Market structure, screening activity and bank lending behaviour

In this paper we construct a theoretical model of spatial banking competition that considers the differential information among banks and potential borrowers in order to investigate how market structure affects the lending behavior of banks and their incentives to invest in screening technology. Consistent with the prevailing view in the relevant literature, our results reveal that competition reduces lending cost, which, in turn, encourages the entry of new customers in the loan market. Also, that the transportation cost that potential borrowers have to pay in order to reach the bank of their interest is decreased with the degree of competitiveness. Importantly, we demonstrate that market structure exerts a considerable positive effect on banks’ incentives to screen their loan applicants since banks are found to invest more in screening as competition in the market becomes higher. This is to say, banks resort to screening that serves as a buffer mechanism against bad credit which entails higher risk and which is more likely under competitive conditions. Overall, our findings provide support to a rather close link between the degree of competition, bank lending activity, and the investment of banks in screening technology

What lies behind the "Too-Small-To-Survive" banks

It is a common place that during financial crises, like the one started in 2007, authorities provide substantial financial support to some problem banks, whilst at the same time let several others to go bankrupt. Is this happening because some particular banks are considered important and big enough to save, whereas some others are perceived as being ‘Too-Small-To-Survive’? Is the size of banks the fundamental factor that makes authorities to treat them differently, or it is also that some banks perform poorly and are not capable of withstanding some considerable shocks whatsoever? Our study provides concrete answers to these questions thus filling part of the void in the existing literature. A short- and a long-run positive relationship between size and performance is documented regardless of the level of bank soundness (healthy vs. failed and assisted banks) under scrutiny. Importantly, we pose and lend support to the ‘Too-Small-To-Survive’ hypothesis according to which the impact of bank performance on failure probability strongly depends on size. Evidence shows that authorities tend not to save banks whose size is below some specific threshold

Absolute spectral gaps for infrared light and hypersound in three-dimensional metallodielectric phoxonic crystals

By means of full electrodynamic and elastodynamic multiple-scattering calculations we study the optical and acoustic properties of three-dimensional lattices of metallic nanospheres implanted in a dielectric host. Our results show that such structures exhibit omnidirectional spectral gaps for both telecom infrared light and hypersound, with relatively low absorptive losses. This class of dual phoxonic band-gap materials is an essential step toward the hypersonic modulation of light and could lead to the development of efficient acousto-optical devices

Determinants of bank efficiency: Evidence from a semi-parametric methodology

In this paper, we use a semi-parametric two-stage model to examine the effect of bank-specific, industry-specific and macroeconomic determinants of bank efficiency. This method, proposed by Simar and Wilson (2007), relaxes several deficiencies of previous two-stage analyses, which regress non-parametric estimates of bank efficiency on exogenous determinants. In particular, we propose a bootstrap procedure to be used in the second stage and we compare the results obtained to the equivalents of a Tobit model. We suggest that the Tobit regressions inaccurately provide insignificant estimates for the effect of bank size, industry concentration and economic investment on bank efficiency, a fact that illustrates the power of the new method. Since the effect of these determinants has been ambiguous in previous literature, this may be a desideratum for future research.Bank efficiency; semi-parametric models

Fault slip-rate variations during crustal-scale strain localisation, central Italy

Rates of plate motion are generally uniform over 10–102 Myrs timescales. Faults between tectonic plates might, therefore, be expected to show temporally-uniform slip-rates if the same number of faults remain active. For an extending region of the Eurasia-Africa plate boundary, Italy, finite throw values (vertical component of the slip) for seismogenic normal faults are less than that predicted when recent throw-rates are extrapolated over the fault lifetimes. The effect correlates with distance from the fault system tips and demonstrates that the slip-rates on centrally-located faults have increased with time. Neighbouring normal faults were active in the Quaternary but show no signs of surface faulting during the latest Pleistocene to Holocene. Death of these faults has provided the extra strain per unit time to drive the increased slip-rates measured on other faults. Thus, fault interaction and death modify slip-rates and seismic hazards associated with plate tectonics

Exploring the Nexus between Banking Sector Reform and Performance: Evidence from Newly Acceded EU Countries

The aim of this study is to examine the relationship between banking sector reform and bank performance – measured in terms of efficiency, total factor productivity growth and net interest margin – accounting for the effects through competition and bank risk-taking. To this end, we develop an empirical model of bank performance and draw on recent econometric advances to consistently estimate it. The model is applied to bank panel data from ten newly acceded EU countries. The results indicate that both banking sector reform and competition exert a positive impact on bank efficiency, while the effect of reform on total factor productivity growth is significant only toward the end of the reform process. Finally, the effect of capital and credit risk on bank performance is in most cases negative, while it seems that higher liquid assets reduce the efficiency and productivity of banks.Bank performance; Banking sector reform; Competition; Risk-taking

Magnetoresistance of atomic-sized contacts: an ab-initio study

The magnetoresistance (MR) effect in metallic atomic-sized contacts is studied theoretically by means of first-principle electronic structure calculations. We consider three-atom chains formed from Co, Cu, Si, and Al atoms suspended between semi-infinite Co leads. We employ the screened Korringa-Kohn-Rostoker Green's function method for the electronic structure calculation and evaluate the conductance in the ballistic limit using the Landauer approach. The conductance through the constrictions reflects the spin-splitting of the Co bands and causes high MR ratios, up to 50%. The influence of the structural changes on the conductance is studied by considering different geometrical arrangements of atoms forming the chains. Our results show that the conductance through s-like states is robust against geometrical changes, whereas the transmission is strongly influenced by the atomic arrangement if p or d states contribute to the current.Comment: Revised version, presentation of results is improved, figure 2 is splitted to two figure

Does the CAMELS bank ratings system follow a procyclical pattern?

The financial crisis which erupted in 2007-8 has illustrated the disruptive effects of procyclicality. The phenomenon of procyclicality refers to the mutually reinforcing interactions between the financial system and the real economy that tend to amplify business cycle fluctuations. In this study, we empirically investigate the sensitivity of the CAMELS ratings system, which is used by the U.S. authorities to monitor the conditions in the banking market, to the fluctuations of the economic cycle. Our results suggest that the overall state of the U.S. economy and bank regulatory ratings are positively linked to each other: CAMELS increase during economic upturns and decrease during downturns. This is to say that the performance and risk-taking behaviour of banks is rated higher when the conditions in the economy are favourable and lower when the economic environment is weak. Along these lines, we document a positive relationship between CAMELS and the conditions in financial markets. This very important and rather unknown source of procyclicality should be taken into serious consideration by authorities