Bank liquidity creation and risk taking during distress

Liquidity creation is one of banks' raisons d'être. But what happens to liquidity creation and risk taking when a bank is identified as distressed by regulatory bodies and subjected to regulatory interventions and/or receives capital injections? What are the long-run effects of such interventions? To address these questions, we exploit a unique dataset of German universal banks for the period 1999 - 2008. Our main findings are as follows. First, regulatory interventions and capital injections are followed by lower levels of liquidity creation. The probability of a decline in liquidity creation increases to up to around 50 percent when such actions are taken. Second, bank risk taking decreases in the aftermath of regulatory interventions and capital injections. Third, while banks' liquidity creation market shares decline over the five years following such disciplinary measures, they also reduce their risk exposure over this period to become safer banks. --Liquidity creation,bank distress,regulatory interventions,capital injections

The Mid-Infrared Emitting Dust Around AB Aur

Using the Keck I telescope, we have obtained 11.7 micron and 18.7 micron images of the circumstellar dust emission from AB Aur, a Herbig Ae star. We find that AB Aur is probably resolved at 18.7 micron with an angular diameter of 1.2" at a surface brightness of 3.5 Jy/arcsec^2. Most of the dust mass detected at millimeter wavelengths does not contribute to the 18.7 micron emission, which is plausibly explained if the system possesses a relatively cold, massive disk. We find that models with an optically thick, geometrically thin disk, surrounded by an optically thin spherical envelope fit the data somewhat better than flared disk models.Comment: ApJ in press, 4 color figure

Grain growth and dust settling in a brown dwarf disk: Gemini/T-ReCS observations of CFHT-BD-Tau 4

We present accurate mid-infrared observations of the disk around the young, bona-fide brown dwarf CFHT-BD-Tau 4. We report GEMINI/T-ReCS measurements in the 7.9, 10.4 and 12.3 micron filters, from which we infer the presence of a prominent, broad silicate emission feature. The shape of the silicate feature is dominated by emission from 2 micron amorphous olivine grains. Such grains, being an order of magnitude larger than those in the interstellar medium, are a first proof of dust processing and grain growth in disks around brown dwarfs. The object's spectral energy distribution is below the prediction of the classical flared disk model but higher than that of the two-layer flat disk. A good match can be achieved by using an intermediate disk model with strongly reduced but non-zero flaring. Grain growth and dust settling processes provide a natural explanation for this disk geometry and we argue that such intermediate flaring might explain the observations of several other brown dwarf disks as well.Comment: Accepted for publication in Astronomy & Astrophysics Letters, 4.5 pages with 1 figur

The composition and nature of the dust shell surrounding the binary AFGL 4106

We present infrared spectroscopy and imaging of AFGL~4106. The 2.4-5 micron ISO-SWS spectrum reveals the presence of a cool, luminous star (T_eff ~ 3750 K) in addition to an almost equally luminous F star (T_eff ~ 7250 K). The 5-195 micron SWS and LWS spectra are dominated by strong emission from circumstellar dust. We find that the dust consists of amorphous silicates, with a minor but significant contribution from crystalline silicates. The amorphous silicates consist of Fe-rich olivines. The presence of amorphous pyroxenes cannot be excluded but if present they contain much less Fe than the amorphous olivines. Comparison with laboratory data shows that the pure Mg-end members of the crystalline olivine and pyroxene solid solution series are present. In addition, we find strong evidence for simple oxides (FeO and Al2O3) as well as crystalline H2O ice. Several narrow emission features remain unidentified. Modelling of the dust emission using a dust radiation transfer code shows that large grains (~1 micron) must be present and that the abundance of the crystalline silicates is between 7 and 15% of the total dust mass, depending on the assumed enstatite to forsterite ratio, which is estimated to be between 1 and 3. The amorphous and crystalline dust components in the shell do not have the same temperature, implying that the different dust species are not thermally coupled. We find a dust mass of ~3.9 x 10^-2 M_sol expelled over a period of 4 x 10^3 years for a distance of 3.3 kpc. The F-star in the AFGL~4106 binary is likely a post-red-supergiant in transition to a blue supergiant or WR phase.Comment: 22 pages (including 12 figures), accepted by Astronomy and Astrophysic

C2D Spitzer-IRS spectra of disks around T Tauri stars V. Spectral decomposition

(Abridged) Dust particles evolve in size and lattice structure in protoplanetary disks, due to coagulation, fragmentation and crystallization, and are radially and vertically mixed in disks. This paper aims at determining the mineralogical composition and size distribution of the dust grains in disks around 58 T Tauri stars observed with Spitzer/IRS. We present a spectral decomposition model that reproduces the IRS spectra over the full spectral range. The model assumes two dust populations: a warm component responsible for the 10\mu m emission arising from the disk inner regions and a colder component responsible for the 20-30\mu m emission, arising from more distant regions. We show evidence for a significant size distribution flattening compared to the typical MRN distribution, providing an explanation for the usual boxy 10\mu m feature profile generally observed. We reexamine the crystallinity paradox, observationally identified by Olofsson et al. (2009), and we find a simultaneous enrichment of the crystallinity in both the warm and cold regions, while grain sizes in both components are uncorrelated. Our modeling results do not show evidence for any correlations between the crystallinity and either the star spectral type, or the X-ray luminosity (for a subset of the sample). The size distribution flattening may suggests that grain coagulation is a slightly more effective process than fragmentation in disk atmospheres, and that this imbalance may last over most of the T Tauri phase. This result may also point toward small grain depletion via strong stellar winds or radiation pressure in the upper layers of disk. The non negligible cold crystallinity fractions suggests efficient radial mixing processes in order to distribute crystalline grains at large distances from the central object, along with possible nebular shocks in outer regions of disks that can thermally anneal amorphous grains

Spectral Energy Distributions of T Tauri and Herbig Ae Disks: Grain Mineralogy, Parameter Dependences, and Comparison with ISO LWS Observations

We improve upon the radiative, hydrostatic equilibrium models of passive circumstellar disks constructed by Chiang & Goldreich (1997). New features include (1) account for a range of particle sizes, (2) employment of laboratory-based optical constants of representative grain materials, and (3) numerical solution of the equations of radiative and hydrostatic equilibrium within the original 2-layer (disk surface + disk interior) approximation. We explore how the spectral energy distribution (SED) of a face-on disk depends on grain size distributions, disk geometries and surface densities, and stellar photospheric temperatures. Observed SEDs of 3 Herbig Ae and 2 T Tauri stars, including spectra from the Long Wavelength Spectrometer (LWS) aboard the Infrared Space Observatory (ISO), are fitted with our models. Silicate emission bands from optically thin, superheated disk surface layers appear in nearly all systems. Water ice emission bands appear in LWS spectra of 2 of the coolest stars. Infrared excesses in several sources are consistent with vertical settling of photospheric grains. While this work furnishes further evidence that passive reprocessing of starlight by flared disks adequately explains the origin of infrared-to-millimeter wavelength excesses of young stars, we emphasize how the SED alone does not provide sufficient information to constrain particle sizes and disk masses uniquely.Comment: Accepted to ApJ, 35 pages inc. 14 figures, AAS preprin