The Lender-Borrower Relationship with Risk Averse Lenders

This paper analyzes optimal incentive compatible debt contracts when lenders are risk averse. The decisive factor in this regard is that risk aversion requiresto consider further sources of risk the lenders are exposed to. The main resultsderived in a setting of asymmetric information – the payment obligation ofthe optimal incentive compatible contract increases due to risk aversion oflenders which is reinforced by the introduction of a further source of risk – areshown to be in line with the results from the industrial organization approachof banking. Moreover, the results of the present paper are more general thanthe ones from the industrial organization approach.debt contracts, risk aversion, costly state verification, risk

Credit Risk, Credit Rationing, and the Role of Banks: The Case of Risk Averse Lenders

The standard situation of ex post information asymmetry between borrowers and lenders is extended by risk aversion and heterogenous levels of reservation utility of lenders. In a situation of direct contracting optimal incentive compatible contracts are valuable for both, borrowers and lenders. However, there may appear credit rationing as a consequence of borrowers optimal decision making. Introducing a bank into the market increases total wealth due to the appearance of a portfolio effect in the sense of first order stochastic dominance. It can be shown that this effect may even reduce the problem of credit rationing provided it is sufficiently strong.risk aversion, costly state verification, credit rationing, bank

Is Actin Filament and Microtubule Growth Reaction- or Diffusion-Limited?

Inside cells of living organisms, actin filaments and microtubules self-assemble and dissemble dynamically by incorporating actin or tubulin from the cell plasma or releasing it into their tips' surroundings. Such reaction-diffusion systems can show diffusion- or reaction-limited behaviour. However, neither limit explains the experimental data: while the offset of the linear relation between growth speed and bulk tubulin density contradicts the diffusion limit, the surprisingly large variance of the growth speed rejects a pure reaction limit. In this Letter, we accommodate both limits and use a Doi-Peliti field-theory model to estimate how diffusive transport is perturbing the chemical reactions at the filament tip. Furthermore, a crossover bulk density is predicted at which the limiting process changes from chemical reactions to diffusive transport. In addition, we explain and estimate larger variances of the growth speed

Direct and noisy transitions in a model shear flow

The transition to turbulence in flows where the laminar profile is linearly stable requires perturbations of finite amplitude. "Optimal" perturbations are distinguished as extrema of certain functionals, and different functionals give different optima. We here discuss the phase space structure of a 2-d simplified model of the transition to turbulence and discuss optimal perturbations with respect to three criteria: energy of the initial condition, energy dissipation of the initial condition and amplitude of noise in a stochastic transition. We find that the states that trigger the transition are different in the three cases, but show the same scaling with Reynolds number

First Application of Pulse-Shape Analysis to Silicon Micro-Strip Detectors

The method of pulse-shape analysis (PSA) for particle identification (PID) was applied to a double-sided silicon strip detector (DSSD) with a strip pitch of 300 \{mu}m. We present the results of test measurements with particles from the reactions of a 70 MeV 12C beam impinging on a mylar target. Good separation between protons and alpha particles down to 3 MeV has been obtained when excluding the interstrip events of the DSSD from the analysis.Comment: 7 pages, 6 figures, submitted to Nuclear Inst. and Methods in Physics Research

Hedging with Credit Derivatives and its Strategic Role in Banking Competition

The tremendous growth of markets for credit derivatives since the mid 1990's has raised questions regarding the role of these instruments in the banking industry which is heavily exposed to credit risk. However, while recent literature mainly focused on pricing and optimal decisions regarding volumes of credit derivatives the present paper centers the strategic role of these instruments in the competition between banking firms. We use a duopolistic version of the industrial organization approach to banking to find out that credit derivatives may influence banking competition. For this result to hold observability of the volume of credit derivatives held by banks is not necessary.bank, risk, duopoly, hedging

Credit Risk and Credit Derivatives in Banking

Using the industrial economics approach to the microeconomics of banking we analyze a large bank under credit risk. Our aim is to study how a risky loan portfolio affects optimal bank behavior in the loan and deposit markets, when credit derivatives to hedge credit risk are available. We examine hedging without and with basis risk. In the absence of basis risk the usual separation result is confirmed. In case of basis risk, however, we find a weaker notion of separation.credit risk, credit derivatives, banking firm, risk aversion

ORK1, a potassium-selective leak channel with two pore domains cloned from Drosophila melanogaster by expression in Saccharomyces cerevisiae.

A K+ channel gene has been cloned from Drosophila melanogaster by complementation in Saccharomyces cerevisiae cells defective for K+ uptake. Naturally expressed in the neuromuscular tissues of adult flies, this gene confers K+ transport capacity on yeast cells when heterologously expressed. In Xenopus laevis oocytes, expression yields an ungated K(+)-selective current whose attributes resemble the "leak" conductance thought to mediate the resting potential of vertebrate myelinated neurons but whose molecular nature has long remained elusive. The predicted protein has two pore (P) domains and four membrane-spanning helices and is a member of a newly recognized K+ channel family. Expression of the channel in flies and yeast cells makes feasible studies of structure and in vivo function using genetic approaches that are not possible in higher animals