Reduction of systemic risk by means of Pigouvian taxation

We analyze the possibility of reduction of systemic risk in financial markets through Pigouvian taxation of financial institutions, which is used to support the rescue fund. We introduce the concept of the cascade risk with a clear operational definition as a subclass and a network related measure of the systemic risk. Using financial networks constructed from real Italian money market data and using realistic parameters, we show that the cascade risk can be substantially reduced by a small rate of taxation and by means of a simple strategy of the money transfer from the rescue fund to interbanking market subjects. Furthermore, we show that while negative effects on the return on investment (ROI) are direct and certain, an overall positive effect on risk adjusted return on investments (ROIRA) is visible. Please note that the taxation is introduced as a monetary/regulatory, not as a _scal measure, as the term could suggest. The rescue fund is implemented in a form of a common reserve fund

Lack of Matrilin-2 Favors Liver Tumor Development via Erk1/2 and GSK-3 beta Pathways In Vivo

Matrilin-2 (Matn2) is a multidomain adaptor protein which plays a role in the assembly of extracellular matrix (ECM). It is produced by oval cells during stem cell-driven liver regeneration. In our study, the impact of Matn2 on hepatocarcinogenesis was investigated in Matn2(-/-) mice comparing them with wild-type (WT) mice in a diethylnitrosamine (DEN) model. The liver tissue was analyzed macroscopically, histologically and immunohistochemically, at protein level by Proteome Profiler Arrays and Western blot analysis. Matn2(-/-) mice exhibited higher susceptibility to hepatocarcinogenesis compared to wild-type mice. In the liver of Matn2(-/-) mice, spontaneous microscopic tumor foci were detected without DEN treatment. After 15 mu g/g body weight DEN treatment, the liver of Matn2(-/-) mice contained macroscopic tumors of both larger number and size than the WT liver. In contrast with the WT liver, spontaneous phosphorylation of EGFR, Erk1/2 GSK-3 alpha/beta and retinoblastoma protein (p-Rb), decrease in p21/CIP1 level, and increase in beta-Catenin protein expression were detected in Matn2(-/-) livers. Focal Ki-67 positivity of these samples provided additional support to our presumption that the lack of Matn2 drives the liver into a pro-proliferatory state, making it prone to tumor development. This enhanced proliferative capacity was further increased in the tumor nodules of DEN-treated Matn2(-/-) livers. Our study suggests that Matn2 functions as a tumor suppressor in hepatocarcinogenesis, and in this process activation of EGFR together with that of Erk1/2, as well as inactivation of GSK-3 beta, play strategic roles

Phosphorylation of Serine 248 of C/EBPα Is Dispensable for Myelopoiesis but Its Disruption Leads to a Low Penetrant Myeloid Disorder with Long Latency

BACKGROUND: Transcription factors play a key role in lineage commitment and differentiation of stem cells into distinct mature cells. In hematopoiesis, they regulate lineage-specific gene expression in a stage-specific manner through various physical and functional interactions with regulatory proteins that are simultanously recruited and activated to ensure timely gene expression. The transcription factor CCAAT/enhancer binding protein α (C/EBPα) is such a factor and is essential for the development of granulocytic/monocytic cells. The activity of C/EBPα is regulated on several levels including gene expression, alternative translation, protein interactions and posttranslational modifications, such as phosphorylation. In particular, the phosphorylation of serine 248 of the transactivation domain has been shown to be of crucial importance for granulocytic differentiation of 32Dcl3 cells in vitro. METHODOLOGY/PRINCIPAL FINDINGS: Here, we use mouse genetics to investigate the significance of C/EBPα serine 248 in vivo through the construction and analysis of Cebpa(S248A/S248A) knock-in mice. Surprisingly, 8-week old Cebpa(S248A/S248A) mice display normal steady-state hematopoiesis including unaltered development of mature myeloid cells. However, over time some of the animals develop a hematopoietic disorder with accumulation of multipotent, megakaryocytic and erythroid progenitor cells and a mild impairment of differentiation along the granulocytic-monocytic lineage. Furthermore, BM cells from Cebpa(S248A/S248A) animals display a competitive advantage compared to wild type cells in a transplantation assay. CONCLUSIONS/SIGNIFICANCE: Taken together, our data shows that the substitution of C/EBPα serine 248 to alanine favors the selection of the megakaryocytic/erythroid lineage over the monocytic/granulocytic compartment in old mice and suggests that S248 phosphorylation may be required to maintain proper hematopoietic homeostasis in response to changes in the wiring of cellular signalling networks. More broadly, the marked differences between the phenotype of the S248A variant in vivo and in vitro highlight the need to exert caution when extending in vitro phenotypes to the more appropriate in vivo context

Endogenous ownership structure:factors affecting the post-privatisation equity in largest Hungarian firms

Using a data set for the 162 largest Hungarian firms during the period of 1994-1999, this paper explores the determinants of equity shares held by both foreign investors and Hungarian corporations. Evidence is found for a post-privatisation evolution towards more homogeneous equity structures, where dominant categories of Hungarian and foreign owners aim at achieving controlling stakes. In addition, focusing on firm-level characteristics we find that exporting firms attract foreign owners who acquire controlling equity stakes. Similarly, firm-size measurements are positively associated with the presence of foreign investors. However, they are negatively associated with 100% foreign ownership, possibly because the marginal costs of acquiring additional equity are growing with the size of the assets. The results are interpreted within the framework of the existing theory. In particular, following Demsetz and Lehn (1985) and Demsetz and Villalonga (2001) we argue that equity should not be treated as an exogenous variable. As for specific determinants of equity levels, we focus on informational asymmetries and (unobserved) ownership-specific characteristics of foreign investors and Hungarian investors

HDAC1 Inactivation Induces Mitotic Defect and Caspase-Independent Autophagic Cell Death in Liver Cancer

Histone deacetylases (HDACs) are known to play a central role in the regulation of several cellular properties interlinked with the development and progression of cancer. Recently, HDAC1 has been reported to be overexpressed in hepatocellular carcinoma (HCC), but its biological roles in hepatocarcinogenesis remain to be elucidated. In this study, we demonstrated overexpression of HDAC1 in a subset of human HCCs and liver cancer cell lines. HDAC1 inactivation resulted in regression of tumor cell growth and activation of caspase-independent autophagic cell death, via LC3B-II activation pathway in Hep3B cells. In cell cycle regulation, HDAC1 inactivation selectively induced both p21WAF1/Cip1 and p27Kip1 expressions, and simultaneously suppressed the expression of cyclin D1 and CDK2. Consequently, HDAC1 inactivation led to the hypophosphorylation of pRb in G1/S transition, and thereby inactivated E2F/DP1 transcription activity. In addition, we demonstrated that HDAC1 suppresses p21WAF1/Cip1 transcriptional activity through Sp1-binding sites in the p21WAF1/Cip1 promoter. Furthermore, sustained suppression of HDAC1 attenuated in vitro colony formation and in vivo tumor growth in a mouse xenograft model. Taken together, we suggest the aberrant regulation of HDAC1 in HCC and its epigenetic regulation of gene transcription of autophagy and cell cycle components. Overexpression of HDAC1 may play a pivotal role through the systemic regulation of mitotic effectors in the development of HCC, providing a particularly relevant potential target in cancer therapy

p21WAF1/CIP1 Upregulation through the Stress Granule-Associated Protein CUGBP1 Confers Resistance to Bortezomib-Mediated Apoptosis

p21(WAF1/CIP1) is a well known cyclin-dependent kinase inhibitor induced by various stress stimuli. Depending on the stress applied, p21 upregulation can either promote apoptosis or prevent against apoptotic injury. The stress-mediated induction of p21 involves not only its transcriptional activation but also its posttranscriptional regulation, mainly through stabilization of p21 mRNA levels. We have previously reported that the proteasome inhibitor MG132 induces the stabilization of p21 mRNA, which correlates with the formation of cytoplasmic RNA stress granules. The mechanism underlying p21 mRNA stabilization, however, remains unknown.We identified the stress granules component CUGBP1 as a factor required for p21 mRNA stabilization following treatment with bortezomib ( =  PS-341/Velcade). This peptide boronate inhibitor of the 26S proteasome is very efficient for the treatment of myelomas and other hematological tumors. However, solid tumors are sometimes refractory to bortezomib treatment. We found that depleting CUGBP1 in cancer cells prevents bortezomib-mediated p21 upregulation. FISH experiments combined to mRNA stability assays show that this effect is largely due to a mistargeting of p21 mRNA in stress granules leading to its degradation. Altering the expression of p21 itself, either by depleting CUGBP1 or p21, promotes bortezomib-mediated apoptosis.We propose that one key mechanism by which apoptosis is inhibited upon treatment with chemotherapeutic drugs might involve upregulation of the p21 protein through CUGBP1

Motif co-regulation and co-operativity are common mechanisms in transcriptional, post-transcriptional and post-translational regulation

A substantial portion of the regulatory interactions in the higher eukaryotic cell are mediated by simple sequence motifs in the regulatory segments of genes and (pre-)mRNAs, and in the intrinsically disordered regions of proteins. Although these regulatory modules are physicochemically distinct, they share an evolutionary plasticity that has facilitated a rapid growth of their use and resulted in their ubiquity in complex organisms. The ease of motif acquisition simplifies access to basal housekeeping functions, facilitates the co-regulation of multiple biomolecules allowing them to respond in a coordinated manner to changes in the cell state, and supports the integration of multiple signals for combinatorial decision-making. Consequently, motifs are indispensable for temporal, spatial, conditional and basal regulation at the transcriptional, post-transcriptional and post-translational level. In this review, we highlight that many of the key regulatory pathways of the cell are recruited by motifs and that the ease of motif acquisition has resulted in large networks of co-regulated biomolecules. We discuss how co-operativity allows simple static motifs to perform the conditional regulation that underlies decision-making in higher eukaryotic biological systems. We observe that each gene and its products have a unique set of DNA, RNA or protein motifs that encode a regulatory program to define the logical circuitry that guides the life cycle of these biomolecules, from transcription to degradation. Finally, we contrast the regulatory properties of protein motifs and the regulatory elements of DNA and (pre-)mRNAs, advocating that co-regulation, co-operativity, and motif-driven regulatory programs are common mechanisms that emerge from the use of simple, evolutionarily plastic regulatory modules

Policy Challenges of Population Aging in Ireland

The projected rise in age-related government spending as a share of GDP in Ireland over the next forty years is among the highest in the euro area. In the absence of reforms, public debt will increase to unsustainable levels. This paper uses the IMF''s Global Fiscal Model to compare the macroeconomic effects of different fiscal strategies to accommodate the rise in age-related spending. The simulations suggest that adopting a package of measures, including an increase in the retirement age, broadening the tax base, and raising indirect taxes, would be a more growth-friendly strategy than relying exclusively on raising the social security contribution rate.Aging;Taxation;Pension regulations;Government expenditures;Public debt;Tax bases;Economic models;pension, pension system, retirement, pensions, retirement age, tax base, fiscal policy, public pension, dependency ratio, public pension system, fiscal adjustment, contribution rate, pension expenditure, fiscal model, fiscal surplus, tax rates, life expectancy, fiscal pressures, government spending, fiscal position, aggregate demand, fiscal measures, contribution rates, payroll taxes, fiscal balance, fiscal sustainability, pension assets, long-term care, health care, income tax base, private pension, long-term projections, pension benefits, tax increases, fiscal affairs department, national pensions, public finances, pension liabilities, budget constraint, early retirement, fiscal strategies, tax rate, fiscal target, fiscal authorities, benefit levels, payroll tax, risk-free rate, flat-rate pension, retirement savings, fiscal saving, accumulated savings, pension benefit, national pensions reserve fund, tax burden, public expenditure, fiscal affairs, public spending, pension age, fiscal structure, pension value, public expenditures, fiscal projections, replacement rates, contributory pension, pay-as-you-go system, fiscal consolidation, savings for retirement, pension systems

Hong Kong SAR

This Occasional Paper provides an overview of the main challenges facing Hong Kong SAR as it continues to become more closely integrated with the mainland of China. Section I provides an overview of recent macroeconomic developments and the main policy issues in Hong Kong SAR. Section II examines various aspects of the ongoing integration with the mainland, and the associated implications for the structure of the economy, and for macroeconomic and structural policies. Section III examines the medium-term fiscal outlook under different policy scenarios and discusses alternative policy options to restore fiscal balance. Section IV reviews recent developments in the real estate sector and their macroeconomic impacts. Section V presents an econome tric analysis of deflation and its determinants. Section VI examines the factors behind, and the implications of, rising wage inequality in Hong Kong SAR. Section VII presents an overview of recent developments in the financial sector and provides an assessment of Hong Kong SAR’s prospects as an international financial center.Economic conditions;Hong Kong SAR;prices, wage, expenditure, wages, government expenditure, banking, employment, expenditures, salaries, shares, price level, money supply, foreign exchange, trading partners, financial system, housing prices, transitory shocks, public expenditures, financial sector, fiscal policy, fiscal consolidation, financial markets, land sales, monetary authority, unemployment, banking system, credit, benefits, public finances, bonds, financial institutions, bond, payments, government expenditures, growth rate, stock market, foreign exchange market, aggregate demand, inflation, skilled employment, total employment, external trade, bank lending, banking sector, clients, public expenditure, fiscal position, tax base, real gdp, gdp growth, expenditure cuts, tax rates, financial stability, financial market, shareholders, economic integration, skilled workers, wage increases, skilled labor, international standards, medium-term projections, dynamic effects, recurrent expenditures, real output, fiscal adjustment, health expenditures, government spending, public spending, fiscal developments, real estate, fiscal outlook, health expenditure, employment shares, unemployment insurance, expenditure areas, public sector wage bill, fiscal revenues, expenditure growth, fiscal deficit, fiscal balance, minimum wages, share of employment, banking institutions, bank profits, investment banking, bond market, financial services, increasing integration, domestic demand, derivatives market, bank products, interbank market, wage policy, compensation, fiscal years, public sector wage, banking activities, bank loans, salary, current account, increased trade, free flow, international capital, liberalization of capital flows, banking market, international financial statistics, domestic bonds, bank regulators, stock exchanges, direct financing, financial conglomerates, international finance corporation, financial intermediaries, real wages, monetary policy, dynamic adjustment, unemployment rate, wage differentials, inflation rate, adjustment process, monetary phenomenon, fixed capital formation, international finance, interest rate derivatives, level playing field, denominated bonds, banking supervision, futures market, portfolio investment, stock market capitalization, international reserves, bank of korea, industry employment shares, bank for international settlements, foreign stock, public sector bonds, international banks, sovereign bonds, financial intermediation, wage adjustments, unemployment rates, settlement system, employment in industry, employment share, banking industry, offshore banking, bank balance sheets, bank loan, income distribution, structural adjustment, prudent fiscal policies, fiscal policies, domestic price, world economy, global market, trading activities, world exports, equity market, balance of payments, bond financing, preferential treatment, competitive advantage, global integration, multinational companies, corporate bonds, government revenue, collateral, stress testing, wage structure, payment system, retirement funds, payroll, salary payments, teacher salaries, worker, trade relations, factor markets, neighboring countries, competitive pressures, trade restrictions, domestic economy, open economy, domestic goods, fiscal structure, stock market movements, budget deficit, consumption expenditure, nominal government expenditures, government budget, discretionary fiscal policy, expenditure parameters, structural fiscal, cutting expenditures, budgetary implications, tax system, fiscal deficits, systemic risk, housing policy, office buildings, private consumption, exchange rate regime, monetary base, commercial space, land prices, gdp growth rate, real property prices, housing units, real property, public subsidies, world trade, trade in services, export growth, domestic investment, world trade organization, merchandise trade, trade growth, export quotas, fiscal situation, budget constraints, expenditure components, increases in tax rates, total public expenditure, tax burden, total expenditures, budget constraint, operating expenditures, government consumption expenditure