THE IMPORTANCE OF CAPITAL MARKET IN ECONOMY

All participants in capital markets are asking how to finance investments or to invest money available. The answer to these questions depends on the situation you have: deficit or surplus capital. This article addresses issues concerning the place and role of capital market within the financial markets and in financing investments, trying to highlight the growing importance of this subsystem, shown both to economic agents and to all categories of investors.capital market, stock exchange, investment, economic development

A Comparative Analysis of the Efficiency of Romanian Banks

In this paper, we analyze the efficiency of the main banks in Romania, the Czech Republic and Hungary for the period 2000-2006, by using the frontier analysis. For the estimation of efficiency of banking we used a nonparametric method – the DEA Method (Data Envelopment Analysis) and a parametric method - the SFA Method (Stochastic Frontier Analysis). The results of the analyses show that the banks in the three East-European countries reach low levels of technical efficiency and cost efficiency, especially the ones in Romania, and that the main factors influencing the level of banks efficiency in these countries are: quality of assets; bank size, annual inflation rate; banking reform and interest rate liberalisation level and form of ownership.efficiency, banking, DEA method, SFA method

COMPETITION IN ROMANIAN BANKING SECTOR

Recent turmoil in the global financial system has impacted severely on the banking sector with many banks suffering large losses and necessitating the need to raise additional capital privately or through their respective national governments. In our study we investigate the impact of structural reforms performed throughout the European Union (EU) accession process on competition and contestability of banking systems in Romania. The literature of the measurement of competition can be divided into two major approaches: structural and non-structural. The structural approach to the assessment of competition embraces the "Structure-Conduct-Performance Hypothesis" (SCP) and the "Efficient Structure Hypothesis" (ESH). The structural approach, as the name suggests, assesses bank competition by examining measures of market structure such as concentration ratios (the share of assets held by the top 3 or 5 institutions) or indices (e.g., the Herfindhal-Hirschman index) and supposes that higher concentration in the banking market causes less competitive bank conduct and leads to higher bank profitability. The SCP model is originally developed by Bain (1956). The second approach, ESH, developed by Demsetz (1973) and Peltzmann (1977) suggests that the superior performance of the market leaders determines the market structure, implying that higher efficiency produces both higher concentration and greater profitability. The non-structural indicators of competition are mainly based on the measures of monopoly power developed by Lerner (1934). The Lerner Index suggests the mark-up of price over marginal cost. An alternative non-structural indicator of the degree of market competition is the Panzar and Rosse (1987) H-statistic. The H-statistic measures the extent to which changes in banking costs are reflected in changes in banking revenues. In order to examine the level of competition and market power of banks in Romania for period 2003 - 2009, we estimate the non-structural indicators and compare it with the structural indicators of competition. In particular, we measure competition using Lerner index and the H-statistic, indicators what are estimated using bank-level data and are compared with a standard market structure measure of concentration like HHI and CR5. There are no other studies that measure both structural and non-structural competition indicators for Romanian banking sector. Also, our assessment contains a period of seven years including the begging of the implications of the present international financial crises on Romanian banking sector.The structural indicators show continuous increase of competition in the Romanian banking system. Lerner index and H statistic demonstrate that Romanian banking system is characterized by monopolistic competition and relatively competitive practices. Personnel cost, operational cost and financial cost are statistically significant at conventional levels, which imply good fit of the revenue equations. The results also demonstrate that excess fixed assets do not generate abnormal revenue.bank competition, Lerner index, H statistic, structural indicators, Romanian banking system

The Impact of International Swap Lines on Stock Returns of Banks in Emerging Markets

This paper investigates the impact of international swap lines on stock returns using data from banks in emerging markets. The analysis shows that swap lines by the Swiss National Bank (SNB) had a positive impact on bank stocks in Central and Eastern Europe. It then highlights the importance of individual bank characteristics in identifying the impact of swap lines on bank stocks. Bank-level evidence suggests that stock prices of local and less-well capitalized banks as well as banks with high foreign currency exposures and high reliance on short-term funding responded more strongly to SNB swap lines. This new evidence is consistent with the view that swap lines not only enhanced market liquidity but also reduced risks associated with micro-prudential issues

Risk Spillovers and Interconnectedness between Systemically Important Institutions

In this paper, we gauge the degree of interconnectedness and quantify the linkages between global and other systemically important institutions, and the global financial system. We document that the two groups and the financial system become more interconnected during the global financial crisis when linkages across groups grow. In contrast, during tranquil times linkages within groups prevail. Global systemically important banks (G-SIBs) contribute most to system-wide distress but are also most exposed. There are more links coming from G-SIBs to other systemically important institutions (O-SIIs) than the other way around, confirming the role of G-SIBs as major risk transmitters in the financial system. The two groups and the global financial system tend to co-vary for periods up to 60 days Prior to their official designation as G-SIBs or O-SIIs, the prevalent news sentiment about these institutions (we measure with a textual analysis) was negative. Importantly, the systemic importance and exposure of G-SIBs and O-SIIs is perceived differently by the Financial Stability Board (FSB) and the European Banking Authority (EBA)

ESG and systemic risk

How do changes in Environmental, Social and Governance (ESG) scores influence banks’ systemic risk contribution? Using a dynamic panel model, we document a beneficial impact of the ESG Combined Score and Governance pillar on banks’ contribution to system-wide distress analysing a panel of 367 publicly listed banks from 47 countries over the period 2007-2020. Stakeholder theory and theory relating social performance to expected returns in which enhanced investments in corporate social responsibility mitigate bank specific risks explain our findings. However, only better corporate governance represents a tool in reducing bank interconnectedness and maintaining financial stability. The results are robust to alternative measures of systemic risk, both contribution and exposure, as well as when estimating a static model. Our findings stress the importance of integrating banks’ ESG disclosure into regulatory authorities’ supervisory mechanisms as qualitative information

External wealth of nations and systemic risk

External imbalances played a pivotal role leading to the global financial crisis and were an important cause of turmoil. While current account (flow) imbalances narrowed in the aftermath of the crisis, the net international investment position (NIIP) (stock) imbalances persisted. This study explores the implications of countries’ net foreign positions on systemic risk. Using a sample of 470 banks located in 49 advanced economies, emerging countries, and developing economies over 2000–2020, we find robust empirical evidence that banks can reduce their systemic risk exposure when the countries in which they are incorporated improve their NIIPs and maintain creditor status vis-à-vis the rest of the world. However, only the equity component of the NIIP is responsible for this outcome, whereas debt flows are not significant. Similarly, we find that the mitigating effect of an external balance sheet on systemic risk is derived from valuation gains rather than from the incremental net acquisition of assets or liabilities represented by the current account. Our findings are particularly relevant for policymakers seeking to improve banks’ resilience to adverse shocks and maintain financial stability.publishedVersio

Minimal important difference in weight loss following bariatric surgery:Enhancing BODY-Q interpretability

BODY-Q is a patient-reported outcome measure for comprehensive assessment of outcomes specific to patients undergoing bariatric surgery. The clinical utility of BODY-Q is hampered by the lack of guidance on score interpretation. This study aimed to determine minimal important difference (MID) for assessment of BODY-Q. Prospective BODY-Q data from Denmark and the Netherlands pre- and post-bariatric surgery were collected. Two distribution-based methods were used to estimate MID by 0.2 standard deviations of baseline scores and the mean standardized response change of scores from baseline to 3-years postoperatively. In total, 5476 assessments from 2253 participants were included of which 1628 (72.3%) underwent Roux-en-Y gastric bypass, 586 (26.0%) sleeve gastrectomy, 33 (1.5%) gastric banding, and 6 (0.03%) other surgeries. The mean age was 45.1 ± 10.9 with a mean BMI of 46.6 ± 9.6. Baseline MID ranged from 1 to 4 in health-related quality of life (HRQL) and from 2 to 8 in appearance scales. The mean change of scores ranged from 4 to 5 in HRQL and from 4 to 7 in the appearance scales. The estimated MID for the change in BODY-Q HRQL and appearance scales ranged from 3 to 8 and is recommended for use to interpret BODY-Q scores and assess treatment effects in bariatric surgery.</p

Investigating Intestinal Glucagon after Roux-en-Y Gastric Bypass Surgery

CONTEXT: After Roux-en-Y gastric bypass (RYGB) surgery, postprandial plasma glucagon concentrations have been reported to increase. This occurs despite concomitant improved glucose tolerance and increased circulating plasma concentrations of insulin and the glucagon-inhibiting hormone glucagon-like peptide 1 (GLP-1).OBJECTIVE: To investigate whether RYGB-induced hyperglucagonemia may be derived from the gut.DESIGN AND SETTING: Substudy of a prospective cross-sectional study at a university hospital in Copenhagen, Denmark.PARTICIPANTS: Morbidly obese individuals undergoing RYGB (n = 8) with or without type 2 diabetes.INTERVENTIONS: Three months before and after RYGB, participants underwent upper enteroscopy with retrieval of gastrointestinal mucosal biopsy specimens. Mixed-meal tests were performed 1 week and 3 months before and after RYGB.MAIN OUTCOME MEASURES: The 29-amino acid glucagon concentrations in plasma and in mucosal gastrointestinal biopsy specimens were assessed using mass spectrometry-validated immunoassays, and a new monoclonal antibody reacting with immunoreactive glucagon was used for immunohistochemistry.RESULTS: Postprandial plasma concentrations of glucagon after RYGB were increased. Expression of the glucagon gene in the small intestine increased after surgery. Glucagon was identified in the small-intestine biopsy specimens obtained after, but not before, RYGB. Immunohistochemically, mucosal biopsy specimens from the small intestine harbored cells costained for GLP-1 and immunoreactive glucagon.CONCLUSION: Increased concentrations of glucagon were observed in small-intestine biopsy specimens and postprandially in plasma after RYGB. The small intestine harbored cells immunohistochemically costaining for GLP-1 and glucagon-like immunoreactivity after RYGB. Glucagon derived from small-intestine enteroendocrine l cells may contribute to postprandial plasma concentrations of glucagon after RYGB.</p

Body Contouring Surgery after Bariatric Surgery Improves Long-Term Health-Related Quality of Life and Satisfaction with Appearance: An International Longitudinal Cohort Study Using the BODY-Q

Objective: To examine health-related quality of life (HRQL) and satisfaction with appearance in patients who have undergone bariatric surgery (BS) with or without subsequent body contouring surgery (BCS) in relation to the general population normative for the BODY-Q. Background: The long-term impact of BS with or without BCS has not been established using rigorously developed and validated patient-reported outcome measures. The BODY-Q is a patient-reported outcome measure developed to measure changes in HRQL and satisfaction with appearance in patients with BS and BCS. Methods: Prospective BODY-Q data were collected from 6 European countries (Denmark, the Netherlands, Finland, Germany, Italy, and Poland) from June 2015 to February 2022 in a cohort of patients who underwent BS. Mixed-effects regression models were used to analyze changes in HRQL and appearance over time between patients who did and did not receive BCS and to examine the impact of patient-level covariates on outcomes. Results: This study included 24,604 assessments from 5620 patients. BS initially led to improved HRQL and appearance scores throughout the first postbariatric year, followed by a gradual decrease. Patients who underwent subsequent BCS after BS experienced a sustained improvement in HRQL and appearance or remained relatively stable for up to 10 years postoperatively. Conclusions: Patients who underwent BCS maintained an improvement in HRQL and satisfaction with appearance in contrast to patients who only underwent BS, who reported a decline in scores 1 to 2 years postoperatively. Our results emphasize the pivotal role that BCS plays in the completion of the weight loss trajectory