"Too Big to Fail: Motives, Countermeasures, and the Dodd-Frank Response"

Government forbearance, support, and bailouts of banks and other financial institutions deemed "too big to fail" (TBTF) are widely recognized as encouraging large companies to take excessive risk, placing smaller ones at a competitive disadvantage and influencing banks in general to grow inefficiently to a "protected" size and complexity. During periods of financial stress, with bailouts under way, government officials have promised "never again." During periods of financial stability and economic growth, they have sanctioned large-bank growth by merger and ignored the ongoing competitive imbalance. Repeated efforts to do away with TBTF practices over the last several decades have been unsuccessful. Congress has typically found the underlying problem to be inadequate regulation and/or supervision that has permitted important financial companies to undertake excessive risk. It has responded by strengthening regulation and supervision. Others have located the underlying problem in inadequate regulators, suggesting the need for modifying the incentives that motivate their behavior. A third explanation is that TBTF practices reflect the government's perception that large financial firms serve a public interest-they constitute a "national resource" to be preserved. In this case, a structural solution would be necessary. Breakups of the largest financial firms would distribute the "public interest" among a larger group than the handful that currently hold a disproportionate concentration of financial resources. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 constitutes the most recent effort to eliminate TBTF practices. Its principal focus is on the extension and augmentation of regulation and supervision, which it envisions as preventing excessive risk taking by large financial companies; Congress has again found the cause for TBTF practices in the inadequacy of regulation and supervision. There is no indication that Congress has given any credence to the contention that regulatory motivations have been at fault. Finally, Dodd-Frank eschews a structural solution, leaving the largest financial companies intact and bank regulatory agencies still with extensive discretion in passing on large bank mergers. As a result, the elimination of TBTF will remain problematic for years to come.Too Big to Fail; Banking Policy; Antitrust; Government Policy; Regulation

"The Limits of Prudential Supervision: Economic Problems, Institutional Failure and Competence"

Bank supervision typically receives little if any attention when banks are operating without difficulty. But when banks fail in large numbers, or large banks fail, and the system itself is threatened, supervision becomes a focal point for criticism and reform (see, for example, Conference Report, 1998, Title I, IX; Pecchioli, 1987, pp. 11 ff.; and Comptroller General of the U.S., 1977). On such occasions, institutional changes may take equal billing with the "improvement" of supervision. But as often as not, the only thing Congress can agree on is that supervision needs to be better. This usually translates into more supervisors operating with more authority. The repeated augmentation of bank supervision may give the impression that it is a solution rather that a symptom of recurring banking problems; and it is in the interest of supervisors to suggest that this is the case. Repeated disappointments about past performances never seem to undermine the promise that more and better supervisors, with more authority, will make things better in the future. The historical record suggests that this is not true. There are, however, independent reasons for questioning whether, in and of itself, more supervisors with more restrictive authority will help very much. It is argued below that the promise of supervisory enhancement is an illusion traceable to the belief that ignores the limitations of supervision in dealing with the problems that actually exist. These limitations include: (1) the existence of an intractable economic problem confronting depository institutions; (2) at least two distinct institutional failures, a fragmented regulatory system composed of multiple agencies and the growth of opportunism among banking organizations, that make it difficult to formulate and implement appropriate policies; and, finally, (3) the inability of the existing supervisory establishment to deal with these economic and structural issues. The nature of supervision is discussed. The limitations are reviewed in Section III, and the inadequacy of the current supervisory establishment to deal with the problems it must deal with to be successful is considered in Section IV. Some proposals to remedy the existing difficulties are presented in Section V. These include the consolidation of the "stand-alone" supervisory agencies with the monetary authority.

"The Limits of Prudential Supervision, Reorganizing the Federal Bank Regulatory Agencies,"

According to Shull, although the recent round of banking legislation--most notably the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and the Federal Deposit Insurance Corporation Improvement Act (FDICIA)--did take steps toward preventing financial crises, it did not go far enough in the area of unifying the regulatory structure. Shull proposes unifying federal bank regulatory agencies that presently have flexible authority over competing institutions. In essence, the reorganization would integrate monetary policy and deposit insurance authority with the conventional functions of regulation and supervision. Shull contends that such an integration would foster greater efficiency, improved policy planning, and better accountability while protecting against the hazards of excessive concentration of power. Among the possibilities for a consolidated regulatory agency, Shull prefers consolidation in the Federal Reserve because it is the only banking agency whose structure was originally designed to deal with concerns about concentration of power.

Projected Employment Effects of a Repeal of the Glass-Steagall Act

Estimated.impacts on borrowing costs from increased underwriting competition are combined with a survey of borrowers regarding anticipated responses to lower costs to derive the predicted increase in domestic financial activity from repeal of the Glass-Steagall Act. This increased.activity is translated into employment impacts using employment patterns in financial and capital goods sectors. The best estimate is that Glass-Steagall repeal will create over 3,000 new primary jobs (with reasonable estimates bounded at about 1,000 and 7,500 jobs). Total employment effects depend on aggregate economic conditions, but in recessions may be as high as 30,000 and are likely to be over 12,500 jobs.Glass Steagall

Subcooling for Long Duration In-Space Cryogenic Propellant Storage

Cryogenic propellants such as hydrogen and oxygen are crucial for exploration of the solar system because of their superior specific impulse capability. Future missions may require vehicles to remain in space for months, necessitating long-term storage of these cryogens. A Thermodynamic Cryogen Subcooler (TCS) can ease the challenge of cryogenic fluid storage by removing energy from the cryogenic propellant through isobaric subcooling of the cryogen below its normal boiling point prior to launch. The isobaric subcooling of the cryogenic propellant will be performed by using a cold pressurant to maintain the tank pressure while the cryogen's temperature is simultaneously reduced using the TCS. The TCS hardware will be integrated into the launch infrastructure and there will be no significant addition to the launched dry mass. Heat leaks into all cryogenic propellant tanks, despite the use of the best insulation systems. However, the large heat capacity available in the subcooled cryogenic propellants allows the energy that leaks into the tank to be absorbed until the cryogen reaches its operational thermodynamic condition. During this period of heating of the subcooled cryogen there will be minimal loss of the propellant due to venting for pressure control. This simple technique can extend the operational life of a spacecraft or an orbital cryogenic depot for months with minimal mass penalty. In fact isobaric subcooling can more than double the in-space hold time of liquid hydrogen compared to normal boiling point hydrogen. A TCS for cryogenic propellants would thus provide an enhanced level of mission flexibility. Advances in the important components of the TCS will be discussed in this paper

Gathering dust : A galaxy-wide study of dust emission from cloud complexes in NGC 300

© 2018 ESO. Reproduced with permission from Astronomy & Astrophysics. Content in the UH Research Archive is made available for personal research, educational, and non-commercial purposes only. Unless otherwise stated, all content is protected by copyright, and in the absence of an open license, permissions for further re-use should be sought from the publisher, the author, or other copyright holder.Aims. We use multi-band observations by the Herschel Space Observatory to study the dust emission properties of the nearby spiral galaxy NGC 300. We compile a first catalogue of the population of giant dust clouds (GDCs) in NGC 300, including temperature and mass estimates, and give an estimate of the total dust mass of the galaxy. Methods. We carried out source detection with the multiwavelength source extraction algorithm getsources. We calculated physical properties, including mass and temperature, of the GDCs from five-band Herschel PACS and SPIRE observations from 100 to 500 μm; the final size and mass estimates are based on the observations at 250 μm that have an effective spatial resolution of ~170 pc. We correlated our final catalogue of GDCs to pre-existing catalogues of HII regions to infer the number of GDCs associated with high-mass star formation and determined the Hα emission of the GDCs. Results. Our final catalogue of GDCs includes 146 sources, 90 of which are associated with known HII regions. We find that the dust masses of the GDCs are completely dominated by the cold dust component and range from ~1.1 × 10 3 to 1.4 × 10 4 M. The GDCs have effective temperatures of ~13-23 K and show a distinct cold dust effective temperature gradient from the centre towards the outer parts of the stellar disk. We find that the population of GDCs in our catalogue constitutes ~16% of the total dust mass of NGC 300, which we estimate to be about 5.4 × 10 6 M. At least about 87% of our GDCs have a high enough average dust mass surface density to provide sufficient shielding to harbour molecular clouds. We compare our results to previous pointed molecular gas observations in NGC 300 and results from other nearby galaxies and also conclude that it is very likely that most of our GDCs are associated with complexes of giant molecular clouds.Peer reviewe

The Interstellar Environment of our Galaxy

We review the current knowledge and understanding of the interstellar medium of our galaxy. We first present each of the three basic constituents - ordinary matter, cosmic rays, and magnetic fields - of the interstellar medium, laying emphasis on their physical and chemical properties inferred from a broad range of observations. We then position the different interstellar constituents, both with respect to each other and with respect to stars, within the general galactic ecosystem.Comment: 39 pages, 12 figures (including 3 figures in 2 parts