Carving Out Legacy Assets: A Successful Tool for Bank Restructuring?

Beginning with the proposal by Enria (2017), the paper discusses the scope for successful bank restructuring through a carveout of impaired assets and a transfer of these assets to a government-sponsored asset management company. The paper argues that the success of such an operation requires a use of public funds, either outright or through contingent commitments. Clawback provisions are problematic because they create contingent liabilities that merely shift risks from the assets side to the liabilities sides of banks’ balance sheets. The paper distinguishes between asset impairments coming from considerations of prospective returns and asset impairments coming from frictions in the markets in which these assets are traded. It also distinguishes between threats to bank solvency and threats to bank funding/liquidity. In each case, the success of bank restructuring from asset carveouts depends on the extent to which threats to the bank’s solvency is eliminated. If these threats concern bank funding and asset liquidations at depressed prices, public funds may eventually not be needed. If threats to bank solvency come from nonperforming loans, taxpayer support may be essential. The notion of “real economic value” as the price at which assets should be transferred is problematic and leaves ample room for hidden subsidies. The success of restructuring of the individual bank may itself come at a risk to financial stability as the preservation of existing capacities maintains competitive pressure and depresses bank profitability. Additional risks may come from the burden on the government’s fiscal stance

Relationships Between the Performance of Time/Frequency Standards and Navigation/Communication Systems

The relationship between system performance and clock or oscillator performance is discussed. Tradeoffs discussed include: short term stability versus bandwidth requirements; frequency accuracy versus signal acquisition time; flicker of frequency and drift versus resynchronization time; frequency precision versus communications traffic volume; spectral purity versus bit error rate, and frequency standard stability versus frequency selection and adjustability. The benefits and tradeoffs of using precise frequency and time signals are various levels of precision and accuracy are emphasized

Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity is Not Expensive

We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly and would affect credit markets adversely. We find that arguments made to support this view are either fallacious, irrelevant, or very weak. For example, the return on equity contains a risk premium that must go down if banks have more equity. It is thus incorrect to assume that the required return on equity remains fixed as capital requirements increase. It is also incorrect to translate higher taxes paid by banks to a social cost. Policies that subsidize debt and indirectly penalize equity through taxes and implicit guarantees are distortive. Any desirable public subsidies to banks’ activities should be given directly and not in ways that encourage leverage. Finally, suggestions that high leverage serves a necessary disciplining role are based on inadequate theory lacking empirical support. We conclude that bank equity is not socially expensive, and that high leverage is not necessary for banks to perform all their socially valuable functions, including lending, taking deposits and issuing money-like securities. To the contrary, better capitalized banks suffer fewer distortions in lending decisions and would perform better. The fact that banks choose high leverage does not imply that this is socially optimal, and, viewed from an ex ante perspective, high leverage may not even be privately optimal for banks. Setting equity requirements significantly higher than the levels currently proposed would entail large social benefits and minimal, if any, social costs. Approaches based on equity dominate alternatives, including contingent capital. To achieve better capitalization quickly and efficiently and prevent disruption to lending, regulators must actively control equity payouts and issuance. If remaining challenges are addressed, capital regulation can be a powerful tool for enhancing the role of banks in the economy.capital regulation, financial institutions, capital structure, too big to fail, systemic risk, bank equity, contingent capital, Basel.

DEVELOPMENT OF VIRTUAL EVENT MARKETING

In the last few years the Pichia pastoris expression system has been gaining more and more interest for the expression of recombinant proteins. Many groups have employed fermentation technology in their investigations because the system is fairly easy to scale up and suitable for the production in the milligram to gram range. A large number of heterologous proteins from different sources has been expressed, but the fermentation process technology has been investigated to a lesser extent. A large number of fermentations are carried out in standard bioreactors that may be insufficiently equipped to meet the demands of high-cell-density fermentations of methylotrophic yeasts. In particular, the lack of on-line methanol analysis leads to fermentation protocols that may impair the optimal expression of the desired products. We have used a commercially available methanol sensor to investigate in detail the effects of supplementary glycerol feeding while maintaining a constant methanol concentration during the induction of a Mut+ strain of Pichia pastoris. Specific glycerol feed rates in the range of 38-4.2 mg × g(exp -1) × h(exp -1) (mg glycerol per gram fresh weight per hour) were investigated. Expression of the recombinant scFv antibody fragment was only observed at specific feed rates below 6 mg × g(exp -1) × h(exp -1). At low specific feed rates, growth was even lower than with methanol as the sole carbon source and the harvest expression level of the scFv was only half of that found in the control fermentation. These results show that glycerol inhibits expression driven by the AOX1 promoter even at extremely limited availability and demonstrate the benefits of on-line methanol control in Pichia fermentation research

The correlation between ovule quality parameters and the seed yield at Cyclamen persicum MILL.

Are there indicators that the seed yield at Cyclamen persicum is predetermined by the quality of ovules? This was the main question of these investigations.The aim of our study was to investigate why only some of the available ovules develop into mature seeds. We surmised that the quality of the ovules played an important role in this. In order to corroborate this theory, we examined specific ovule parameters and their correlation with seed yield.The parameters included the levels of callose in the nucellus, the heterogeneity of embryo sacs, the deviants in callose inclusion and the number of ovules examined by light and fluorescence microscopy.There is still considerable disagreement on the biological significance of the inclusion of callose in ovules. In our study, we were able to show that the inclusion of callose is essential for fertilization in the case of C. persicum. This appears to contradict the findings reported for other plant species, where the inclusion of callose has been evaluated as a sign of ovule degeneration. However, the results of our study clearly demonstrate that seed yield is already determined by the maternal plant during the ovule development phase, i. e. shortly before and at the beginning of anthesis.Some ovule parameters allow predictions to be made about the expected seed yield for the studied genotypes of C. persicum

An Economic Approach to Article 82

This report argues in favour of an economics-based approach to Article 82, in a way similar to the reform of Article 81 and merger control. In particular, we support an effects-based rather than a form-based approach to competition policy. Such an approach focuses on the presence of anti-competitive effects that harm consumers, and is based on the examination of each specific case, based on sound economics and grounded on facts

'Total Assets' Versus 'Risk Weighted Assets': Does it Matter for MREL Requirements?

The paper discusses the role of risk weighting in the determination of minimum requirements for eligible bail-in-able liabilities of banks (MREL), i.e. liabilities that are not exempt from the bail-in tool in bank resolution and that can be written down or converted into equity if losses on assets exceed the available equity and such bailing-in is required to re-establish bank solvency so as to provide a basis for maintaining systemically important operations in resolution. The paper begins with a general discussion of the reasons for introducing bank resolution as a special procedure outside of insolvency law, of the reasons for having the bail-in tool and of the frictions that may stand in the way of successful and frictionless resolution. This discussion emphasizes the importance of having sufficient bail-in-able liabilities available; in contrast, for large institutions that have access to bond markets, the social costs of such requirements are small (unlike the private costs to the banks themselves). However, neither risk weighted nor total assets provide proper guidance for determining MREL. Risk-weighting suffers from a lack of a proper statistical basis and a certain manipulability. Moreover, the risk weighting that is used for capital regulation is not well suited for determining MREL; whereas capital regulation focuses on the probability of bad results, MREL is concerned with the extent of losses conditional on results being bad. “Total assets” suffer from not truly representing total assets because various rules, e.g. for netting, allow banks to keep certain assets and liabilities off their balance sheets

Comment on "Quantum mechanics of smeared particles"

In a recent article, Sastry has proposed a quantum mechanics of smeared particles. We show that the effects induced by the modification of the Heisenberg algebra, proposed to take into account the delocalization of a particle defined via its Compton wavelength, are important enough to be excluded experimentally.Comment: 2 page

The use of conceptual components in language production: an ERP study

According to frame-theory, concepts can be represented as structured frames that contain conceptual attributes (e.g., "color") and their values (e.g., "red"). A particular color value can be seen as a core conceptual component for (high color-diagnostic; HCD) objects (e.g., bananas) which are strongly associated with a typical color, but less so for (low color-diagnostic; LCD) objects (e.g., bicycles) that exist in many different colors. To investigate whether the availability of a core conceptual component (color) affects lexical access in language production, we conducted two experiments on the naming of visually presented HCD and LCD objects. Experiment 1 showed that, when naming latencies were matched for colored HCD and LCD objects, achromatic HCD objects were named more slowly than achromatic LCD objects. In Experiment 2 we recorded ERPs while participants performed a picture-naming task, in which achromatic target pictures were either preceded by an appropriately colored box (primed condition) or a black and white checkerboard (unprimed condition). We focused on the P2 component, which has been shown to reflect difficulty of lexical access in language production. Results showed that HCD resulted in slower object-naming and a more pronounced P2. Priming also yielded a more positive P2 but did not result in an RT difference. ERP waveforms on the P1, P2 and N300 components showed a priming by color-diagnosticity interaction, the effect of color priming being stronger for HCD objects than for LCD objects. The effect of color-diagnosticity on the P2 component suggests that the slower naming of achromatic HCD objects is (at least in part) due to more difficult lexical retrieval. Hence, the color attribute seems to affect lexical retrieval in HCD words. The interaction between priming and color-diagnosticity indicates that priming with a feature hinders lexical access, especially if the feature is a core feature of the target object

An Economic Approach to Article 82

This report argues in favour of an economics-based approach to Article 82, in a way similar to the reform of Article 81 and merger control. In particular, we support an effects-based rather than a form-based approach to competition policy. Such an approach focuses on the presence of anti-competitive effects that harm consumers, and is based on the examination of each specific case, based on sound economics and grounded on facts.competition policy; abuse of market power