Financial Intermediation, Competition, and Risk: A General Equilibrium Exposition

We study a simple general equilibrium model in which investment in a risky technology is subject to moral hazard and banks can extract market power rents. We show that more bank competition results in lower economy-wide risk, lower bank capital ratios, more efficient production plans and Pareto-ranked real allocations. Perfect competition supports a second best allocation and optimal levels of bank risk and capitalization. These results are at variance with those obtained by a large literature that has studied a similar environment in partial equilibrium. Importantly, they are empirically relevant, and demonstrate the need of general equilibrium modeling to design financial policies aimed at attaining socially optimal levels of systemic risk in the economy.General Equilibrium;Bank Competition;Market Power Rents;Risk

Capital Regulation, Liquidity Requirements and Taxation in a Dynamic Model of Banking

This paper formulates a dynamic model of a bank exposed to both credit and liquidity risk, which can resolve financial distress in three costly forms: fire sales, bond issuance and equity issuance. We use the model to analyze the impact of capital regulation, liquidity requirements and taxation on banks' optimal policies and metrics of efficiency of intermediation and social value. We obtain three main results. First, mild capital requirements increase bank lending, bank efficiency and social value relative to an unregulated bank, but these benefits turn into costs if capital requirements are too stringent. Second, liquidity requirements reduce bank lending, efficiency and social value significantly, they nullify the benifits of mild capital requirements, and their private and social costs increase monotonically with their stringency. Third, increases in corporate income and bank liabilities taxes reduce bank lending, bank effciency and social value, with tax receipts increasing with the former but decreasing with the latter. Moreover, the effects of an increase in both forms of taxation are dampened if they are jointly implemented with increases in capital and liquidity requirements.Capital requirements;liquidity requirements;taxation of liabilities. JEL Classifications

Flatness optimization of micro-injection moulded parts: The case of a PMMA microfluidic component

Micro-injection moulding (µ-IM) has attracted a lot of interest because of its potential for the production of low-cost, miniaturized parts in high-volume. Applications of this technology are, amongst others, microfluidic components for lab-on-a-chip devices and micro-optical components. In both cases, the control of the part flatness is a key aspect to maintaining the component's functionality. The objective of this work is to determine the factors affecting the flatness of a polymer part manufactured by µ-IM and to control the manufacturing process with the aim of minimizing the in-process part deformation. As a case study, a PMMA microfluidic substrate with overall dimensions of 10 mm diameter and 1 mm thickness was investigated by designing a µ-IM experiment having flatness as the experimental response. The part flatness was measured using a micro-coordinate measuring machine. Finite elements analysis was also carried out to study the optimal ejection pin configuration. The results of this work show that the control of the µ-IM process conditions can improve the flatness of the polymer part up to about 15 µm. Part flatness as low as 4 µm can be achieved by modifying the design of the ejection system according to suggested guideline

Zirconia for protein stabilisation of wines

Backgrounds and Aims:  White wines are stabilised by removing the heat unstable proteins through adsorption by bentonite. Bentonite fining is not an efficient wine processing step and can also remove other wine components. Alternative absorbents are thus sought; zirconium dioxide (zirconia) is recognised as a promising candidate. The aim of this work was to assess the viability of zirconia treatments to stabilise white wines, with particular attention on process development. Methods and Results:  Effective treatment was achieved by enclosing zirconia pellets into a metallic cage submerged in the wine. With this method, the wine could be treated with the adsorbent for the time required for protein stabilisation, and then removed without further manipulation. Zirconia treatments of three unstable wines partially or fully stabilised them without detectable modifications of their physicochemical parameters and colours, apart from the removal of metals and some acids, particularly when wines were treated for long times and with high dosages of the adsorbent. A simple and inexpensive zirconia regeneration method was also developed. Conclusions:  The zirconia application to wine was very effective in removing proteins, and the proposed regeneration procedure could facilitate the uptake and development of zirconia-based solutions for the wine industry. Significance of the Study:  This study confirmed the effectiveness of zirconia in removing wine proteins and demonstrated that the proposed method of application has the potential to become a viable alternative to bentonite

Characterization of the local temperature in space and time around a developing Drosophila embryo in a microfluidic device

This paper characterizes a microfluidic platform that differentially controls the temperature of each half of a living Drosophila melanogaster fruitfly embryo in space and time (E. M. Lucchetta, J. H. Lee, L. A. Fu, N. H. Patel and R. F. Ismagilov, Nature, 2005, 434, 1134-1138). This platform relies on laminar flow of two streams of liquid with different temperature, and on rapid prototyping in polydimethylsiloxane (PDMS). Here, we characterized fluid flow and heat transport in this platform both experimentally and by numerical simulation, and estimated the temperature distribution around and within the embryo by numerical simulation, to identify the conditions for creating a sharper temperature difference (temperature step) over the embryo. Embryos were removed from the device and immunostained histochemically for detection of Paired protein. Biochemical processes are sensitive to small differences in environmental temperature. The microfluidic platform characterized here could prove useful in understanding dynamics of biochemical networks as they respond to changes in temperature

Effects of anisotropic and isotropic LIPSS on polymer filling flow and wettability of micro injection molded parts

In micro injection molding, the specific cavity surface texture and roughness directly influence the polymer flow and the heat transfer between polymer melt and mold. In this work, two different types of laser-induced periodic surface structures, linear and hexagonal, were generated, and their impact on the flow length in micro injection molding was evaluated. A complete investigation of the surface treatment effect on the polymer flow was carried out, comparing the performance of an untreated cavity surface with surfaces modified by LIPSS. The phenomenon was examined by localizing the weld lines created by the polymer flowing in two parallel channels having different surface treatments. Several cavity inserts were treated by varying the LIPSS process parameters to generate surfaces with different micro-and nanostructures directions and periodicity. Furthermore, the paper addresses the hydro-phobicity achieved on the micro molded surfaces replicated from mold inserts with different LIPSS-based surface topography. Mold surfaces with linear and hexagonal LIPSS and the respective molded parts were analyzed by optical profilometry and scanning electron microscopy to characterize the cavity surfaces replication and localize the weld lines on the micro injection molded parts

The Endo-siRNA Pathway Is Essential for Robust Development of the Drosophila Embryo

Background: Robustness to natural temperature fluctuations is critical to proper development in embryos and to cellular functions in adult organisms. However, mechanisms and pathways which govern temperature compensation remain largely unknown beyond circadian rhythms. Pathways which ensure robustness against temperature fluctuations may appear to be nonessential under favorable, uniform environmental conditions used in conventional laboratory experiments where there is little variation for which to compensate. The endo-siRNA pathway, which produces small double-stranded RNAs in Drosophila, appears to be nonessential for robust development of the embryo under ambient uniform temperature and to be necessary only for viral defense. Embryos lacking a functional endo-siRNA pathway develop into phenotypically normal adults. However, we hypothesized that small RNAs may regulate the embryo’s response to temperature, as a ribonucleoprotein complex has been previously shown to mediate mammalian cell response to heat shock. Principal Findings: Here, we show that the genes DICER-2 and ARGONAUTE2, which code for integral protein components of the endo-siRNA pathway, are essential for robust development and temperature compensation in the Drosophila embryo when exposed to temperature perturbations. The regulatory functions of DICER-2 and ARGONAUTE2 were uncovered by using microfluidics to expose developing Drosophila embryos to a temperature step, in which each half of the embryo develops at a different temperature through developmental cycle 14. Under this temperature perturbation, dicer-2 or argonaute2 embryos displayed abnormal segmentation. The abnormalities in segmentation are presumably due to the inability of the embryo to compensate for temperature-induced differences in rate of development and to coordinate developmental timing in the anterior and posterior halves. A deregulation of the length of nuclear division cycles 10–14 is also observed in dicer-2 embryos at high temperatures. Conclusions: Results presented herein uncover a novel function of the endo-siRNA pathway in temperature compensation and cell cycle regulation, and we hypothesize that the endo-siRNA pathway may regulate the degradation of maternal cell cycle regulators. Endo-siRNAs may have a more general role buffering against environmental perturbations in other organisms

Systemic Risks and the Macroeconomy

This paper presents a modeling framework that delivers joint forecasts of indicators of systemic real risk and systemic financial risk, as well as stress-tests of these indicators as impulse responses to structural shocks identified by standard macroeconomic and banking theory. This framework is implemented using large sets of quarterly time series of indicators of financial and real activity for the G-7 economies for the 1980Q1-2009Q3 period. We obtain two main results. First, there is evidence of out-of sample forecasting power for tail risk realizations of real activity for several countries, suggesting the usefulness of the model as a risk monitoring tool. Second, in all countries aggregate demand shocks are the main drivers of the real cycle, and bank credit demand shocks are the main drivers of the bank lending cycle. These results challenge the common wisdom that constraints in the aggregate supply of credit have been a key driver of the sharp downturn in real activity experienced by the G-7 economies in 2008Q4- 2009Q1