The transformation of finance in Europe: introduction and overview

This paper introduces the topic of Europe's changing financial landscape and highlights the findings of the contributions to this volume of the EIB Papers. Key points emerging from this overview include: (i) a variety of factors are reshaping Europe's finance, notably the Single Market, EMU, demographic trends, increasing wealth, technological progress, and financial innovation; (ii) further integrating Europe's financial systems, across borders and segments, should significantly increase economic welfare; (iii) although the functions that financial systems perform are being reallocated - implying a move towards the Anglo-Saxon paradigm - banks will remain important and should maintain their comparative advantage in financing small and medium-sized enterprises; (iv) the economic case in favour of a move towards funded pension systems - which would boost capital markets - is not as compelling as often assumed

Fiscal rules and public investment

This paper examines the link between fiscal rules and public investment both normatively and empirically. We first review the arguments for and against including public investment spending in a fiscal deficit rule. We then seek to assess the determinants of public investment, with a special focus on the role of the fiscal rules embodied in EMU. We conclude that there are practical difficulties precluding the introduction of a 'golden rule' and that there is virtually no evidence that EMU would have affected public investment. Therefore, the focus on safeguarding the level of public investment is somewhat misplaced; instead, one should focus on safeguarding its productivity

A primer on public investment in Europe, old and new

We take stock of what is known about public investment in the member states of the European Union, old and new alike. The interesting features about the long-term evolution of public investment have been its downtrend in old EU member states, bar the cohesion countries, and its volatility in new member states. The downtrend in the old member states cannot be traced back to EMU's fiscal rules per se, nor can it be explained by the emergence of innovative financing mechanisms for infrastructure, such as public-private partnerships. Rather, it is the result of drawn-out episodes of fiscal adjustment and consolidation, necessitated by long periods of unsustainable fiscal policies and deterioration of governments' net worth. We also examine the composition of public investment and conclude that only half of it comprises infrastructure investment in EU-15 and in EU-8, with a slightly higher share in the cohesion countries. The share of infrastructure investment, especially in traditional transport and other communications infrastructure, is in EU-8 somewhat higher than in old EU member states, but below the level in the cohesion countries. All this suggests for the new member states that the on-going build-up of their public capital stocks, especially infrastructure capital, requires the safeguarding of sufficient fiscal space to accommodate adequate public investment

Only a mid-life crisis? The future for IFIs in an integrated world

The European Investment Bank (EIB) differs from most other international financial institutions (IFIs) in that it lends in all of its member countries, not only in its poorer members. It does lend throughout the world, but most of its lending is within the European Union (EU). A significant share is within some of the world's wealthiest countries. There is nothing new to this situation, and the EIB has survived as the oldest of the regional IFIs. What has changed is the speed of economic integration in Europe. The Single Market, eliminating barriers to intra-EU trade in financial services, has been put in place, and the end of this year will see the launch of EMU. The question of the appropriate role for the EIB in the next century would seem to be even more challenging than that of other IFIs, operating exclusively in countries where substantial poverty continues to exist (1). Though this paper does not address the particular role of the EIB, this has nonetheless led us back to first principles and a consideration of how IFIs can add value in general. Certainly, this exercise runs the risk of existentialist angst, but when looking to the future we do have to face the possibility that euthanasia may be one of the best solutions to the problems of ageing

On the road to wonderful? Bank restructuring after EMU

Throughout the industrialised world the banking sector has embarked on a programme of restructuring and consolidation. In Japan the severity of the banking crisis has recently forced both the banking sector and the authorities to recognise deep-rooted problems and to take decisive action. In North America, the banking landscape is also undergoing major changes. Segmentation of activities enshrined in the Glass-Steagall act is being reduced and most restrictions to interstate banking consolidation have been abolished. Similar developments also characterise the European banking scene. However, as long as European countries maintained their monetary sovereignty, the scope for cross-border banking consolidation was limited. The introduction of the euro may, therefore, usher a period of restructuring and consolidation in Europe. This paper discusses the restructuring of the banking sector in Europe and how it is affected by EMU. In order to identify the fundamental forces shaping the restructuring process, the next section looks back at the evolution of the banking industry over the last twenty years and how EMU interacts with these forces. Section 3 then focuses on the role of banks, their interaction with the capital markets and some idiosyncrasies of the European banking sector. Section 4 reviews the overall financial performance of banks to diagnose the potential strengths and weaknesses of European banks. Section 5 then turns to the discussion of the recent experience of consolidation and restructuring of the banking system on both sides of the Atlantic Ocean, while Section 6 attempts to map out the likely restructuring of the European banking industry in the coming years

A Service of zbw Does the hedge fund industry deliver alpha? Does the hedge fund industry deliver alpha?

Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract We measure the total-risk-adjusted (as opposed to factor-risk-adjusted) performance of hedge fund indices in well-diversified portfolios. Alpha is defined as the difference between, on the one hand, the average return on a mean-variance efficient portfolio containing exclusively traditional market assets (such as stocks and bonds) and, on the other hand, the average return on a mean-variance efficient portfolio containing traditional market assets and the new asset (such as a hedge fund index), where both portfolios carry the same risk. Alpha is conditioned on this risk level. Outlier-robust mean-variance efficient portfolios are constructed by using Minimum Volume Ellipsoid (MVE) estimates of location and scatter. We find that, between July 1995 and December 2005, the broad Credit Suisse/Tremont hedge index did not deliver statistically significant alpha.

New approach to determine the healthy immune variations by combining clustering methods

Immune-mediated inflammatory diseases are characterized by variability in disease presentation and severity but studying it is a challenging task. Defining the limits of a healthy immune system is therefore a prior step to capture variability in disease conditions. The goal of this study is to characterize the global immune cell composition along with their influencing factors. Blood samples were collected from 2 independent cohorts of respectively 389 (exploratory) and 208 (replication) healthy subjects. Twelve immune cells were measured in blood together with biological parameters. Three complementary clustering approaches were used to evaluate if variability related to the immune cells could be characterized as clusters or as a continuum. Large coefficients of variation confirmed the inter-individual variability of immune cells. Considering all subset variations in an overall analysis, it appeared that the immune makeup was organized as a continuum through the two cohorts. Some intrinsic and environmental factors affected the inter-individual variability of cells but without unveiling separable groups with similar features. This study provides a framework based on complementary clustering approach for analyzing inter-individual variability of immune cells. Our analyses support the absence of clusters in our two healthy cohorts. Also, our study reports some influence of age, gender, BMI, cortisol, season and CMV infection on immune variability.SCOPUS: ar.jinfo:eu-repo/semantics/publishe