The Optimal Capital Structure of Banks: Balancing Deposit Insurance, Capital Requirements and Tax-Advantaged Debt

The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its costs (e.g., bankruptcy costs). However, when traditional corporate finance models have been applied to insured financial institutions, the results have generally predicted corner solutions (all equity or all debt) to the capital structure problem. This paper studies the impact and interaction of deposit insurance, capital requirements and tax benefits on a bankÇs choice of optimal capital structure. Using a contingent claims model to value the firm and its associated claims, we find that there exists an interior optimal capital ratio in the presence of deposit insurance, taxes and a minimum fixed capital standard. Banks voluntarily choose to maintain capital in excess of the minimum required in order to balance the risks of insolvency (especially the loss of future tax benefits) against the benefits of additional debt. Because we derive a closed- form solution, our model provides useful insights on several current policy debates including revisions to the regulatory framework for GSEs, tax policy in general and the tax exemption for credit unions

Tricarbonylchlorido(6'7'-dihydro-5’H-spiro[cyclopentane-1,6'-dipyrido-[3,2-d:2',3'-f][1,3]diazepine]-κ2N1,N11)-rhenium(I)

In the title compound, [ReCl(C15H16N4)(CO)3], the ReI ion is coordinated in a distorted octahedral geometry by one Cl atom, two N atoms of the bidentate ligand and three carbonyl groups. The cyclopentane group is orientated in a transoid fashion with respect to the chloride ligand. The dihedral angle between the pryridine rings is 10.91 (12)°. In the crystal, N-H...Cl hydrogen bonds link complex molecules, forming a two-dimensional network parallel to (001)

Do investors see through mistakes in reported earnings?

This study investigates whether investors see through materially misstated earnings, and whether they anticipate earnings restatements. For firms that restate at least one annual report, we find that investors are misled by mistakes in reported earnings at the time of initial earnings announcements. Investors react positively to the component of the favorable earnings surprise that will subsequently be restated, and attach the same valuation to it as to the true earnings surprise. We also find that investors anticipate the subsequent downward restatements and start marking stock prices down several months before a restatement announcement, so that the full impact of a restatement is about three times as large as the initial announcement effect. Overall our findings indicate that although investors anticipate restatements several months before its announcement, they are misled by misstated earnings for several years and therefore would benefit from better quality of financial information

Tricarbonylchlorido(6’,7’-dihydro-5’H-spiro[cyclohexane-1,6’-dipyrido[3,2-d :2’,3’-f][1,3]diazepine]-κ2N1,N11)rhenium(I)

In the title compound, [ReCl(C16H18N4)(CO)3], the ReI ion is coordinated in a distorted octahedral geometry by one Cl atom, two N atoms of the bidentate ligand and three carbonyl groups. The cyclohexane group is orientated in a transoid fashion with respect to the chloride ligand. In the crystal, N-H...Cl hydrogen bonds link complex molecules, forming a two-dimensional network parallel to (100)

Halo Star Streams in the Solar Neighborhood

We have assembled a sample of halo stars in the solar neighborhood to look for halo substructure in velocity and angular momentum space. Our sample includes red giants, RR Lyrae, and red horizontal branch stars within 2.5 kpc of the Sun with [Fe/H] less than -1.0. It was chosen to include stars with accurate distances, space velocities, and metallicities as well as well-quantified errors. We confirm the existence of the streams found by Helmi and coworkers, which we refer to as the H99 streams. These streams have a double-peaked velocity distribution in the z direction. We use the results of modeling of the H99 streams by Helmi and collaborators to test how one might use v_z velocity information and radial velocity information to detect kinematic substructure in the halo. We find that detecting the H99 streams with radial velocities alone would require a large sample. We use the velocity distribution of the H99 streams to estimate their age. From our model of the progenitor of the H99 streams, we determine that it was accreted between 6 and 9 Gyr ago. The H99 streams have [alpha/Fe] abundances similar to other halo stars in the solar neighborhood, suggesting that the gas that formed these stars were enriched mostly by Type II SNe. We have also discovered in angular momentum space two other possible substructures, which we refer to as the retrograde and prograde outliers. The retrograde outliers are likely to be halo substructure, but the prograde outliers are most likely part of the smooth halo. The retrograde outliers have significant structure in the v_phi direction and show a range of [alpha/Fe]. The methods presented in this paper can be used to exploit the kinematic information present in future large databases like RAVE, SDSSII/SEGUE, and Gaia.Comment: 46 pages, 13 figures, and 9 tables. Minor changes to text to match proofed version of the paper. Low resolution figures. High resolution version at http://www.astro.wisc.edu/~kepley/solar_streams.p

Association of immune response with efficacy and safety outcomes in adults with phenylketonuria administered pegvaliase in phase 3 clinical trials

Background: This study assessed the immunogenicity of pegvaliase (recombinant Anabaena variabilis phenylalanine [Phe] ammonia lyase [PAL] conjugated with polyethylene glycol [PEG]) treatment in adults with phenylketonuria (PKU) and its impact on safety and efficacy. Methods: Immunogenicity was assessed during induction, upward titration, and maintenance dosing regimens in adults with PKU (n = 261). Total antidrug antibodies (ADA), neutralizing antibodies, immunoglobulin (Ig) M and IgG antibodies against PAL and PEG, IgG and IgM circulating immune complex (CIC) levels, complement components 3 and 4 (C3/C4), plasma Phe, and safety were assessed at baseline and throughout the study. Pegvaliase-specific IgE levels were measured in patients after hypersensitivity adverse events (HAE). Findings: All patients developed ADA against PAL, peaking by 6 months and then stabilizing. Most developed transient antibody responses against PEG, peaking by 3 months, then returning to baseline by 9 months. Binding of ADA to pegvaliase led to CIC formation and complement activation, which were highest during early treatment. Blood Phe decreased over time as CIC levels and complement activation declined and pegvaliase dosage increased. HAEs were most frequent during early treatment and declined over time. No patient with acute systemic hypersensitivity events tested positive for pegvaliase-specific IgE near the time of the event. Laboratory evidence was consistent with immune complex-mediated type III hypersensitivity. No evidence of pegvaliase-associated IC-mediated end organ damage was noted. Interpretation: Despite a universal ADA response post-pegvaliase administration, adult patients with PKU achieved substantial and sustained blood Phe reductions with a manageable safety profile. Fund: BioMarin Pharmaceutical Inc. Keywords: Enzyme replacement therapy, Antidrug antibody, Circulating immune complex, Hypersensitivity, Phenylalanin

The Hubble Space Telescope Extragalactic Distance Scale Key Project XXIII. The Discovery of Cepheids In NGC 3319

The distance to NGC 3319 has been determined from Cepheid variable stars as part of the Hubble Space Telescope Key Project on the Extragalactic Distance Scale. Thirteen and four epochs of observations, using filters F555W (V) and F814W (I) respectively, were made with the Wide Field Planetary Camera 2. Thirty-three Cepheid variables between periods of 8 and 47 days were discovered. Adopting a Large Magellanic Cloud distance modulus of 18.50 +- 0.10 mag and extinction of E(V-I)=0.13 mag, a true reddening-corrected distance modulus (based on an analysis employing the ALLFRAME software package) of 30.78 +- 0.14 (random) +- 0.10 (systematic) mag and the extinction of E(V-I) = 0.06 mag were determined for NGC 3319. This galaxy is the last galaxy observed for the HST H0 Key Project.Comment: 22 pages. A gzipped tar file containing 16 figures can be obtained from http://www.ipac.caltech.edu/H0kp/n3319/n3319.htm

Deep CCD Surface Photometry of Galaxy Clusters I: Methods and Initial Studies of Intracluster Starlight

We report the initial results of a deep imaging survey of galaxy clusters. The primary goals of this survey are to quantify the amount of intracluster light as a function of cluster properties, and to quantify the frequency of tidal debris. We outline the techniques needed to perform such a survey, and we report findings for the first two galaxy clusters in the survey: Abell 1413, and MKW 7 . These clusters vary greatly in richness and structure. We show that our surface photometry reliably reaches to a surface brightness of \mu_v = 26.5 mags per arcsec. We find that both clusters show clear excesses over a best-fitting r^{1/4} profile: this was expected for Abell 1413, but not for MKW 7. Both clusters also show evidence of tidal debris in the form of plumes and arc-like structures, but no long tidal arcs were detected. We also find that the central cD galaxy in Abell 1413 is flattened at large radii, with an ellipticity of $\approx 0.8$, the largest measured ellipticity of any cD galaxy to date.Comment: 58 pages, 24 figures, accepted for publication in the Astrophysical Journal. Version has extremely low resolution figures to comply with 650k limit. High resolution version is available at http://burro.astr.cwru.edu/johnf/icl1.ps.gz Obtaining high resolution version is strongly reccomende