The Political Economy of Corporate Governance Change in Bulgaria: Washington Consensus, Primitive Accumulation of Capital, and Catching-Up in the 1990

This study examines three key determinants of corporate governance change in Bulgaria: the Washington Consensus policy, primitive accumulation of capital forces, and 'catching-up' factors. The study reveals that in the early transition (1989-96) primitive capital accumulation prevailed over the Washington Consensus impact on corporate governance transformation while since 1997 Washington Consensus has been in the process of becoming the decisive factor for institutional change. The emerging corporate governance system has been neither Anglo-American (market based) nor bank-based, but rather a 'crony' relationship-based one. The striking features of this system are as follows: (i) a dual enterprise sector, (ii) ownership heterogeneity; (iii) fragile capital markets; (iv) pervasive banks lending behavior; (v) globalization factors discretion. The challenge to policy-makers in Bulgaria is how to design institutions for 'catching-up' that would curb both managerial and globalization factors discretion.

On the optimality of individual entangling-probe attacks against BB84 quantum key distribution

It is shown that an existing method to study ideal individual attacks on the BB84 QKD protocol using error discard can be adapted to reconciliation with error correction, and that an optimal attack can be explicitly found. Moreover, this attack fills Luetkenhaus bound, independently of whether error positions are leaked to Eve, proving that it is tight. In addition, we clarify why the existence of such optimal attacks is not in contradiction with the established ``old-style'' theory of BB84 individual attacks, as incorrectly suggested recently in a news feature.Comment: 12 pages, 3 figure

The persistence of profits in banking: an international comparison

This article examines the dynamics of bank profitability in the USA, Germany, Great Britain, France, Italy and Switzerland over the period 1993-2014. We find long-run bank profit persistence in all six countries in the period before the financial crisis in 2008. Banks with large capital ratios are persistently more profitable, and there is little evidence of a link between bank size and the persistence of bank profits. Commercial (saving) banks are persistently more (less) profitable in four of the six countries. The effects of the financial crisis in 2008 differed dramatically across countries as well as across ownership types. While US banks experienced dramatic declines in the immediate aftermath of the crisis, they recovered much faster than their European counterparts and essentially retain their long run profit potential by the year 2014

Banks-Firms Nexus under the Currency Board: Empirical Evidence from Bulgaria

This study analyses bank lending in the larger context of bank-firm relations within the Bulgarian specificity of currency board. It focuses on the ‘intersection’ of credit supply and demand on the side of banks and firms simultaneously. We suggest both traditional and new hypotheses corresponding to the specific conditions of the Bulgarian ownership change, transitional corruption and other institutional and political factors. The model is based on a survey on Bulgarian banks and a unique database on firms. The study found that the dynamics and structure of credit is affected mainly by the features of the institutional environment, whereas the ‘resource’ and traditional factors became secondary. During the period 1998 – 2001, there is separation of the banking sector activity from the activity of the real sector in Bulgaria. In the new conditions of currency board, the dual sector of enterprises and the specific institutional environment continue their existence. Despite its disciplining effect the currency board by itself is not sufficiently effective to overcome the remaining ‘institutional obstacles, associated mainly with the inefficiency of the judicial system, corruption, state capture, uncertain property rights, etc.corporate governance, bank lending, currency board, corruption, transition economy

Vanishing Integral Relations and Expectation Values for Bloch Functions in Finite Domains

Integral identities for particular Bloch functions in finite periodic systems are derived. All following statements are proven for a finite domain consisting of an integer number of unit cells. It is shown that matrix elements of particular Bloch functions with respect to periodic differential operators vanish identically. The real valuedness, the time-independence and a summation property of the expectation values of periodic differential operators applied to superpositions of specific Bloch functions are derived.Comment: 10 page

Demystifying the Information Reconciliation Protocol Cascade

Cascade is an information reconciliation protocol proposed in the context of secret key agreement in quantum cryptography. This protocol allows removing discrepancies in two partially correlated sequences that belong to distant parties, connected through a public noiseless channel. It is highly interactive, thus requiring a large number of channel communications between the parties to proceed and, although its efficiency is not optimal, it has become the de-facto standard for practical implementations of information reconciliation in quantum key distribution. The aim of this work is to analyze the performance of Cascade, to discuss its strengths, weaknesses and optimization possibilities, comparing with some of the modified versions that have been proposed in the literature. When looking at all design trade-offs, a new view emerges that allows to put forward a number of guidelines and propose near optimal parameters for the practical implementation of Cascade improving performance significantly in comparison with all previous proposals.Comment: 30 pages, 13 figures, 3 table

Attacks on quantum key distribution protocols that employ non-ITS authentication

We demonstrate how adversaries with unbounded computing resources can break Quantum Key Distribution (QKD) protocols which employ a particular message authentication code suggested previously. This authentication code, featuring low key consumption, is not Information-Theoretically Secure (ITS) since for each message the eavesdropper has intercepted she is able to send a different message from a set of messages that she can calculate by finding collisions of a cryptographic hash function. However, when this authentication code was introduced it was shown to prevent straightforward Man-In-The-Middle (MITM) attacks against QKD protocols. In this paper, we prove that the set of messages that collide with any given message under this authentication code contains with high probability a message that has small Hamming distance to any other given message. Based on this fact we present extended MITM attacks against different versions of BB84 QKD protocols using the addressed authentication code; for three protocols we describe every single action taken by the adversary. For all protocols the adversary can obtain complete knowledge of the key, and for most protocols her success probability in doing so approaches unity. Since the attacks work against all authentication methods which allow to calculate colliding messages, the underlying building blocks of the presented attacks expose the potential pitfalls arising as a consequence of non-ITS authentication in QKD-postprocessing. We propose countermeasures, increasing the eavesdroppers demand for computational power, and also prove necessary and sufficient conditions for upgrading the discussed authentication code to the ITS level.Comment: 34 page