Banking deregulation in Europe

Banking deregulation Ernst Baltensperger and Jean Dermine Deregulation of financial services is well under way in many European countries. This has led to fears that economies are now more vulnerable to macroeconomic shocks. The authors focus on one aspect of financial deregulation, namely liberalization of the banking system. They show that measures such as the abolition of reserve requirements increase macroeconomic variability under some circumstances but reduce it under others. No general macroeconomic case can be made for banking regulation or for its liberalization. Analysis of microeconomic issues is more fruitful. Asymmetric information and the risks of contagion in a panic can lead to runs against the banking system. To the extent that these are socially inefficient, public intervention may be justified. This presumption is stronger since the risks of bank runs have grown recently with the increased maturity mismatch - the finance of illiquid loans by liquid short-term deposits. To meet this danger, the authors recommend regulation of deposit contracts whilst preserving incentives for bank monitoring by private parties. Specifically, they propose an ex post liability of current and former depositors when banks default, thereby offsetting the incentive to withdraw funds at the onset of a crisis. Being quick off the mark would no longer be sufficient, and sophisticated depositors would press for greater disclosure and fuller monitoring of bank activities. The authors also recommend that remaining controls on deposit interest rates should be scrapped and that supervision of international banking should be cooperatively conducted by host and parent authoritie

A Radial Velocity Study of Composite-Spectra Hot Subdwarf Stars with the Hobby-Eberly Telescope

Many hot subdwarf stars show composite spectral energy distributions indicative of cool main sequence companions. Binary population synthesis (BPS) models demonstrate such systems can be formed via Roche lobe overflow or common envelope evolution but disagree on whether the resulting orbital periods will be long (years) or short (days). Few studies have been carried out to assess the orbital parameters of these spectroscopic composite binaries; current observations suggest the periods are long. To help address this problem, we selected fifteen moderately-bright (V~13) hot subdwarfs with F-K dwarf companions and monitored their radial velocities (RVs) from January 2005 to July 2008 using the bench-mounted Medium Resolution Spectrograph on the Hobby-Eberly Telescope (HET). Here we describe the details of our observing, reduction, and analysis techniques and present preliminary results for all targets. By combining the HET data with recent observations from the Mercator telescope, we are able to calculate precise orbital solutions for three systems using more than 6 years of observations. We also present an up-to-date period histogram for all known hot subdwarf binaries, which suggests those with F-K main sequence companions tend to have orbital periods on the order of several years. Such long periods challenge the predictions of conventional BPS models, although a larger sample is needed for a thorough assessment of the models' predictive success. Lastly, one of our targets has an eccentric orbit, implying some composite-spectrum systems might have formerly been hierarchical triple systems, in which the inner binary merged to create the hot subdwarf.Comment: Published in The Astrophysical Journal, Volume 758, Issue 1, article id. 58 (2012). References updated and Equation (5) corrected. 12 pages, 5 figures, 5 table

Radiation pressure and pulsation effects on the Roche lobe

Several observational pieces of evidence indicate that specific evolutionary channels which involve Roche lobe overflow are not correctly accounted for by the classical Roche model. We generalize the concept of Roche lobe in the presence of extra forces (caused by radiation pressure or pulsations). By computing the distortion of the equipotential surfaces, we are able to evaluate the impact of these perturbing forces on the stability of Roche-lobe overflow (RLOF). Radiative forces are parametrized through the constant reduction factor that they impose on the gravitational force from the radiating star (neglecting any shielding in case of large optical thickness). Forces imparted by pulsations are derived from the velocity profile of the wind that they trigger. We provide analytical expressions to compute the generalized Roche radius. Depending on the extra force, the Roche-lobe radius may either stay unchanged, become smaller, or even become meaningless (in the presence of a radiatively- or pulsation-driven wind). There is little impact on the RLOF stability.Comment: 11 pages, 13 Postscript figure

European Banking with a Single Currency

At the Madrid summit in December 1995, the EU heads of state or government endorsed a three-phase plan for the introduction of the single currency. The purpose of the paper is to identify how, besides an obvious fall in revenue from intra-European currencies trading, a single currency will alter fundamentally and permanently European banking markets. A common currency will likely change the sources of competitive advantage in various markets such as those of government bonds and their fast growing appendices the interest rate derivative markets, of corporate bonds and equities, of foreign exchange, and of fund management. The benefits derived from the creation of a leading international currency are discussed, and the impact of a single currency on credit risk is evaluated. This paper was presented at the Financial Institutions Center's October 1996 conference on "

Hybrid Governance Structures and Monetary Policy: The Legal and Institutional Position of National Central Banks in the Eurosystem

National central banks (NCBs) are an integral part of the European System of Central Banks (ESCB) - a highly integrated system which comprises the ECB and NCBs, and is in charge of monetary policy in the Union. Various (primary) EU law provisions partly Europeanize NCBs, while also preserving their national embeddedness. This article explores the evolving legal and institutional position of the NCBs in the ESCB and the Eurosystem. The NCBs' hybrid status has proven fertile ground for tensions and has given rise to both centrifugal and centripetal forces in the Eurosystem. The discussion begins with the legal and institutional position of NCBs as established in Maastricht. The focus then shifts to centrifugal forces in the Eurosystem. NCBs can be confronted with conflicting loyalties and duties, which can compromise the singleness and effectiveness of monetary policy. We then turn to consider the emergence of centripetal forces in light of the recent case law of the EU Courts, which, together with the ECB's actions, has brought about a Europeanization of various aspects of the NCBs' organization and powers. The penultimate section considers the implications of the NCBs' institutional repositioning for their independence and accountability. Centripetal pressures can contribute to reinforcing the NCBs' independence vis-à-vis domestic political authorities and to reducing opportunities for accountability at the national level, which are only partly made up for at the EU level. The concluding section considers whether the developments adumbrated above consecrate a highly Europeanized, agent-like vision of NCBs