Conduct Risk: Meaning, Interpretation and Dissension

Following serious and widespread episodes of misconduct in the financial services industry, regulators, international standard-setting bodies and financial institutions worldwide have been discussing opportune approaches to deal with conduct risk. Identifying, analysing and tackling this risk have become the keywords to make financial firms take proactive steps against a common problem. Significantly, the way misconduct risk is understood will determine the ways for dealing with it properly. Given the incentives and guidelines that regulators and policymakers have so far provided within the conduct risk debate, it is natural to review their own review of such a risk. In practice, this paper addresses the question of whether their interpretation constitutes a solid, clear and consistent basis for financial institution proper understanding and management

Sales Culture and Misconduct in the Financial Services Industry: An Analysis of Cross-selling Practices

Over the past decade, a series of malpractice incidents in the financial services industry have shown that the risk of misconduct is not a theoretical possibility. Accordingly, the promotion and implementation of new ethics, values, and behaviours in banks and other financial institutions are primary objectives in the international regulatory agenda. Recent cases of mis-selling of financial products widened the scope of discussion towards financial firms’ sales practices. In particular, the widespread use of cross-selling techniques in the financial services industry caught regulatory attention, above all, among the European Supervisory Authorities. The ensuing debate was underpinned by the crucial question of how to guarantee a sustainable use of cross-selling by banks and financial institutions. This article addresses this question by analyzing cross-selling in relation to the specificities and risks posed by the financial services industry. Whilst it was possible to elaborate on regulatory solutions in relation to a distorted use of financial practices, such as securitization and interest rate benchmarks, now it is also desirable to discuss the optimal strategy to prevent cross-selling from being the ‘tool’ for financial misconduct. This is of significance given the recognized potential of misconduct cases to pose systemic threats to financial stability

The Behavioral Approach System and Augmenting/Reducing in auditory event-related potentials during emotional visual stimulation

In the recent Reinforcement Sensitivity Theory Personality Questionnaire (RST-PQ, Corr and Cooper, 2016) the behavioral approach system (BAS) has been conceptualized as multidimensional in which facets of reward interest and reactivity, and goal-drive persistence, are separate from impulsivity. Aim of the present work was to highlight the predictive power of BAS and its facets in differentiating electrocortical responses by using an auditory augmenting/reducing event-related potential (ERP) paradigm during emotional visual stimulation. ERPs were recorded for 5 levels of intensity in 39 women. The RST-PQ was used to measure the total BAS (T-BAS) and its four facets of Goal-Drive Persistence (GDP), Reward Interest (RI), Reward Reactivity (RR), and Impulsivity (IMP). T-BAS and RI, and to a less extent GDP and RR, were significantly associated with higher N1/P2 amplitudes at central sites (C3, Cz, C4) across neutral, positive and negative slides. Similar, but less pronounced relations were found for GDP and RR, but this relation was lacking for Imp facet. In addition, N1/P2 slope at central sites was positively correlated with T-BAS, GDP, RI, RR, but not Imp. Indeed, T-BAS facets failed to maintain a significant correlation with N1/P2 slope, after controlling for T-BAS residual scores, indicating that T-BAS drives these significant correlations. LORETA analysis at 219ms (P2 wave) from tone onset revealed a significant activation of the right inferior parietal lobule (IPL, BA40) and left anterior cingulate gyrus (BA32) in high T-BAS compared to low T-BAS participants. Results are discussed within a revised RST framework differentiating reward components from impulsivity

Reducing regulatory reliance on credit ratings to address investors’ over-reliance: some thoughts in light of the US experience

This is a pre-copyedited, author-produced version of an article accepted for publication in Capital Markets Law Journal following peer review. The version of record Francesco De Pascalis, Reducing regulatory reliance on credit ratings to address investors’ over-reliance: some thoughts in light of the US experience, Capital Markets Law Journal, Volume 11, Issue 4, October 2016, Pages 510–527 is available online at: https://doi.org/10.1093/cmlj/kmw020

Characterization of Composites Manufactured Through Reshaping of EoL Thermoplastic Polymers Reinforced with Recycled Carbon Fibers

This article investigates if and at what extent a recycling process based on grinding, melting and re-shaping of recycled carbon fibers reinforced thermoplastic polymers (rCFRPs) can affect their physical, mechanical and thermal properties. The aim is to establish if they can be taken into consideration in the manufacturing of new composite materials in different sectors: automotive, marine, sporting goods, etc. Composites materials were submitted to the measurement of the fibers length they are composed of, and then analyzed by means of tensile and impact tests and a dynamic mechanical analysis (DMA). All the characterizations were performed to both initial and recycled composites and, in some cases, they were replied also after the intermediate accelerated aging. Characterization performed confirmed that, as expected, the recycling process affects the properties of the composites, but in different manners and to a different extent when different polymers are involved. Tensile and impact tests pointed out that the polypropylene based composites showed a less stiff and a more brittle behaviour after the recycling process and the DMA confirmed this evidence, highlighting in addition a more viscous behavior of the polymer after the recycling. Conversely, the polyamide 6 based composites increased their stiffness and ductility after the recycling. For all the composites the tensile strength dropped, confirming the weakening of the materials

City watchdog finds no evidence for recent political ‘debanking’ – but private banks have been picky for centuries

Disclosure statement: The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.After a row over the closure of his bank account earlier this year, former politician Nigel Farage has hit out at the UK financial regulator for saying it has found no recent evidence of customers being “de-banked” over their personal views

Year-round variation in the isotopic niche of Scopoli's shearwater (Calonectris diomedea) breeding in contrasting sea regions of the Mediterranean Sea

Top marine predators are key components of marine food webs. Among them, long-distance migratory seabirds, which travel across different marine ecosystems over the year, may experience important year-round changes in terms of oceanographic conditions and availability of trophic resources. We tested whether this was the case in the Scopoli's shearwater (Calonectris diomedea), a trans-equatorial migrant and top predator, by sampling birds breeding in three environmentally different regions of the Mediterranean Sea. The analysis of positional data and stable isotopes (δ1³C and δ15N) of target feathers revealed that birds from the three regions were spatially segregated during the breeding period while they shared non-breeding areas in the Atlantic Ocean. Isotopic baseline levels of N and C (meso-zooplankton) were significantly different among marine regions during breeding. Such variation was reflected at the higher trophic levels of pelagic and demersal fish muscles as well as in shearwater feathers grown in the Mediterranean. δ15N- and δ13C-adjusted values of shearwaters were significantly different among populations suggesting that birds from different breeding areas relied on prey species from different trophic levels. Conversely, the non-breeding spatial and isotopic niches overlapped greatly among the three populations. Shearwater trophic niches during breeding were narrower and segregated compared to the non-breeding period, revealing a high plasticity in trophic resource use. Overall, this study highlights seasonal and region-specific use of trophic resources by Scopoli's shearwater, suggesting a broad trophic plasticity and possibly a high adaptability to environmental changes

Inter-individual differences in foraging tactics of a colonial raptor : consistency, weather effects, and fitness correlates

Background: Consistent inter-individual differences in behavioural phenotypes may entail differences in energy efficiency and expenditure, with different fitness payoffs. In colonial-breeding species, inter-individual differences in foraging behaviour may evolve to reduce resource use overlap among conspecifics exploiting shared foraging areas. Furthermore, individual differences in foraging behaviour may covary with individual characteristics, such as sex or physiological conditions. Methods: We investigated individual differences in foraging tactics of a colonial raptor, the lesser kestrel (Falco naumanni). We tracked foraging trips of breeding individuals using miniaturized biologgers. We classified behaviours from GPS data and identified tactics at the foraging trip level by cluster analysis. We then estimated energy expenditure associated to each tactic from tri-axial accelerometer data. Results: We obtained 489 foraging trips by 36 individuals. Two clusters of trips were identified, one (SF) characterized by more static foraging behaviour and the other (DF) by more dynamic foraging behaviour, with a higher proportion of flying activity and a higher energy expenditure compared to SF. Lesser kestrels showed consistent inter-individual differences in foraging tactics across weather condition gradients, favouring DF trips as solar radiation and crosswind intensity increased. DF trips were more frequent during the nestling-rearing than during the egg incubation stage. Nestlings whose tracked parent was more prone to perform DF trips experienced higher daily mass increase, irrespective of nestling feeding rates. Conclusions: Our study provided evidence that breeding lesser kestrels flexibly adopted different foraging tactics according to contingent weather landscapes, with birds showing consistent inter-individual differences in the tendency to adopt a given tactic. The positive correlation between the tendency to perform more energy-demanding DF trips and nestling growth suggests that individual differences in foraging behaviour may play a role in maintaining key life-history trade-offs between reproduction and self-maintenance