Human resources needs in the evolving financial sector

As banks, securities houses, and insurance companies offer increasingly similar services, how have their human resource needs changed? An analysis of survey data reveals that all three industries have come to rely more heavily on high-skilled labor; however, the educational and occupational profiles of their workforces have not become substantially more alike.Human capital ; Financial institutions ; Employees, Training of ; Job analysis

Historical patterns and recent changes in the relationship between bank holding company size and risk

What is the relationship between a bank holding company's size and the risk it takes? The authors find that although the level of risk at large and small bank holding companies has not differed significantly, important distinctions exist in the nature of that risk. Historically, large companies' diversification advantages were offset by lower capital ratios and the pursuit of risk-enhancing activities. More recently, however, differences between the capital ratios and activities of large and small companies have narrowed. As a result, an inverse relationship between risk and bank holding company size has begun to emerge.Bank capital ; Bank holding companies ; Bank size

Banks with something to lose: the disciplinary role of franchise value

As protectors of the safety and soundness of the banking system, banking supervisors are responsible for keeping banks' risk taking in check. The authors explain that franchise value--the present value of the stream of profits that a firm is expected to earn as a going concern--makes the supervisor's job easier by reducing banks' incentives to take risks. The authors explore the relationship between franchise value and risk taking from 1986 to 1994 using both balance-sheet data and stock returns. They find that banks with high franchise value operate more safely than those with low franchise value. In particular, high-franchise-value banks hold more capital and take on less portfolio risk, primarily by diversifying their lending activities.Bank holding companies ; Bank management ; Retail trade

Securitization, loan sales, and the credit slowdown

Household and business lending has slowed sharply in recent years, but the anemic growth in loans booked at depository institutions, mortgage companies, and finance companies may overstate the decline in credit originated by these institutions. This article reports measures of credit growth that include "off-balance-sheet lending"—loans that were originated by intermediaries but are absent from their balance sheets because of direct loan sales or the issuance of asset-backed securities. The authors also compare the relative volume of off-balance-sheet lending by types of intermediaries.Asset-backed financing ; Credit ; Bank loans

A Political Economy of Privatization Contracts : The Case of Water and Sanitation in Ghana and Argentina

This document is the Accepted Manuscript version of the following article: Hulya Dagdeviren, Simon A. Robertson, 'A Political Economy of Privatization Contracts: The Case of Water and Sanitation in Ghana and Argentina', Competition & Change, Vol. 18 (2): 150-163, April 2014. The final, published version is available online at DOI: https://doi.org/10.1179/1024529414Z.00000000053. Published by SAGE.In general, the process and outcomes of privatization have been studied from the point of view of efficiency. In this article, we consider issues in the course of contract design, implementation, management and enforcement in privatized public services and utilities. The study is based on two case studies, involving several water concessions in Argentina and a management contract in the urban water sector in Ghana. Three key arguments are presented on the basis of these case studies. The first is that an individualistic analytical framework is often utilized by the mainstream economic perspectives, but these are inadequate for a comparative assessment of private versus public provision in public services where there are distinct collective or group interests and hence a wider socio-economic context and representation of different interests becomes highly important. Instead, the article proposes a political economy perspective, which pays due attention to distributional issues, group interests, ideology of states and power relations for the assessment of privatization contracts. Second, the administrative capacity of states and their resources play a key role for the outcomes of privatization. Finally, while some contractual issues could be resolved through resourcing and experience over time, others are inherent to the contractual relations with little prospect of remedy.Peer reviewe

The theory of international business: the role of economic models

This paper reviews the scope for economic modelling in international business studies. It argues for multi-level theory based on classic internalisation theory. It present a systems approach that encompasses both firm-level and industry-level analysis

Copyright and brands in the digital age: Internalizing the externalities of meaning

Article first published online: 5 DEC 2011CERNA WORKING PAPER SERIES 2010-11International audienceThe adoption of binary code as the universal standard for globalized communications generates highly positive externalities often referred to as network effects. But what about meaning? What are the externalities associated with the formatting and circulation of meaning, and are they, too,all positive? Within the digital paradigm, is it really possible to separate the notion of expression -- covered by copyright -- from the meanings it creates? Isn't meaning heavily dependent on the concept of brand? And if so, how do copyright and trademark institutions work together to stimulate and promote meaningful information? To answer these questions, we will look at how the meaningful forms of expression -- the works -- that have historically been covered by copyright generate specific types of externality, both positive and negative, giving rise to both incentive and censorship mechanisms. We will then show how the institutions of copyright and author's rights that allow the appropriation of a meaningful good also confer a brand on it, identifying its sources. This leads to mixed externalities from both directions, with the result that copyright and trademark institutions cannot be fully separated from each other

2003 Manifesto on the California Electricity Crisis

The authors, an ad-hocgroup of professionals with experience in regulatory and energy economics, share a common concern with the continuing turmoil facing the electricity industry ("the industry") in California. Most ofthe authorsendorsed the first California Electricity Manifesto issued on January 25, 2001. Almost two years have passed since that first Manifesto. While wholesale electric prices have moderated and California no longer faces the risk of blackouts, in many ways the industry is in worse shape now than it was at the start of 2001. As a result, the group of signatories continues to have a deep concern with the conflicting policy directions being pursued for the industry at both the State and Federal levels of government and the impact the uncertainties associated with these conflicting policies will have, long term, on the economy of California. Theauthorshave once again convened under the auspices of the Institute of Management, Innovation and Organization at the University of California, Berkeley, to put forward ourtheir ideas on a basic set of necessary policies to move the industry forward for the benefit of all Californians and the nation. The authors point out that theydo not pretend to be "representative." They do bring, however, a very diverse range of backgrounds and expertise.Technology and Industry, Regulatory Reform

Regulating financial conglomerates

We investigate the optimal regulation of financial conglomerates which combine a bank and a non-bank financial institution. The conglomerate’s risk-taking incentives depend upon the level of market discipline it faces, which in turn is determined by the conglomerate’s liability structure. We examine optimal capital requirements for stand-alone institutions, for integrated financial conglomerates, and for financial conglomerates that are structured as holding companies. For a given risk profile, integrated conglomerates have a lower probability of failure than either their stand-alone or decentralized equivalent. However, when risk profiles are endogenously selected, conglomeration may extend the reach of the deposit insurance safety net and hence provide incentives for increased risk-taking. As a result, integrated conglomerates may optimally attract higher capital requirements. In contrast, decentralised conglomerates are able to hold assets in the socially most efficient place. Their optimal capital requirements encourage this. Hence, the practice of “regulatory arbitrage”, or of transferring assets from one balance sheet to another, is welfare-increasing. We discuss the policy implications of our finding in the context not only of the present debate on the regulation of financial conglomerates but also in the light of existing US bank holding company regulation

Sponsor ownership in Asian REITs

This study examines the relationship between sponsor ownership and firm performance proxied by firm value, operating cash flow, and dividend policy with Asian real estate investment trusts (REITs) in Japan, Hong Kong, Malaysia, and Singapore for the period from 2002 to 2012, focusing on both the incentive alignment effect and the entrenchment effect. Our study sheds new light on effective corporate governance for Asian REITs that are prone to agency problems. Such agency problems arise from the inequitable distribution of power to sponsors that results from the external management structure. The findings suggest that larger sponsor ownership aligns the interests of sponsors and minority shareholders and enhances the performance of Asian REITs, while such an effect diminishes as sponsors become more entrenched. We find that the incentive alignment effect and entrenchment effect are primarily driven by developer-sponsored REITs. Also evident is that the presence of institutional investors mitigates agency problems and increases firm performance