Procyclicality of financial systems: is there a need to modify current accounting and regulatory rules?

Financial systems have an intrinsic tendency to exacerbate business cycle fluctuations rather than smoothing them out. The current crisis is a perfect illustration of this. Some commentators have argued that the recent reforms to international bank regulation (Basel II) and accounting rules (IAS 39) are likely to increase this intrinsic procyclicality in the future. This article examines whether this accusation is founded and what policy decisions could be envisaged to alleviate this undesirable feature of financial systems.

Liquidity regulation and the lender of last resort.

The recent subprime crisis has brought back to light proposals to regulate banks’ liquidity as a complement to solvency regulations. Based on recent academic research, I suggest that liquidity regulations might indeed be a way to limit the pressure on Central Banks in favour of liquidity injections during crisis periods. Another crucial question is the allocation of responsibilities between the Central Bank, the Banking Supervisors and the Treasury in the management of banking crises.

Scintillation efficiency of liquid argon in low energy neutron-argon scattering

Experiments searching for weak interacting massive particles with noble gases such as liquid argon require very low detection thresholds for nuclear recoils. A determination of the scintillation efficiency is crucial to quantify the response of the detector at low energy. We report the results obtained with a small liquid argon cell using a monoenergetic neutron beam produced by a deuterium-deuterium fusion source. The light yield relative to electrons was measured for six argon recoil energies between 11 and 120 keV at zero electric drift field.Comment: 21 pages, 19 figures, 4 table

Randomized Revenue Monotone Mechanisms for Online Advertising

Online advertising is the main source of revenue for many Internet firms. A central component of online advertising is the underlying mechanism that selects and prices the winning ads for a given ad slot. In this paper we study designing a mechanism for the Combinatorial Auction with Identical Items (CAII) in which we are interested in selling $k$ identical items to a group of bidders each demanding a certain number of items between $1$ and $k$. CAII generalizes important online advertising scenarios such as image-text and video-pod auctions [GK14]. In image-text auction we want to fill an advertising slot on a publisher's web page with either $k$ text-ads or a single image-ad and in video-pod auction we want to fill an advertising break of $k$ seconds with video-ads of possibly different durations. Our goal is to design truthful mechanisms that satisfy Revenue Monotonicity (RM). RM is a natural constraint which states that the revenue of a mechanism should not decrease if the number of participants increases or if a participant increases her bid. [GK14] showed that no deterministic RM mechanism can attain PoRM of less than $\ln(k)$ for CAII, i.e., no deterministic mechanism can attain more than $\frac{1}{\ln(k)}$ fraction of the maximum social welfare. [GK14] also design a mechanism with PoRM of $O(\ln^2(k))$ for CAII. In this paper, we seek to overcome the impossibility result of [GK14] for deterministic mechanisms by using the power of randomization. We show that by using randomization, one can attain a constant PoRM. In particular, we design a randomized RM mechanism with PoRM of $3$ for CAII

Luminescence quenching of the triplet excimer state by air traces in gaseous argon

While developing a liquid argon detector for dark matter searches we investigate the influence of air contamination on the VUV scintillation yield in gaseous argon at atmospheric pressure. We determine with a radioactive alpha-source the photon yield for various partial air pressures and different reflectors and wavelength shifters. We find for the fast scintillation component a time constant tau1= 11.3 +- 2.8 ns, independent of gas purity. However, the decay time of the slow component depends on gas purity and is a good indicator for the total VUV light yield. This dependence is attributed to impurities destroying the long-lived argon excimer states. The population ratio between the slowly and the fast decaying excimer states is determined for alpha-particles to be 5.5 +-0.6 in argon gas at 1100 mbar and room temperature. The measured mean life of the slow component is tau2 = 3.140 +- 0.067 microsec at a partial air pressure of 2 x 10-6 mbar.Comment: 7 pages submitted to NIM

Elimination of Competitors: Some Economics of Payment Card Associations

This paper analyzes platforms and rejections in two-sided markets with network externalities, using the specific context of a payment card association. We study the cooperative antitrust determination of the interchange fee by member banks. We use a framework in which banks and merchants may have market power and consumers and merchants decide rationally on whether to buy or accept a payment card developed by Rochet and Tirole (2002). After drawing the welfare implications of a cooperative determination of the interchange fee and antitrust conducts, we describe in detail the factors affecting merchant resistance, compare cooperative and for-profit business models, and make a first cut in the analysis of system competition

Study of nuclear recoils in liquid argon with monoenergetic neutrons

For the development of liquid argon dark matter detectors we assembled a setup in the laboratory to scatter neutrons on a small liquid argon target. The neutrons are produced mono-energetically (E_kin=2.45 MeV) by nuclear fusion in a deuterium plasma and are collimated onto a 3" liquid argon cell operating in single-phase mode (zero electric field). Organic liquid scintillators are used to tag scattered neutrons and to provide a time-of-flight measurement. The setup is designed to study light pulse shapes and scintillation yields from nuclear and electronic recoils as well as from {\alpha}-particles at working points relevant to dark matter searches. Liquid argon offers the possibility to scrutinise scintillation yields in noble liquids with respect to the populations of the two fundamental excimer states. Here we present experimental methods and first results from recent data towards such studies.Comment: 9 pages, 8 figures, proceedings of TAUP 2011, to be published in Journal of Physics: Conference Series (JCPS

Thermodynamics of aggregation of two proteins

We investigate aggregation mechanism of two proteins in a thermodynamically unambiguous manner by considering the finite size effect of free energy landscape of HP lattice protein model. Multi-Self-Overlap-Ensemble Monte Carlo method is used for numerical calculations. We find that a dimer can be formed spontaneously as a thermodynamically stable state when the system is small enough. It implies the possibility that the aggregation of proteins in a cell is triggered when they are confined in a small region by, for example, being surrounded by other macromolecules.We also find that the dimer exhibits a transition between unstable state and metastable state in the infinite system.Comment: jpsj2.cls, 7 pages, 14 figures; misconfigurations of Fig.Nos. correcte

Consumer Credit and Payment Cards

We consider debit and credit card networks. Our contribution is to introduce the role of consumer credit into these payment networks, and to assess the way this affects competition and equilibrium fees. We analyze a situation in which overdrafts are associated with current accounts and debit cards, and larger credit lines with ‘grace’ periods are associated with credit cards. If we just introduce credit cards, we find their merchant fees depend not only on the networks’ cost of funds and the probability of default, but also on the interest rates of overdrafts. Whilst debit card merchant fees do not depend on funding costs or default risk in a debit-card only world, this changes when they start to compete with credit cards. First, debit merchant acceptance increases with the default probability, even though merchant fees increase. Second, an increase in funding costs causes a surprising increase in debit merchant fees. Effectively, the bank offering the debit card benefits from consumers maintaining a positive current account balance, when they use their credit instead of their debit card. As a result, this complementarity may lead to relatively high debit card merchant fees as the bank discourages debit card acceptance at the margin

Antitrust in Two-Sided Markets: Is Competition Always Desirable?

The main objective of antitrust interventions is to assure competition in markets to benefit consumers. This paper challenges this common approach by examining the case of a satellite broadcasting network with monopoly power. First, satellite TV is identified as a two-sided market. It is then analyzed in the framework of the canonical model for two-sided markets developed by Rochet & Tirole (2004). The main finding is that the satellite network maximizes his profits by choosing a price formation which maximizes the overall welfare of all market participants. Even if the satellite network uses his monopoly power to introduce a fee to receive satellite TV, it would do so only until the semi-elasticity of the amount of consumers in regard to the per-interaction-price equals the one of the TV stations – exactly the point where welfare is maximized. It is therefore concluded that antitrust cases have to take a more in-depth look at two-sided markets before deciding that competition is best for consumers