Bank capital structure, regulatory capital, and securities innovations

Although financial instruments that, in effect, permit corporations to treat preferred stock dividends as tax-deductible interest have been used by nonfinancial corporations since late 1993, bank holding companies (BHCs) did not issue these trust-preferred securities (TPS) until 1996, when the Federal Reserve qualified them as Tier-1 capital. We delineate and test hypotheses with 1) analyses of the stock-market reaction to the Fed’s ruling and to TPS filings and 2) comparisons of BHCs that issued TPS with those that did not. We conclude that regulatory capital requirements, tax savings, and uninsured sources of funds can have significant positive effects on BHCs’ demand for capital; growth and investment opportunities have an inconclusive effect; and transaction costs have a negative effect. Our results are not consistent with the moral-hazard hypothesis.Bank capital ; Bank holding companies ; Bank supervision ; Securities

Ariel - Volume 9 Number 3

Executive Editor Emily Wofford Business Manager Fredric Jay Matlin University News John Patrick Welch World News George Robert Coar Editorials Editor Steve Levine Features Mark Rubin Brad Feldstein Photo Rick Spaide Circulation Victor Onufreiczuk Lee Wugofski Graphics and Art Steve Hulkower Commons Editor Brenda Peterso

Development of a highly sensitive liquid biopsy platform to detect clinically-relevant cancer mutations at low allele fractions in cell-free DNA.

INTRODUCTION: Detection and monitoring of circulating tumor DNA (ctDNA) is rapidly becoming a diagnostic, prognostic and predictive tool in cancer patient care. A growing number of gene targets have been identified as diagnostic or actionable, requiring the development of reliable technology that provides analysis of multiple genes in parallel. We have developed the InVision™ liquid biopsy platform which utilizes enhanced TAm-Seq™ (eTAm-Seq™) technology, an amplicon-based next generation sequencing method for the identification of clinically-relevant somatic alterations at low frequency in ctDNA across a panel of 35 cancer-related genes. MATERIALS AND METHODS: We present analytical validation of the eTAm-Seq technology across two laboratories to determine the reproducibility of mutation identification. We assess the quantitative performance of eTAm-Seq technology for analysis of single nucleotide variants in clinically-relevant genes as compared to digital PCR (dPCR), using both established DNA standards and novel full-process control material. RESULTS: The assay detected mutant alleles down to 0.02% AF, with high per-base specificity of 99.9997%. Across two laboratories, analysis of samples with optimal amount of DNA detected 94% mutations at 0.25%-0.33% allele fraction (AF), with 90% of mutations detected for samples with lower amounts of input DNA. CONCLUSIONS: These studies demonstrate that eTAm-Seq technology is a robust and reproducible technology for the identification and quantification of somatic mutations in circulating tumor DNA, and support its use in clinical applications for precision medicine

Ordering of mutations in preinvasive disease stages of esophageal carcinogenesis.

Cancer genome sequencing studies have identified numerous driver genes, but the relative timing of mutations in carcinogenesis remains unclear. The gradual progression from premalignant Barrett's esophagus to esophageal adenocarcinoma (EAC) provides an ideal model to study the ordering of somatic mutations. We identified recurrently mutated genes and assessed clonal structure using whole-genome sequencing and amplicon resequencing of 112 EACs. We next screened a cohort of 109 biopsies from 2 key transition points in the development of malignancy: benign metaplastic never-dysplastic Barrett's esophagus (NDBE; n=66) and high-grade dysplasia (HGD; n=43). Unexpectedly, the majority of recurrently mutated genes in EAC were also mutated in NDBE. Only TP53 and SMAD4 mutations occurred in a stage-specific manner, confined to HGD and EAC, respectively. Finally, we applied this knowledge to identify high-risk Barrett's esophagus in a new non-endoscopic test. In conclusion, mutations in EAC driver genes generally occur exceptionally early in disease development with profound implications for diagnostic and therapeutic strategies