelopes. The enigmatic binary (or multiple) system LB-1 constitutes a perfect example of such a complex multi-D problem. Aims: To improve our understanding of the LB-1 system, we directly modelled the phase-dependent H-alpha line profiles of this system. To this end, we developed a multi-purpose binary-object spectral-synthesis code in 3D (BOSS-3D). Methods: BOSS-3D calculates synthetic line profiles for a given state of the circumstellar material. The standard pz-geometry commonly used for single stars is extended by defining individual coordinate systems for each involved object and by accounting for the appropriate coordinate transformations. The code is then applied to the LB-1 system, considering two main hypotheses, a binary containing a stripped star and Be star, or a B star and a black hole with a disc. Results: Comparing these two scenarios, neither model can reproduce the detailed phase-dependent shape of the H-alpha line profiles. A satisfactory match with the observations, however, is obtained by invoking a disc around the primary object in addition to the Be-star disc or the black-hole accretion disc. Conclusions: The developed code can be used to model synthetic line profiles for a wide variety of binary systems, ranging from transit spectra of planetary atmospheres, to post-asymptotic giant branch binaries including circumstellar and circumbinary discs and massive-star binaries with stellar winds and disc systems. For the LB-1 system, our modelling provides strong evidence that each object in the system contains a disc-like structure

Is HR 6819 a triple system containing a black hole? -- An alternative explanation

HR 6819 was recently proposed to be a triple system consisting of an inner B-type giant + black hole binary with an orbital period of 40d and an outer Be tertiary. This interpretation is mainly based on two inferences: that the emission attributed to the outer Be star is stationary, and that the inner star, which is used as mass calibrator for the black hole, is a B-type giant. We re-investigate the properties of HR 6819 by spectral disentangling and an atmosphere analysis of the disentangled spectra to search for a possibly simpler alternative explanation for HR 6819. Disentangling implies that the Be component is not a static tertiary, but rather a component of the binary in the 40-d orbit. The inferred radial velocity amplitudes imply an extreme mass ratio of M_2/M_1 = 15 +/- 3. We infer spectroscopic masses of 0.4$^{+0.3}_{-0.1}$ Msun and 6$^{+5}_{-3}$ Msun for the primary and secondary, which agree well with the dynamical masses for an inclination of i = 32 deg. This indicates that the primary might be a stripped star rather than a B-type giant. Evolutionary modelling suggests that a possible progenitor system would be a tight (P_i ~ 2d) B+B binary system that experienced conservative mass transfer. While the observed nitrogen enrichment of the primary conforms with the predictions of the evolutionary models, we find no indications for the predicted He enrichment. We suggest that HR 6819 is a binary system consisting of a stripped B-type primary and a rapidly-rotating Be star that formed from a previous mass-transfer event. In the framework of this interpretation, HR 6819 does not contain a black hole. Interferometry can distinguish between these two scenarios by providing an independent measurement of the separation between the visible components.Comment: Submitted to A&A, 13 pages (16 figures and 2 tables); 4 pages supplementary material (4 figures and 4 tables). Comments are welcom

Empirical mass-loss rates and clumping properties of Galactic early-type O supergiants

International audienceAims. We investigate the impact of optically thick clumping on spectroscopic stellar wind diagnostics in O supergiants and constrain wind parameters associated with porosity in velocity space. This is the first time the effects of optically thick clumping have been investigated for a sample of massive hot stars, using models which include a full optically thick clumping description. Methods. We re-analyse existing spectroscopic observations of a sample of eight O supergiants previously analysed with the non-local-thermodynamic-equilibrium (NLTE) atmosphere code CMFGEN. Using a genetic algorithm wrapper around the NLTE atmosphere code FASTWIND we obtain simultaneous fits to optical and ultraviolet spectra and determine photospheric properties, chemical surface abundances and wind properties. Results. We provide empirical constraints on a number of wind parameters including the clumping factors, mass-loss rates and terminal wind velocities. Additionally, we establish the first systematic empirical constraints on velocity filling factors and interclump densities. These are parameters that describe clump distribution in velocity-space and density of the interclump medium in physical-space, respectively. We observe a mass-loss rate reduction of a factor of 3.6 compared to theoretical predictions from Vink et al. (2000), and mass-loss rates within a factor 1.4 of theoretical predictions from Björklund et al. (2021). Conclusions. We confirm that including optically thick clumping allows simultaneous fitting of optical recombination lines and ultraviolet resonance lines, including the unsaturated ultraviolet phosphorus lines (P v λλ1118-1128), without reducing the phosphorus abundance. We find that, on average, half of the wind velocity field is covered by dense clumps. We also find that these clumps are 25 times denser than the average wind, and that the interclump medium is 3-10 times less dense than the mean wind. The former result agrees well with theoretical predictions, the latter suggests that lateral filling-in of radially compressed gas might be critical for setting the scale of the rarefied interclump matter

Tango of celestial dancers: A sample of detached eclipsing binary systems containing g-mode pulsating components. A case study of KIC9850387

Context. Eclipsing binary systems with components that pulsate in gravity modes (g modes) allow for simultaneous and independent constraints of the chemical mixing profiles of stars. The high precision of the dynamical masses and radii as well as the imposition of identical initial chemical compositions and equivalent ages provide strong constraints during the modelling of g-mode period-spacing patterns. Aims. We aim to assemble a sample of g-mode pulsators in detached eclipsing binaries with the purpose of finding good candidates for future evolutionary and asteroseismic modelling. In addition, we present a case study of the eclipsing binary KIC9850387, identified as our most promising candidate, and detail the results of the observational spectroscopic, photometric, and asteroseismic analysis of the system. Methods. We selected all of the detached eclipsing binaries in the Kepler eclipsing binary catalogue with Kepler Input Catalogue (KIC) temperatures between 6000 K and 10 000 K, and performed a visual inspection to determine the presence and density of g modes, and the presence of g-mode period-spacing patterns in their frequency spectra. We then characterised our sample based on their g-mode pulsational parameters and binary and atmospheric parameters. A spectroscopic follow-up of our most promising candidate was then performed, and the orbital elements of the system were extracted. We then performed spectral disentangling followed by atmospheric modelling and abundance analysis for the primary star. We utilised an iterative approach to simultaneously optimise the pulsational and eclipse models, and subsequently performed an analysis of the pressure- (p-) and g-mode pulsational frequencies. Results. We compiled a sample of 93 Kepler eclipsing binary stars with g-mode pulsating components and identified clear g-mode period-spacing patterns in the frequency spectra of seven of these systems. We also identified 11 systems that contained hybrid p- and g-mode pulsators. We found that the g-mode pulsational parameters and the binary and atmospheric parameters of our sample are weakly correlated at best, as expected for detached main-sequence binaries. We find that the eclipsing binary KIC9850387 is a double-lined spectroscopic binary in a near-circular orbit with a hybrid p- and g-mode pulsating primary with M_p = 1.66_(−0.01)^(+0.01) M⊙ and R_p = 2.154_(−0.004)^(+0.002) R⊙, and a solar-like secondary with M_s = 1.062_(−0.005)^(+0.003) M⊙ and R_s = 1.081_(−0.002)^(+0.003) R⊙. We find ℓ = 1 and ℓ = 2 period-spacing patterns in the frequency spectrum of KIC9850387 spanning more than ten radial orders each, which will allow for stringent constraints of stellar structure during future asteroseismic modelling