Bankruptcy around the world - explanations of its relative use

The recent literature on law and finance has drawn attention to the importance of creditor rights in influencing the development of financial systems and in affecting firm corporate governance and financing patterns. Recent financial crises have also highlighted the importance of insolvency systems to resolve corporate sector financial distress. The literature and crises have emphasized the complex role of creditor rights, affecting not only the efficiency of ex-post resolution of distressed corporations, but also influencing ex-ante risk-taking incentives and an economy's degree of entrepreneurship more generally. The authors document how often bankruptcy is actually being used for a panel of 35 countries. Next they investigate the effects of specific design features of insolvency regimes in relation to the quality of the countries'overall judicial systems on the use of bankruptcy. The authors find, correcting for overall financial development and macroeconomic shocks, that bankruptcies are higher in Anglo-Saxon countries and in market-oriented financial systems characterized by weaker and multiple banking relationships. They also find that greater judicial efficiency is associated with more use of bankruptcy, but that the combination of stronger creditor rights with greater judicial efficiency leads to less use. The authors find that the presence of a"stay on assets"leads to fewer bankruptcies independent of the efficiency of the judicial system. These findings suggest that there are important incentive effects of insolvency systems encouraging less risky behavior and more out-of-court settlements.Labor Policies,International Terrorism&Counterterrorism,Payment Systems&Infrastructure,Strategic Debt Management,Banks&Banking Reform,Strategic Debt Management,Banks&Banking Reform,Housing Finance,Economic Theory&Research,Legal Products

Bankruptcy around the World: Explanations of its Relative Use

The recent literature on law and finance has drawn attention to the importance of creditor rights in influencing the development of financial systems and in affecting firm corporate governance and financing patterns. Recent financial crises have also highlighted the importance of insolvency systems - a key element of creditor rights - to prevent and resolve corporate sector financial distress. The literature and crises have highlighted the role that creditor rights play in not only affecting the efficiency of ex-post resolution of distressed corporations, but also in influencing ex-ante risk-taking incentives and an economy's degree of entrepreneurship more generally. Yet, little is known on how much formal insolvency systems are actually being used, how the use of the courts to resolve financial distress relates to creditor rights, and whether any specific creditor rights matter more. This paper starts with documenting how often bankruptcy is used in a panel of 35 countries. It next investigates the relation between specific design features of insolvency regimes and the use of bankruptcy, considering also the quality of countries’ judicial systems. We find, controlling for overall development and macroeconomic shocks, that bankruptcies are higher in common-law countries and in market-oriented financial systems. Stronger creditor rights are generally associated with more use of bankruptcy, except for the presence of a "stay on assets" that is associated with fewer use of bankruptcy. Greater judicial efficiency is associated with more use of bankruptcy, but there is some substitution between stronger creditor rights and greater judicial efficiency. These findings suggest that the relationship between specific creditor rights features and the use of bankruptcy systems is more complex than perhaps thought. It may also help clarify the relationships between creditor rights, the development of financial systems, corporate ownership, and financing patterns.

Forecasting volatility in commodity markets

Commodity prices have historically been among the most volatile of international prices. Measured volatility (the standard deviation of price changes) has not been below 15 percent and at times has been more than 50 percent. Often the volatility of commodity prices has exceeded that of exchange rates and interest rates. The large price variations are caused by disturbances in demand and supply. Stockholding leads to some price smoothing, but when stocks are low, prices can jump sharply. As a result, commodity price series are not stationary and in some periods they jump abruptly to high levels or fall precipitously to low levels relative to their long-run average. Thus it is difficult to determine long-term price trends and the underlying distribution of prices. The volatility of commodity prices makes price forecasting difficult. Indeed, realized prices often deviate greatly from forecasted prices, which has led to the practice of giving forecasts probability ranges. But assigning probability ranges requires forecasting future price volatility, which, given uncertainties about true price distribution, is difficult. One potentially useful source of information for forecasting volatility is the volatility forecasts imbedded in the prices of options written on commodities traded in exchanges. Options give the holder the right to buy (call) or sell (put) a certain commodity at a certain date at a fixed (exercise) price. Options prices depend on several variables, one of which is the expected volatility up to the maturity date. Given a specific theoretical model, the market prices of options can be used to derive the market's expectations about price volatility and the price distribution. The authors systematically analyze different methods'abilities to forecast commodity price volatility (for several commodities). They collected the daily prices of commodity options and other variables for seven commodities (cocoa, corn, cotton, gold, silver, sugar, and wheat). They extracted the volatility forecasts implicit in options prices using several techniques. They compared several volatility forecasting methods, divided into three categories: (1) forecasts using only expectations derived form options prices; (2) forecasts using only time-series modeling; (3) forecasts that combine market expectations and time-series modeling (a new method devised for this purpose). They find that the volatility forecasts produced by method 3 outperform the first two as well as the naive forecast based on historical volatility. This result holds both in and out of sample for almost all commodities considered.Markets and Market Access,Access to Markets,Economic Theory&Research,Economic Forecasting,Science Education

Nonaffine rubber elasticity for stiff polymer networks

We present a theory for the elasticity of cross-linked stiff polymer networks. Stiff polymers, unlike their flexible counterparts, are highly anisotropic elastic objects. Similar to mechanical beams stiff polymers easily deform in bending, while they are much stiffer with respect to tensile forces (``stretching''). Unlike in previous approaches, where network elasticity is derived from the stretching mode, our theory properly accounts for the soft bending response. A self-consistent effective medium approach is used to calculate the macroscopic elastic moduli starting from a microscopic characterization of the deformation field in terms of ``floppy modes'' -- low-energy bending excitations that retain a high degree of non-affinity. The length-scale characterizing the emergent non-affinity is given by the ``fiber length'' $l_f$, defined as the scale over which the polymers remain straight. The calculated scaling properties for the shear modulus are in excellent agreement with the results of recent simulations obtained in two-dimensional model networks. Furthermore, our theory can be applied to rationalize bulk rheological data in reconstituted actin networks.Comment: 12 pages, 10 figures, revised Section II

(Dodecafluorosubphthalocyaninato)(4-methylphenolato)boron(III)

In the title compound, C31H7BF12N6O, mol­ecules are arranged into one-dimensional columns with an inter­molecular B⋯B distance of 5.3176 (8) Å. Bowl-shaped mol­ecules are arranged within the columns in a concave bowl-to-ligand arrangement separated by a ring centroid distance of 3.532 (2) Å between the benzene ring of the 4-methyl­phen­oxy ligand and one of the three five-membered rings of a symmetry-related mol­ecule

Observation of individual molecules trapped on a nanostructured insulator

For the first time, ordered polar molecules confined in monolayer-deep rectangular pits produced on an alkali halide surface by electron irradiation have been resolved at room temperature by non-contact atomic force microscopy. Molecules self-assemble in a specific fashion inside pits of width smaller than 15 nm. By contrast no ordered aggregates of molecules are observed on flat terraces. Conclusions regarding nucleation and ordering mechanisms are drawn. Trapping in pits as small as 2 nm opens a route to address single molecules

Patching in reversed-phase high-performance liquid chromatographic materials studied by solid-state NMR spectrometry

The distribution of silane chains over the silica gel surface in reversed-phase high-performance liq. chromatog. (RP-HPLC) phases was studied with special attention being paid to surface homogeneity: there might be areas with high coverage and areas with low coverage of silane chains, hence clustering or patching of the silane chains can occur. Two RP phases were studied before and after well conditioned aging, together with 4 silylated silica gels (serving as models). Two solid-state NMR techniques (e.g.,1H-29Si dipolar dephasing 29Si cross-polarization magic angle spinning NMR and 13C spin-lattice relaxation in the rotating frame) were used. For the 4 model compds. with varying degrees of coverage, only differences in the NMR time consts. were obsd. between the maximally covered phase and the 3 less densely covered silica gels. This proves that silane chains on an RP phase with max. coverage are restricted in their mobilities with respect to the less densely packed materials. For the 2 non-aged RP phases, the silane chains are probably homogeneously distributed over the silica gel surface. Further, the non-aged RP phases were compared with their counterparts, aged under well defined exptl. conditions. After aging, no differences were found between the original and the aged phases, now indicating however, that patching had developed upon agein

PERC rule to exclude the diagnosis of pulmonary embolism in emergency low-risk patients: study protocol for the PROPER randomized controlled study.

BACKGROUND: The diagnosis of Pulmonary Embolism (PE) in the emergency department (ED) is crucial. As emergency physicians fear missing this potential life-threatening condition, PE tends to be over-investigated, exposing patients to unnecessary risks and uncertain benefit in terms of outcome. The Pulmonary Embolism Rule-out Criteria (PERC) is an eight-item block of clinical criteria that can identify patients who can safely be discharged from the ED without further investigation for PE. The endorsement of this rule could markedly reduce the number of irradiative imaging studies, ED length of stay, and rate of adverse events resulting from both diagnostic and therapeutic interventions. Several retrospective and prospective studies have shown the safety and benefits of the PERC rule for PE diagnosis in low-risk patients, but the validity of this rule is still controversial. We hypothesize that in European patients with a low gestalt clinical probability and who are PERC-negative, PE can be safely ruled out and the patient discharged without further testing. METHODS/DESIGN: This is a controlled, cluster randomized trial, in 15 centers in France. Each center will be randomized for the sequence of intervention periods: a 6-month intervention period (PERC-based strategy) followed by a 6-month control period (usual care), or in reverse order, with 2 months of "wash-out" between the 2 periods. Adult patients presenting to the ED with a suspicion of PE and a low pre test probability estimated by clinical gestalt will be eligible. The primary outcome is the percentage of failure resulting from the diagnostic strategy, defined as diagnosed venous thromboembolic events at 3-month follow-up, among patients for whom PE has been initially ruled out. DISCUSSION: The PERC rule has the potential to decrease the number of irradiative imaging studies in the ED, and is reported to be safe. However, no randomized study has ever validated the safety of PERC. Furthermore, some studies have challenged the safety of a PERC-based strategy to rule-out PE, especially in Europe where the prevalence of PE diagnosed in the ED is high. The PROPER study should provide high-quality evidence to settle this issue. If it confirms the safety of the PERC rule, physicians will be able to reduce the number of investigations, associated subsequent adverse events, costs, and ED length of stay for patients with a low clinical probability of PE. TRIAL REGISTRATION: NCT02375919