Exact energy stability of B\'enard-Marangoni convection at infinite Prandtl number

Using the energy method we investigate the stability of pure conduction in Pearson's model for B\'enard-Marangoni convection in a layer of fluid at infinite Prandtl number. Upon extending the space of admissible perturbations to the conductive state, we find an exact solution to the energy stability variational problem for a range of thermal boundary conditions describing perfectly conducting, imperfectly conducting, and insulating boundaries. Our analysis extends and improves previous results, and shows that with the energy method global stability can be proven up to the linear instability threshold only when the top and bottom boundaries of the fluid layer are insulating. Contrary to the well-known Rayleigh-B\'enard convection setup, therefore, energy stability theory does not exclude the possibility of subcritical instabilities against finite-amplitude perturbations.Comment: 11 pages, 2 figures. Preprint submitted to the Journal of Fluid Mechanics. Version 2: minor text and notational changes, added a new appendix A, added detail to Section

Bank capital and loan loss reserves under Basel II - implications for emerging countries

The authors propose an integrated approach to minimum bank capital, and loan loss reserves regulation. They break new ground in two main areas. First, the authors provide an explicit measurement of the credit loss distribution for a sample of emerging countries, providing a benchmark for discussing the appropriate calibration of new regulatory capital, and loan loss provision requirements for non-G10 countries. Second, on normative grounds, they propose a simplified version of the"internal rating based"(IRB) approach as a transition tool that, while retaining a risk-based definition of solvency ratios, implies reduced supervisory monitoring costs, and could therefore be of interest to emerging countries, where supervisory resources are particularly scarce.Payment Systems&Infrastructure,Banking Law,Financial Intermediation,Banks&Banking Reform,Insurance&Risk Mitigation,Financial Intermediation,International Terrorism&Counterterrorism,Banks&Banking Reform,Banking Law,Insurance&Risk Mitigation

Investigating the construction methods of an opus vermiculatum mosaic panel

From the third century BC to the second century AD small detailed central panels (emblemata) made using the opus vermiculatum technique were used as focal points in larger mosaic pavements. They were custom made in stone or terracotta trays to facilitate their transport and placement. Although mosaic panels in opus vermiculatum have been discovered throughout the Hellenistic and Roman Mediterranean, the location of the workshops specialising in the production of the finely worked panels is still unclear. Their association with named artists, for example Dioskourides of Samos, and the locations of finds (such as the fragments of the floor by Hephaistion at Pergamon) point to workshops in the eastern Mediterranean. A large unidentified fragment of an emblema, still in its terracotta tray, from the collections of the Department of Greece and Rome in the British Museum was the subject of analytical examination. These investigations of the tesserae (glass cubes), traces of pigments and mortar aimed to determine the raw materials and manufacturing processes for the mosaic and to characterise the nature of the application of paint to the mortar. Egyptian blue pigment and traces of hematite and carbon suggest that a fully coloured drawing was executed on the fresh mortar to guide the positioning of the tesserae. In addition, samples from the terracotta tray were taken in an attempt to identify its provenance. This contribution describes how the results of these investigations have been used to provide a deeper understanding of opus vermiculatum construction methods

Dynamic Controllability with Overlapping targets: A Generalization of the Tinbergen-Nash Theory of Economic Policy

We generalize some recent results developed in static policy games with multiple players, to a dynamic context. We find that the classical theory of economic policy can be usefully applied to a strategic context of difference games: if one player satisfies the Golden Rule, then either all other players’ policies are ineffective with respect to the dynamic target variables shared with that player; or no Nash Feedback Equilibrium can exist, unless they all share target values for those variables. We extend those results to the case where there are also non-dynamic targets, to show that policy effectiveness (a Nash equilibrium) can continue to exist if some players satisfy the Golden Rule but target values differ between players in the non-dynamic targets. We demonstrate the practical importance of these results by showing how policy effectiveness (a policy equilibrium) can appear or disappear with small variations in the expectations process or policy rule in a widely used model of monetary policy.Policy games, Policy ineffectiveness, Static controllability, Existence of equilibria, Nash feedback equilibrium

Policy games, policy neutrality and Tinbergen controllability under rational expectations

This paper shows the relationship between static controllability (the well-known Tinbergen golden rule), and the existence and other properties of the Nash equilibrium in a dynamic setting with rational expectations for future behavior. We show how to determine the existence of equilibrium outcomes; the conditions under which no equilibrium exists; and who will get to dominate (or who will find their policies to have become ineffective) in those equilibria, without having to compute and enumerate all the possible equilibria directly.

Improving credit information, bank regulation, and supervision : on the role and design of public credit registries

The authors analyze how data in public credit registries can be used both to strengthen bank supervision and to improve the quality of credit analysis by financial institutions. Empirical tests using public credit registry (PCR) data were performed in collaboration with the central banks in Argentina, Brazil, and Mexico. The results of the empirical tests confirm the value of the data for credit risk evaluation and provide insights regarding its use in supervision, including in calculations of credit risk for capital and provisioning requirements, or as a check on a bank's internal ratings for the Basel II's internal rating-based approach. The authors also define a set of critical design parameters and use the results to comment on appropriate public registry design. Finally, they discuss the relationship between the different objectives of a PCR and how they influence the registry's design.Environmental Economics&Policies,Financial Intermediation,Payment Systems&Infrastructure,Banks&Banking Reform,Insurance&Risk Mitigation,Financial Intermediation,Environmental Economics&Policies,Insurance&Risk Mitigation,Banks&Banking Reform,Strategic Debt Management

On Endogenous Risk, the Amplification Effects of Financial Systems and Macro Prudential Policies

The recent global financial crisis has put the spotlight on macro-prudential policies to protect firms and households from problems emanating from the financial sector. This paper proposes an analytical framework that combines exogenous and endogenous risks, the latter seen as stemming from frictions in financial markets. Arguing that endogenous risks may be systemic and costly, the paper employs a database of emerging market corporate bond spreads and finds evidence that endogenous risks are present and have amplified the effects of financial crises. Larger financial systems are found to exacerbate the impact of crises, and weaker financial systems are found to exacerbate particularly the impact of banking crises. The results suggest that policymakers should monitor time-varying systemic risks using both price and quantity signals and take actions in good times to mitigate potential amplifying effects at times of stress