Implementing the macroprudential approach to financial regulation and supervision.

There is now a widespread recognition in the policy community of the need to strengthen the macroprudential orientation of financial regulatory and supervisory frameworks. At the same time, the usage of the term “macroprudential” remains ambiguous. This essay summarises the specific definition and characterisation of the term that was developed in the early 2000s at the BIS and outlines the policies needed for implementing the approach. The policies are discussed with reference to two dimensions of the approach. The first is the cross-sectional dimension and is concerned with how aggregate risk is distributed in the financial system at a given point in time. The policy issue here is how to calibrate prudential instruments so as to address common exposures across financial institutions and the contribution of each institution to system-wide tail risk. The second is the time dimension and is concerned with how aggregate risk evolves over time. The policy issue is how to dampen the inherent procyclicality of the financial system, seen as a key source of financial instability. The essay also briefly considers the implications of the adoption of a macroprudential approach for the institutional set-up.

Advancements in low NOx tangential firing systems

The most cost effective method of reducing nitrogen oxide emissions when burning fossil fuels, such as coal, is through in-furnace NOx reduction processes. ABB Combustion Engineering, Inc. (ABB CE), through its ABB Power Plant Laboratories has been involved in the development of such low NOx pulverized coal firing systems for many years. This development effort is most recently demonstrated through ABB CE`s involvement with the U.S. Department of Energy`s (DOE) {open_quotes}Engineering Development of Advanced Coal Fired Low-Emission Boiler Systems{close_quotes} (LEBS) project. The goal of the DOE LEBS project is to use {open_quotes}near term{close_quotes} technologies to produce a commercially viable, low emissions boiler. This paper addresses one of the key technologies within this project, the NOx control subsystem. The foundation for the work undertaken at ABB CE is the TFS 2000{trademark} firing system, which is currently offered on a commercial basis. This system encompasses sub-stoichiometric combustion in the main firing zone for reduced NOx formation. Potential enhancements to this firing system focus on optimizing the introduction of the air and fuel within the primary windbox to provide additional horizontal and vertical staging. As is the case with all in-furnace NOx control processes, it is necessary to operate the system in a manner which does not decrease NOx at the expense of reduced combustion efficiency

Modelling Opportunity Cost Effects in Money Demand due to Openness

We apply a novel model-based approach to constructing composite international financial indices (CIFIs) as measures of opportunity cost effects that arise due to openness in money demand models. These indices are tested on the People’s Republic of China (PRC) and Taiwan Province of China (TPC), two economies which differ substantially in size and degree of financial openness. Results show that (a) stable money demand equations can be identified if accounting for foreign opportunity costs through CIFIs, (b) the monetary policy intervention in the PRC over the global financial crisis period temporarily mitigated disequilibrating foreign shocks to money demand, (c) CIFIs capture opportunity costs due to openness more adequately than commonly used US interest rates and (d) CIFI construction provides valuable insights into the channels through which foreign financial markets affect domestic money demand

Modelling Opportunity Cost Effects in Money Demand due to Openness

We apply a novel model-based approach to constructing composite international financial indices (CIFIs) as measures of opportunity cost effects that arise due to openness in money demand models. These indices are tested on the People’s Republic of China (PRC) and Taiwan Province of China (TPC), two economies which differ substantially in size and degree of financial openness. Results show that (a) stable money demand equations can be identified if accounting for foreign opportunity costs through CIFIs, (b) the monetary policy intervention in the PRC over the global financial crisis period temporarily mitigated disequilibrating foreign shocks to money demand, (c) CIFIs capture opportunity costs due to openness more adequately than commonly used US interest rates and (d) CIFI construction provides valuable insights into the channels through which foreign financial markets affect domestic money demand

A new, very massive modular Liquid Argon Imaging Chamber to detect low energy off-axis neutrinos from the CNGS beam. (Project MODULAr)

The paper is considering an opportunity for the CERN/GranSasso (CNGS) neutrino complex, concurrent time-wise with T2K and NOvA, to search for theta_13 oscillations and CP violation. Compared with large water Cherenkov (T2K) and fine grained scintillators (NOvA), the LAr-TPC offers a higher detection efficiency and a lower backgrounds, since virtually all channels may be unambiguously recognized. The present proposal, called MODULAr, describes a 20 kt fiducial volume LAr-TPC, following very closely the technology developed for the ICARUS-T60o, and is focused on the following activities, for which we seek an extended international collaboration: (1) the neutrino beam from the CERN 400 GeV proton beam and an optimised horn focussing, eventually with an increased intensity in the framework of the LHC accelerator improvement program; (2) A new experimental area LNGS-B, of at least 50000 m3 at 10 km off-axis from the main Laboratory, eventually upgradable to larger sizes. A location is under consideration at about 1.2 km equivalent water depth; (3) A new LAr Imaging detector of at least 20 kt fiducial mass. Such an increase in the volume over the current ICARUS T600 needs to be carefully considered. It is concluded that a very large mass is best realised with a set of many identical, independent units, each of 5 kt, "cloning" the technology of the T600. Further phases may foresee extensions of MODULAr to meet future physics goals. The experiment might reasonably be operational in about 4/5 years, provided a new hall is excavated in the vicinity of the Gran Sasso Laboratory and adequate funding and participation are made available.Comment: Correspondig Author: C. Rubbia (E-mail: [email protected]), 33 pages, 11 figure