Collateral and Debt Maturity Choice. A Signaling Model

This paper derives optimal loan policies under asymmetric information where banks offer loan contracts of long and short duration, backed or unbacked with collateral. The main novelty of the paper is that it analyzes a setting in which high quality firms use collateral as a complementary device along with debt maturity to signal their superiority. The least-cost signaling equilibrium depends on the relative costs of the signaling devices, the difference in firm quality and the proportion of good firms in the market. Model simulations suggest a non-monotonic relationship between firm quality and debt maturity, in which high quality firms have both long-term secured debt and short-term secured or non-secured debt.

The opposites task: Using general rules to test cognitive flexibility in preschoolers

A brief narrative description of the journal article, document, or resource. Executive functions play an important role in cognitive development, and during the preschool years especially, children's performance is limited in tasks that demand flexibility in their behavior. We asked whether preschoolers would exhibit limitations when they are required to apply a general rule in the context of novel stimuli on every trial (the "opposites" task). Two types of inhibitory processing were measured: response interference (resistance to interference from a competing response) and proactive interference (resistance to interference from a previously relevant rule). Group data show 3-year-olds have difficulty inhibiting prepotent tendencies under these conditions, whereas 5-year-olds' accuracy is near ceiling in the task. (Contains 4 footnotes and 1 table.

The interferon-induced exonuclease ISG20 exerts antiviral activity through upregulation of type I interferon response proteins

The host immune responses to infection lead to the production of type I interferon (IFN), and the upregulation of interferon-stimulated genes (ISGs) reduces virus replication and virus dissemination within a host. Ectopic expression of the interferon-induced 20-kDa exonuclease ISG20 suppressed replication of chikungunya virus and Venezuelan equine encephalitis virus, two mosquito-vectored RNA alphaviruses. Since the replication of alphavirus genomes occurs exclusively in the cytoplasm, the mechanism of nucleus-localized ISG20 inhibition of replication is unclear. In this study, we determined that ISG20 acts as a master regulator of over 100 genes, many of which are ISGs. Specifically, ISG20 upregulated IFIT1 genes and inhibited translation of the alphavirus genome. Furthermore, IFIT1-sensitive alphavirus replication was increased in Isg20−/− mice compared to the replication of wild-type viruses but not in cells ectopically expressing ISG20. We propose that ISG20 acts as an indirect regulator of RNA virus replication in the cytoplasm through the upregulation of many other ISGs.Type I interferon (IFN)-stimulated genes (ISGs) have critical roles in inhibiting virus replication and dissemination. Despite advances in understanding the molecular basis of ISG restriction, the antiviral mechanisms of many remain unclear. The 20-kDa ISG ISG20 is a nuclear 3′–5′ exonuclease with preference for single-stranded RNA (ssRNA) and has been implicated in the IFN-mediated restriction of several RNA viruses. Although the exonuclease activity of ISG20 has been shown to degrade viral RNA in vitro, evidence has yet to be presented that virus inhibition in cells requires this activity. Here, we utilized a combination of an inducible, ectopic expression system and newly generated Isg20−/− mice to investigate mechanisms and consequences of ISG20-mediated restriction. Ectopically expressed ISG20 localized primarily to Cajal bodies in the nucleus and restricted replication of chikungunya and Venezuelan equine encephalitis viruses. Although restriction by ISG20 was associated with inhibition of translation of infecting genomic RNA, degradation of viral RNAs was not observed. Instead, translation inhibition of viral RNA was associated with ISG20-induced upregulation of over 100 other genes, many of which encode known antiviral effectors. ISG20 modulated the production of IFIT1, an ISG that suppresses translation of alphavirus RNAs. Consistent with this observation, the pathogenicity of IFIT1-sensitive alphaviruses was increased in Isg20−/− mice compared to that of wild-type viruses but not in cells ectopically expressing ISG20. Our findings establish an indirect role for ISG20 in the early restriction of RNA virus replication by regulating expression of other ISGs that inhibit translation and possibly other activities in the replication cycle

Optically Selected BL Lacertae Candidates from the Sloan Digital Sky Survey Data Release Seven

We present a sample of 723 optically selected BL Lac candidates from the SDSS DR7 spectroscopic database encompassing 8250 deg^2 of sky; our sample constitutes one of the largest uniform BL Lac samples yet derived. Each BL Lac candidate has a high-quality SDSS spectrum from which we determine spectroscopic redshifts for ~60% of the objects. Redshift lower limits are estimated for the remaining objects utilizing the lack of host galaxy flux contamination in their optical spectra; we find that objects lacking spectroscopic redshifts are likely at systematically higher redshifts. Approximately 80% of our BL Lac candidates match to a radio source in FIRST/NVSS, and ~40% match to a ROSAT X-ray source. The homogeneous multiwavelength coverage allows subdivision of the sample into 637 radio-loud BL Lac candidates and 86 weak-featured radio-quiet objects. The radio-loud objects broadly support the standard paradigm unifying BL Lac objects with beamed radio galaxies. We propose that the majority of the radio-quiet objects may be lower-redshift (z<2.2) analogs to high-redshift weak line quasars (i.e., AGN with unusually anemic broad emission line regions). These would constitute the largest sample of such objects, being of similar size and complementary in redshift to the samples of high-redshift weak line quasars previously discovered by the SDSS. However, some fraction of the weak-featured radio-quiet objects may instead populate a rare and extreme radio-weak tail of the much larger radio-loud BL Lac population. Serendipitous discoveries of unusual white dwarfs, high-redshift weak line quasars, and broad absorption line quasars with extreme continuum dropoffs blueward of rest-frame 2800 Angstroms are also briefly described.Comment: 24 pages, 14 figures, 8 tables. Accepted for publication in A

Consumer credit information systems: A critical review of the literature. Too little attention paid by lawyers?

This paper reviews the existing literature on consumer credit reporting, the most extensively used instrument to overcome information asymmetry and adverse selection problems in credit markets. Despite the copious literature in economics and some research in regulatory policy, the legal community has paid almost no attention to the legal framework of consumer credit information systems, especially within the context of the European Union. Studies on the topic, however, seem particularly relevant in view of the establishment of a single market for consumer credit. This article ultimately calls for further legal research to address consumer protection concerns and inform future legislation

Supply driven mortgage choice

Variable mortgage contracts dominate the UK mortgage market (Miles, 2004). The dominance of the variable rate mortgage contracts has important consequences for the transmission mechanism of monetary policy decisions and systemic risks (Khandani et al., 2012; Fuster and Vickery, 2013). This raises an obvious concern that a mortgage market such as that in the UK, where the major proportion of mortgage debt is either at a variable or fixed for less than two years rate (Badarinza, et al., 2013; CML, 2012), is vulnerable to alterations in the interest rate regime. Theoretically, mortgage choice is determined by demand and supply factors. So far, most of the existing literature has focused on the demand side perspective, and what is limited is consideration of supply side factors in empirical investigation on mortgage choice decisions. This paper uniquely explores whether supply side factors may partially explain observed/ex-post mortgage type decisions. Empirical results detect that lenders’ profit motives and mortgage funding/pricing issues may have assisted in preferences toward variable rate contracts. Securitisation is found to positively impact upon gross mortgage lending volumes while negatively impacting upon the share of variable lending flows. This shows that an increase in securitisation not only improves liquidity in the supply of mortgage funds, but also has the potential to shift mortgage choices toward fixed mortgage debt. The policy implications may involve a number of measures, including reconsideration of the capital requirements for the fixed, as opposed to the variable rate mortgage debt, growing securitisation and optimisation of the mortgage pricing policies