Financial stability issues arising from current risk premia configurations and dynamics.

One of the major financial stability issues, we currently need to focus upon, relates to risk premia dynamics. Recent market turbulences have indeed, once more, shown that such dynamics can change quickly. True, the well known long term interest rates conundrum, highlighted by M. Greenspan, might appear less crucial an issue in 2006 than in 2004/2005. But several other market configurations appear puzzling. First, long term interest rates remain relatively low at this stage of the cycle. However, the jury is still out regarding the question, whether low term premia will be permanent. Second, credit markets remain buoyant, with very aggressive pricing. Low credit spreads often only match average historical rates of default without providing additional risk premium. A benign scenario can obviously account for such a configuration, but this is only one scenario among many other more risky ones. Third, the contrast with high equity risk premia is puzzling. In the past, at the specific time when excesses from previous bubbles had to be wiped out without too much damage to economic growth, the decrease in credit spreads in the face of high equity risk premia might have served financial stability. But, currently and for the longer term, these advantages seem less clear. Higher credit risk premia premia might indeed bode better for future financial stability. Fourth, recent market tensions have highlighted some vulnerabilities. This should lead us i) to remain cautious in our assessment of potential future short term market dynamics and ii) put on top of our agenda an enhancement of the resilience in face of longer term vulnerabilities. Risk premia move constantly because of changes in fundamental factors as well as in risk appetite. This often smoothly contributes to financial stability. However some characteristics of the present environment could make such adjustments challenging in the future. First, less accommodative global liquidity makes financial market dynamics more complex to predict. Second, bank lending standards might be looser than in a steady state. If credit standards are finally tightened more strongly, this would benefit financial stability in the medium term. But the transition includes challenges for borrowers which have relied on cheap credit in recent years. Third, cyclical lows on financial market volatility might be behind us. Fourth, financial institutions risk management often relies on fragile diversification related assumptions. This makes sense in a stable environment, when correlations do not change quickly. However, diversification might not protect as expected in time of stress. And a quick unwinding of positions is not always possible. Fifth, model risk remains a field where improvements are needed in order to strengthen financial stability over a full financial cycle. The main market related risks, in a context of less ample global liquidity, include changes in risk aversion and risk premia, with the potential for a breakdown in traditional correlations. If significant portfolio reallocation flows take place, market liquidity issues have the potential to transform vulnerabilities into financial instability. These risks might not be perfectly captured by some risk models currently used by financial institutions (including stress-tests). The main financial system related risks include the scenario in which financial institutions would not decrease sufficiently their search for yield in the future, in an environment where higher expected returns could be subject to increased risks. We can certainly envisage an ideal exit scenario in term of financial stability. However, risk premia are not controlled by any single institution and are subject to complex and uncertain dynamics. In fact, financial market dynamics might be more challenging in the future than in recent years. Financial institutions should therefore continuously enhance their resiliency in face of the variety of potential scenarii. The various conditions which can prevail during a full economic and financial cycle need to be seriously taken into account. This means that financial institutions should continue to ensure to avail of sharp risk management practices, emphasising the cases when risks (unfortunately) materialise over the short term, even for those risks which are often relegated to long term scenarii. They should also increase their sensitivity to the potential difficulty of a quick unwinding of some positions in difficult market conditions. The risks, that we highlighted, certainly warrant i), at the micro level, a monitoring of financial institutions risk management and ii), at the macro level, of the dynamics behind potential crowded trades. It is the role of central banks and all public authorities, individually and in co-operation, to foster a risk cycle management oriented attitude, which allows combining the advantages of real and financial innovation with financial stability and sustainable growth.

La gestion des réserves de change et ses conséquences pour les marchés.

Les réserves de change se sont accrues de façon spectaculaire, principalement dans les pays asiatiques. Les modalités de gestion de ces réserves par les banques centrales pourraient avoir un impact sur les marchés financiers.réserves de change, banques centrales asiatiques, diversification, marchés obligataires, gestion de portefeuille.

Observation of Distinct Bulk and Surface Chemical Environments in a Topological Insulator under Magnetic Doping

The influence of magnetic dopants on the electronic and chemical environments in topological insulators (TIs) is a key factor when considering possible spintronic applications based on topological surface state properties. Here we provide spectroscopic evidence for the presence of distinct chemical and electronic behavior for surface and bulk magnetic doping of Bi2Te3. The inclusion of Mn in the bulk of Bi2Te3 induces a genuine dilute ferromagnetic state, with reduction of the bulk band gap as the Mn content is increased. Deposition of Fe on the Bi2Te3 surface, on the other hand, favors the formation of iron telluride already at coverages as low as 0.07 monolayer, as a consequence of the reactivity of the Te-rich surface. Our results identify the factors that need to be controlled in the realization of magnetic nanosystems and interfaces based on TIs

Promoción racional de medicamentos, una necesidad de estos tiempos

La promoción de medicamentos ha constituido un tema de reflexión para aquellos que integran la llamada cadena del medicamento (productor, prescriptor, dispensador y consumidor), si se analiza desde la arista que representan sus intereses. En este trabajo se presentan las principales causas que influyen al hacer uso de los medicamentos, en general, y se destaca las características particulares de la promoción cubana de medicamentos, provocando que se diferencie de lo que sucede en el mundo contemporáneo en esta materia y constituya una herramienta para mantener los logros alcanzados en la calidad de la terapéutica.<br>Drug promotion has been a topic of reflexion for those being part of the so-called drug chain (manufacturer, prescriber, dispenser and consumer), if it is analyzed from the point of view of their interests. The main causes influencing on the use of drugs in general are presented in this paper. Emphasis is made on the particular characteristics of the Cuban drug promotion, which differs from what happens in this sphere in today's world and is a tool to maintain the achievements attained in the quality of therapeutics