Schwinger--Dyson BRST symmetry and the Batalin--Vilkovisky Lagrangian Quantisation of Gauge Theories with Open or Reducible Gauge Algebras

In this short note we extend the results of Alfaro and Damgaard on the origin of antifields to theories with a gauge algebra that is open or reducible.Comment: 10p, CERN-TH-6858/93, KUL-TF-93/1

Back to Basics in Banking? A Micro-Analysis of Banking System Stability

This paper analyzes the relationship between banks’ divergent strategies toward specialization and diversification of financial activities and their ability to withstand a banking sector crash. We first generate market-based measures of banks’ systemic risk exposures using extreme value analysis. Systemic banking risk is measured as the tail beta, which equals the probability of a sharp decline in a bank’s stock price conditional on a crash in a banking index. Subsequently, the impact of (the correlation between) interest income and the components of non-interest income on this risk measure is assessed. The heterogeneity in extreme bank risk is attributed to differences in the scope of non-traditional banking activities: non-interest generating activities increase banks’ tail beta. In addition, smaller banks and better-capitalized banks are better able to withstand extremely adverse conditions. These relationships are stronger during turbulent times compared to normal economic conditions. Overall, diversifying financial activities under one umbrella institution does not improve banking system stability, which may explain why financial conglomerates trade at a discount.diversification;non-interest income;financial conglomerates;banking stability;extreme value analysis;tail risk

Back to the basics in banking ? A micro-analysis of banking system stability

This paper analyzes the relationship between banks’ divergent strategies toward specialization and diversification of financial activities and their ability to withstand a banking sector crash. We first generate market-based measures of banks’ systemic risk exposures using extreme value analysis. Systemic banking risk is measured as the tail beta, which equals the probability of a sharp decline in a bank’s stock price conditional on a crash in a banking index. Subsequently, the impact of (the correlation between) interest income and the components of non-interest income on this risk measure is assessed. The heterogeneity in extreme bank risk is attributed to differences in the scope of non-traditional banking activities: non-interest generating activities increase banks’ tail beta. In addition, smaller banks and better-capitalized banks are better able to withstand extremely adverse conditions. These relationships are stronger during turbulent times compared to normal economic conditions. Overall, diversifying financial activities under one umbrella institution does not improve banking system stability, which may explain why financial conglomerates trade at a discountdiversification, non-interest income, financial conglomerates, banking stability, extreme value analysis, tail risk

Sp(2)-Symmetric Lagrangian BRST Quantization

One Lagrangian BRST quantization principle is that of imposing correct Schwinger-Dyson equations through the BRST Ward identities. In this paper we show how to derive the analogous $Sp(2)$-symmetric quantization condition in flat coordinates from an underlying $Sp(2)$-symmetric Schwinger-Dyson BRST symmetry. We also show under what conditions this can be recast in the language of triplectic quantization.Comment: LaTeX, 19 page

BRST Gauge Fixing and Regularization

In the presence of consistent regulators, the standard procedure of BRST gauge fixing (or moving from one gauge to another) can require non-trivial modifications. These modifications occur at the quantum level, and gauges exist which are only well-defined when quantum mechanical modifications are correctly taken into account. We illustrate how this phenomenon manifests itself in the solvable case of two-dimensional bosonization in the path-integral formalism. As a by-product, we show how to derive smooth bosonization in Batalin-Vilkovisky Lagrangian BRST quantization.Comment: LaTeX, 12 page

Corporate Governance, Opaque Bank Activities, and Risk/Return Efficiency: Pre- and Post-Crisis Evidence from Turkey

Does better corporate governance unambiguously improve the risk/return efficiency of banks? Or does either a re-orientation of banks' revenue mix towards more opaque products, an economic downturn, or tighter supervision create off-setting or reinforcing effects? The authors relate bank efficiency to shortfalls from a stochastic risk/return frontier. They analyze how internal governance mechanisms (CEO duality, board experience, political connections, and education profile) and external governance mechanisms (discipline exerted by shareholders, depositors, or skilled employees) determine efficiency in a sample of Turkish banks. The 2000 financial crisis was a wakeup call for bank efficiency and corporate governance. As a result, better corporate governance mechanisms have been able to improve risk/return efficiency when the economic, regulatory, and supervisory environments are more stable and bank products are more complex.corporate governance;bank risk;noninterest income;crisis;frontier