Essays in Efficiency and Stability of the Banking Sector

This thesis contributes via the concept of efficiency in four distinct fields of the fi nancial economics and banking literature: technological heterogeneity, liquidity creation, profitability, and stability of banks. In Chapter 1 we motivate the analysis by presenting the main developments that have been taking place in the banking sector as far as these four elds are concerned and highlight their importance to the appropriate functioning of the nancial system and of the economy overall. In Chapter 2 we address the issue that conventional surveys on bank efficiency draw conclusions based on the assumption that all banks in a sample use the same production technology. However, efficiency estimates can be severely distorted if the existence of unobserved differences in technological regimes is not taken into consideration. We estimate the unobserved heterogeneity in banking technologies using a latent class stochastic frontier model. In order to arrive at a policy implication that is valid across time and markets, we present two applications of the model using separately data from the UK and Greek banking sector over the periods 1987-2011 and 1993-2011 respectively. To increase the precision of our inferences, we adopt two distinct empirical methodologies: a panel data method and a pooled cross-section modelling strategy. Our results reveal that bank-heterogeneity in both banking sectors can be controlled for two technological regimes. We find a trade-o¤ between the level of sophistication within a fi nancial system and its level of aggregate efficiency. Consistency among the results is established under both methodologies. Further, we propose a methodology with regard to M&As activity of UK and Greek banks within a latent class context. We examine numerous potential M&A scenarios among banks that belong to different technological regimes, and we test whether there is a transition of the new banks to a more efficient technological class resulting from this M&A activity. We find strong evidence that new financial institutions can be better equipped to withstand potential adverse economic conditions. Finally, we cast doubt on what the true motivation for M&A activity is and we extract important policy inferences in terms of social welfare. In Chapter 3 we introduce the "Cost Efficiency - Liquidity Creation Hypothesis" (CELCH) according to which a rise in a bank s cost efficiency level increases its level of liquidity creation. By employing a novel stress test scenario under a PVAR methodology, we test the CELCH and the direction of causality among liquidity creation and cost efficiency variables in the UK and Greek banking sector. Moreover using new measures of liquidity creation (Berger and Bouwman, 2009) we address the question of whether potential M&As can enhance liquidity creation and create additional credit channels in the economy. We evaluate and compare the robustness of potential consolidation scenarios by employing half - life measures (Chortareas and Kapetanios 2013). We show a positive impact of cost efficiency on liquidity creation in line with CELCH. The empirical evidence further suggests that potential consolidation activity can enhance the ow of credit in the economy. Bank shocks seem to be the most persistent on both liquidity creation and cost efficiency and the UK banking system is found to withstand more effectively adverse economic conditions. Finally, we cast doubts on the strategy followed by policy authorities regarding the recent wave of M&As in the Greek banking sector. In Chapter 4, we attempt to shed light on the trade-o¤ between fi nancial stability and efficiency. We highlight that current tests of banking efficiency do not take into account whether banks managers are taking too much or too little risk relative to the value maximising amount. We assume that moving from an intermediary bank type balance sheet to an investment bank type not only changes the risk-return combination of the balance sheet but also increases the banks degree of instability, that is the probability of insolvency when adverse effects occur. To this extent, we propose a new efficiency measure which incorporates all the aforementioned ambiguous points. An empirical investigation of US commercial banks between 2003-2012 suggests that our proposed risk-adjusted index has superior explanatory power with respect to banks profi tability and gives better predictions compared to conventional banking efficiency measures. This holds after various robustness checks. Chapter 5 summarizes the main findings of all three distinct studies and concludes by highlighting the importance and the contributing points of the thesis in the banking and financial economics literature

Technical Note: Determination of the SCS initial abstraction ratio in an experimental watershed in Greece

International audienceThe present study was conducted in an experimental watershed in Attica, Greece, using observed rainfall/runoff events. The objective of the study was the determination of the initial abstraction ratio of the watershed. The average ratio (Ia/S) of the entire watershed was equal to 0.014. The corresponding ratio at a subwatershed was 0.037. The difference was attributed to the different spatial distribution of landuses and geological formations at the extent of the watershed. Both of the determined ratios are close to the ratio value of 0.05 that has been suggested from many studies for the improvement of the SCS-CN method

John C. Carapanayiotis (1909. – 1999.): grčki radiolog i pionir fizijatrije u Grčkoj

John C. Carapanayiotis was specialized in physical medicine and rehabilitation in the USA in 1948, at a time when the medical world in post-war Greece was ignorant of this specific medical specialty, and the political, economic and social backdrop was incapable of accepting and understanding the wealth of scientific knowledge that he was trying to introduce. At this point it should be noted that the specialty of Physical Medicine and Rehabilitation was established in Greece in 1973. John C. Carapanayiotis was a member of the American Congress of Physical Medicine during the 1950’s. In the same period, he expressed interest, on behalf of the New York University, in the establishment of a Physical Therapy Clinic in Greece, which would be granted unlimited funding by the Marshal Plan. His efforts clashed constantly with the backward mentality of his time, with the entrenched conservatism and with the bureaucratic red tape. Unfortunately, he was far ahead of his time and was condemned to the same fate as all other visionaries and pioneers in the way that his knowledge and scientific background were not put into practice for decades to come.John C. Carapanayiotis specijalizirao je fizikalnu medicine i rehabilitaciju 1948. u SAD-u, u vrijeme kada medicinski svijet u poslijeratnoj Grčkoj još nije bio upoznat s ovom specifičnom medicinskom specijalizacijom, a politička, ekonomska i društvena pozadina nije bila spremna prihvatiti bogatstvo znanstvenih spoznaja koje je pokušavao uvesti. Specijalizacija fizikalne medicine i rehabilitacije u Grčkoj je osnovana 1973. godine. John C. Carapanayiotis bio je član Američkog kongresa fizikalne medicine tijekom 1950-ih. U istom je razdoblju izrazio zainteresiranost, u ime Sveučilišta u New Yorku, za osnivanje Klinike za fizikalnu terapiju u Grčkoj, kojoj bi Marshallovim planom bilo odobreno neograničeno financiranje. Njegovi su se napori stalno sukobljavali s nazadnim mentalitetom njegova vremena, s ukorijenjenim konzervativizmom i birokracijom. Bio je daleko ispred svoga vremena, osuđen na sudbinu svih ostalih vizionara i pionira kojima se znanje i znanstvena pozadina nisu primjenjivali još desetljećima

The use of digital technologies by small and medium enterprises during COVID-19: Implications for theory and practice

Scholars have highlighted the role of Digital Technologies (DT) in enhancing productivity and performance in Small and Medium Enterprises (SMEs). However, there is limited evidence on the use of DT for dealing with the consequences of extreme events, such as COVID-19. We discuss this gap by (i) outlining potential research avenues and (ii) reflecting on the managerial implications of using DT within SMEs to deal with the repercussions of COVID-19 and securing business continuity

Liquidity creation through efficient M&As: A viable solution for vulnerable banking systems? Evidence from a stress test under a panel VAR methodology

According to the “cost efficiency - liquidity creation” hypothesis (CELCH), introduced in this paper, a rise in a bank’s cost efficiency level increases its liquidity creation. By employing a novel stress test scenario under a panel VAR methodology, the CELCH and the direction of causality between liquidity creation and cost efficiency are tested. Moreover, using new measures of liquidity creation (Berger and Bouwman, 2009), the question of whether potential bank mergers and acquisitions (M&As) can enhance liquidity creation and generate additional credit channels in the economy is addressed. The robustness of potential consolidation scenarios are evaluated and compared through the use of new “half-life” measures (Chortareas and Kapetanios, 2013). In line with CELCH, the positive impact of cost efficiency on liquidity creation is shown. The empirical evidence further suggests that potential consolidation activity can enhance the flow of credit in the economy. Bank shocks seem to have the most persistent effect on both liquidity creation and cost efficiency. Finally, doubts are cast on the strategies followed by policy authorities regarding the recent wave of M&As in the banking sector

Diagnostic accuracy of the Abbott ID NOW SARS-CoV-2 rapid test for the triage of acute medical admissions

Background: Decisions to isolate patients at risk of having coronavirus disease 2019 (COVID-19) in the emergency department (ED) must be rapid and accurate to ensure prompt treatment and maintain patient flow whilst minimising nosocomial spread. Reverse transcription polymerase chain reaction (RT-PCR) assays are too slow to achieve this, and near-patient testing is being used increasingly to facilitate triage. The ID NOW severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) assay is an isothermal nucleic acid amplification near-patient test which targets the RNA-dependent RNA-polymerase gene. Aim: To assess the diagnostic performance of ID NOW as a COVID-19 triage tool for medical admissions from the ED of a large acute hospital. Methods: All adult acute medical admissions from the ED between 31st March and 31st July 2021 with valid ID NOW and RT-PCR results were included. The diagnostic accuracy of ID NOW [sensitivity, specificity, positive predictive value (PPV) and negative predictive value (NPV)] was calculated against the laboratory reference standard. Discrepant results were explored further using cycle threshold values and clinical data. Findings: Two percent (124/6050) of medical admissions were SARS-CoV-2 positive on RT-PCR. Compared with PCR, ID NOW had sensitivity and specificity of 83.1% [95% confidence interval (CI) 75.4–88.7] and 99.5% (95% CI 99.3–99.6), respectively. PPV and NPV were 76.9% (95% CI 69.0–83.2) and 99.6% (95% CI 99.5–99.8), respectively. The median time from arrival in the ED to ID NOW result was 59 min. Conclusion: ID NOW provides a rapid and reliable adjunct for the safe triage of patients with COVID-19, and can work effectively when integrated into an ED triage algorithm

Battery and hydrogen energy storage control in a smart energy network with flexible energy demand using deep reinforcement learning

Smart energy networks provide an effective means to accommodate high penetrations of variable renewable energy sources like solar and wind, which are key for the deep decarbonisation of energy production. However, given the variability of the renewables as well as the energy demand, it is imperative to develop effective control and energy storage schemes to manage the variable energy generation and achieve desired system economics and environmental goals. In this paper, we introduce a hybrid energy storage system composed of battery and hydrogen energy storage to handle the uncertainties related to electricity prices, renewable energy production, and consumption. We aim to improve renewable energy utilisation and minimise energy costs and carbon emissions while ensuring energy reliability and stability within the network. To achieve this, we propose a multi-agent deep deterministic policy gradient approach, which is a deep reinforcement learning-based control strategy to optimise the scheduling of the hybrid energy storage system and energy demand in real time. The proposed approach is model-free and does not require explicit knowledge and rigorous mathematical models of the smart energy network environment. Simulation results based on real-world data show that (i) integration and optimised operation of the hybrid energy storage system and energy demand reduce carbon emissions by 78.69%, improve cost savings by 23.5%, and improve renewable energy utilisation by over 13.2% compared to other baseline models; and (ii) the proposed algorithm outperforms the state-of-the-art self-learning algorithms like the deep-Q network

Post-vaccination COVID-19: A case-control study and genomic analysis of 119 breakthrough infections in partially vaccinated individuals

BACKGROUND: Post-vaccination infections challenge the control of the COVID-19 pandemic. METHODS: We matched 119 cases of post-vaccination SARS-CoV-2 infection with BNT162b2 mRNA, or ChAdOx1 nCOV-19, to 476 unvaccinated patients with COVID-19 (Sept 2020-March 2021), according to age and sex. Differences in 60-day all-cause mortality, hospital admission, and hospital length of stay were evaluated. Phylogenetic, single nucleotide polymorphism (SNP) and minority variant allele (MVA) full genome sequencing analysis was performed. RESULTS: 116/119 cases developed COVID-19 post first vaccination dose (median 14 days, IQR 9 - 24 days). Overall, 13/119 (10∙9%) cases and 158/476 (33∙2%) controls died (p<0.001), corresponding to 4∙5 number needed to treat (NNT). Multivariably, vaccination was associated with 69∙3% (95%CI 45∙8 - 82∙6) relative risk (RR) reduction in mortality. Similar results were seen in subgroup analysis for patients with infection onset ≥14 days after first vaccination (RR reduction 65∙1%, 95%CI 27∙2 - 83∙2, NNT 4∙5), and across vaccine subgroups (BNT162b2: RR reduction 66%, 95%CI 34∙9 - 82∙2, NNT 4∙7, ChAdOx1: RR reduction 78∙4%, 95%CI 30∙4 - 93∙3, NNT 4∙1). Hospital admissions (OR 0∙80, 95%CI 0∙51 - 1∙28), and length of stay (-1∙89 days, 95%CI -4∙57 - 0∙78) were lower for cases, while Ct values were higher (30∙8 versus 28∙8, p = 0.053). B.1.1.7 was the predominant lineage in cases (100/108, 92.6%) and controls (341/446, 76.5%). Genomic analysis identified one post-vaccination case harboring the E484K vaccine escape mutation (B.1.525 lineage). CONCLUSIONS: Previous vaccination reduces mortality when B.1.1.7 is the predominant lineage. No significant lineage-specific genomic changes during phylogenetic, SNP and MVA analysis were detected