The Volcker Rule: A Legal Analysis

This report provides an introduction to the Volcker Rule, which is the regulatory regime imposed upon banking institutions and their affiliates under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (P.L. 111-203). The Volker Rule is designed to prohibit “banking entities” from engaging in all forms of “proprietary trading” (i.e., making investments for their own “trading accounts”)—activities that former Federal Reserve Chairman Paul A. Volcker often condemned as contrary to conventional banking practices and a potential risk to financial stability. The statutory language provides only general outlines of prohibited activities and exceptions. Through it, however, Congress has empowered five federal financial regulators with authority to conduct coordinated rulemakings to fill in the details and complete the difficult task of crafting regulations to identify prohibited activities, while continuing to permit activities considered essential to the safety and soundness of banking institutions or to the maintenance of strong capital markets. In December 2014, more than two years after enactment of the law, coordinated implementing regulations were issued by the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC). The Rule is premised on a two-pronged central core restricting activities by “banking entities”—a term that includes all FDIC-insured bank and thrift institutions; all bank, thrift, or financial holding companies; all foreign banking operations with certain types of presence in the United States; and all affiliates and subsidiaries of any of these entities. Specifically, the Rule broadly prohibits banking entities from engaging in “proprietary trading” and from making investments in or having relationships with hedge and similar “covered funds” that are exempt from registering with the CFTC as commodity pool operators or with the SEC under the Investment Advisors Act. The Rule couples its broad prohibitions with numerous exclusions and by designating myriad activities as permissible so long as various terms and conditions are met, unless they otherwise would involve or result in a material conflict of interest; a material exposure to high-risk assets or high-risk trading strategies; pose a threat to the safety and soundness of the banking entity; or pose a threat to the financial stability of the United States. The exceptions to the ban on proprietary trading include underwriting by securities underwriters; market-making “designed not to exceed the reasonably expected near term demands of clients”; trading in government securities; fiduciary activities; insurance company portfolio investments; and risk-mitigating hedging activities. The ban on investing in and owning “covered funds” exempts certain types of funds, under specified conditions, and permits de minimis investment in any such fund up to 3% of the outstanding ownership interests of the fund with an aggregate cap on the total ownership interest in “covered funds” of 3% of the banking entity’s core capital. To prevent evasion, the Rule has extensive requirements mandating comprehensive compliance programs that include ongoing management involvement, precise metrics measuring risk assessment, verification and documentation of any activities conducted under one of the Rule’s exceptions or exclusions, and recurring reports and assessments. Full compliance is required by July 21, 2015, subject to the possibility that further extensions may be provided by the regulators. In the case of investments involving “illiquid funds” subject to contractual provisions seriously impacting their marketability or sale, full divestiture might not be required until July 21, 2022

The direct simulation of high-speed mixing-layers without and with chemical heat release

A direct numerical simulation of high speed reacting and non-reacting flows for H2-air systems is presented. The calculations are made for a convective Mach number of 0.38 with hyperbolic tangent initial profile and finite rate chemical reactions. A higher-order numerical method is used in time accurate mode to time advance the solution to a statistical steady state. About 600 time slices of all the variables are then stored for statistical analysis. It is shown that most of the problems of high-speed combustion with air are characterized by relatively weak heat release. The present study shows that: (1) the convective speed is reduced by heat release by about 10 percent at this convective Mach number M(sub c) = 0.38; (2) the variation of the mean and rms fluctuation of temperature can be explained on the basis of temperature fluctuation between the flame temperature and the ambient; (3) the growth rate with heat release is reduced by 7 percent; and (4) the entrainment is reduced by 25 percent with heat release. These differences are small in comparison with incompressible flow dynamics, and are argued to be due to the reduced importance of heat release in comparison with the large enthalpy gradients resulting from the large-scale vortex dynamics. It is finally suggested that the problems of reduced mixing in high-speed flows are not severely complicated by heat release

Technology utilization in a non-urban region - A measurement of the impact of the Technology Use Studies Center Final report

Technology utilization in agricultural areas and measurement of impact of technology use studies cente

Growth mechanisms of perturbations in boundary layers over a compliant wall

The temporal modal and nonmodal growth of three-dimensional perturbations in the boundary-layer flow over an infinite compliant flat wall is considered. Using a wall-normal velocity/wall-normal vorticity formalism, the dynamic boundary condition at the compliant wall admits a linear dependence on the eigenvalue parameter, as compared to a quadratic one in the canonical formulation of the problem. This greatly simplifies the accurate calculation of the continuous spectrum by means of a spectral method, thereby yielding a very effective filtering of the pseudospectra as well as a clear identification of instability regions. The regime of global instability is found to be matching the regime of the favorable phase of the forcing by the flow on the compliant wall so as to enhance the amplitude of the wall. An energy-budget analysis for the least-decaying hydroelastic (static-divergence, traveling-wave-flutter and near-stationary transitional) and Tollmien--Schlichting modes in the parameter space reveals the primary routes of energy flow. Moreover, the flow exhibits a slower transient growth for the maximum growth rate of a superposition of streamwise-independent modes due to a complex dependence of the wall-boundary condition with the Reynolds number. The initial and optimal perturbations are compared with the boundary-layer flow over a solid wall; differences and similarities are discussed. Unlike the solid-wall case, viscosity plays a pivotal role in the transient growth. A slowdown of the maximum growth rate with the Reynolds number is uncovered and found to originate in the transition of the fluid-solid interaction from a two-way to a one-way coupling. Finally, a term-by-term energy budget analysis is performed to identify the key contributors to the transient growth mechanism

Revealing the pure confinement effect in glass-forming liquids by dynamic mechanical analysis

Many molecular glass forming liquids show a shift of the glass transition Tg to lower temperatures when the liquid is confined into mesoporous host matrices. Two contrary explanations for this effect are given in literature: First, confinement induced acceleration of the dynamics of the molecules leads to an effective downshift of Tg increasing with decreasing pore size. Secondly, due to thermal mismatch between the liquid and the surrounding host matrix, negative pressure develops inside the pores with decreasing temperature, which also shifts Tg to lower temperatures. Here we present novel dynamic mechanical analysis measurements of the glass forming liquid salol in Vycor and Gelsil with pore sizes of d = 2.6, 5.0 and 7.5 nm. The dynamic complex elastic susceptibility data can be consistently described with the assumption of two relaxation processes inside the pores: A surface induced slowed down relaxation due to interaction with rough pore interfaces and a second relaxation within the core of the pores. This core relaxation time is reduced with decreasing pore size d, leading to a downshift of Tg in perfect agreement with recent DSC measurements

Tungsten resonance integrals and Doppler coefficients First quarterly progress report, Jul. - Sep. 1965

Resonance integrals and Doppler coefficients of samples of natural tungsten, tungsten isotopes, and uranium oxide tungsten fue

Recognition of 3-D Objects from Multiple 2-D Views by a Self-Organizing Neural Architecture

The recognition of 3-D objects from sequences of their 2-D views is modeled by a neural architecture, called VIEWNET that uses View Information Encoded With NETworks. VIEWNET illustrates how several types of noise and varialbility in image data can be progressively removed while incornplcte image features are restored and invariant features are discovered using an appropriately designed cascade of processing stages. VIEWNET first processes 2-D views of 3-D objects using the CORT-X 2 filter, which discounts the illuminant, regularizes and completes figural boundaries, and removes noise from the images. Boundary regularization and cornpletion are achieved by the same mechanisms that suppress image noise. A log-polar transform is taken with respect to the centroid of the resulting figure and then re-centered to achieve 2-D scale and rotation invariance. The invariant images are coarse coded to further reduce noise, reduce foreshortening effects, and increase generalization. These compressed codes are input into a supervised learning system based on the fuzzy ARTMAP algorithm. Recognition categories of 2-D views are learned before evidence from sequences of 2-D view categories is accumulated to improve object recognition. Recognition is studied with noisy and clean images using slow and fast learning. VIEWNET is demonstrated on an MIT Lincoln Laboratory database of 2-D views of jet aircraft with and without additive noise. A recognition rate of 90% is achieved with one 2-D view category and of 98.5% correct with three 2-D view categories.National Science Foundation (IRI 90-24877); Office of Naval Research (N00014-91-J-1309, N00014-91-J-4100, N00014-92-J-0499); Air Force Office of Scientific Research (F9620-92-J-0499, 90-0083

Spin transition in Gd3_3N@C80_{80}, detected by low-temperature on-chip SQUID technique

We present a magnetic study of the Gd$_3$N@C$_{80}$ molecule, consisting of a Gd-trimer via a Nitrogen atom, encapsulated in a C$_{80}$ cage. This molecular system can be an efficient contrast agent for Magnetic Resonance Imaging (MRI) applications. We used a low-temperature technique able to detect small magnetic signals by placing the sample in the vicinity of an on-chip SQUID. The technique implemented at NHMFL has the particularity to operate in high magnetic fields of up to 7 T. The Gd$_3$N@C$_{80}$ shows a paramagnetic behavior and we find a spin transition of the Gd$_3$N structure at 1.2 K. We perform quantum mechanical simulations, which indicate that one of the Gd ions changes from a $^8S_{7/2}$ state ($L=0, S=7/2$) to a $^7F_{6}$ state ($L=S=3, J=6$), likely due to a charge transfer between the C$_{80}$ cage and the ion

Constraints on the Stellar/Sub-stellar Mass Function in the Inner Orion Nebula Cluster

We present the results of a 0.5-0.9" FWHM imaging survey at K (2.2 micron) and H (1.6 micron) covering 5.1' x 5.1' centered on Theta 1C Ori, the most massive star in the Orion Nebula Cluster (ONC). At the age and distance of this cluster, and in the absence of extinction, the hydrogen burning limit (0.08 Mo) occurs at K~13.5 mag while an object of mass 0.02 Mo has K~16.2 mag. Our photometry is complete for source detection at the 7 sigma level to K~17.5 mag and thus is sensitive to objects as low-mass as 0.02 Mo seen through visual extinction values as high as 10 magnitudes. We use the observed magnitudes, colors, and star counts to constrain the shape of the inner ONC stellar mass function across the hydrogen burning limit. After determining the stellar age and near-infrared excess properties of the optically visible stars in this same inner ONC region, we present a new technique that incorporates these distributions when extracting the mass function from the observed density of stars in the K-(H-K) diagram. We find that our data are inconsistent with a mass function that rises across the stellar/sub-stellar boundary. Instead, we find that the most likely form of the inner ONC mass function is one that rises to a peak around 0.15 Mo, and then declines across the hydrogen-burning limit with slope N(log M) ~ M^(0.57+/-0.05). We emphasize that our conclusions apply to the inner 0.71 pc x 0.71 pc of the ONC only; they may not apply to the ONC as a whole where some evidence for general mass segregation has been found.Comment: Accepted for publication in the Astrophysical Journal. Preprints/tables also available at http://phobos.caltech.edu/~jmc/papers/onc