Bank holding companies : a better structure for conducting universal banking?

Banking systems in many countries have become increasingly unstable in recent years. At the same time, market forces have pushed banks to expand into a variety of universal banking activities without impairing the stability of the banking system. The basic bank holding company proposal contains three major elements : first, any bank that wants to operate as a universal bank must first form a holding company and then conduct all riskier activities in holding company units rather than directly in the bank. The bank would continue to engage in traditional banking activities that involve the usual level of risk; second, the government would develop laws and regulations designed as safeguards to insulate the bank from any financial problems that might occur in holding company affiliates of the bank; and lastly bank regulatory authorities would impose little or no supervision on holding company units. The use of the bank holding company device to conduct universal banking activities can promise important public benefits including : 1) a sounder commercial banking system; 2) less banking regulation; and 3) greater competitive equality between banking and nonbanking units.Microfinance,Banks&Banking Reform,Financial Intermediation,Private Participation in Infrastructure,Small Scale Enterprise

Are failproof banking systems feasible? Desirable?

In recent years, instability of the banking system has returned as a major problem in many countries, particularly in the developing world. In many cases, this instability has been so threatening to financial intermediation and the functioning of the payments system that governments have felt compelled to intervene and restructure banks, often at considerable cost to the public budget. One response to these problems has been a proposal to create failproof banking systems - to radically transform the structure, priorities, and operation of the banking and financial system. Banks would be limited to issuing deposits, holding essentially riskless portfolios, and operating the payments system. To minimize the resulting disruptions to the financial system, banks would be authorized (and encouraged) to set up holding companies and then transfer to holding company affiliates all the functions - including lending - that banks would no longer be permitted to perform. So while the failproof banking proposal would severely restrict the activity of banks, it would not restrict the activities of banking organizations that convert to a holding company form of organization. This proposal would produce major public benefits. It would assure a nation of a smoothly functioning banking and payments system, would substantially reduce the resources committed to banking supervision, would prevent bank-type regulation from expanding to the rest of the financial system, and would place banking and nonbanking organizations on a level playing field for the financial activities in which they compete. There are two major problems with the proposal. First, it might be difficult to implement because of too few riskless assets in a nation's financial system. (The author suggests several modifications that would alleviate this problem in some countries.) Second, the proposal might hurt the financial market by: (a) increasing interest rates for higher-risk borrowers, forcing them out of the market; and (b) transfering greater risk to the nonbank sector of the financial system, making it more susceptible to crisis. Although the proposal would benefit developing countries (more prone to banking instability) more than industrial countries, it would also be more difficult to implement in developing countries. And the adverse effects of the proposal would be felt more severely in the financial markets of developing countries than in industrial countries, which have deeper, more responsive financial markets.Banks&Banking Reform,Financial Intermediation,Financial Crisis Management&Restructuring,Banking Law,Settlement of Investment Disputes

The Latvian banking crisis : lessons learned

In the spring of 1995, Latvia experienced the largest banking crisis in the Former Soviet Union to date, involving the loss of about 40 percent of the banking system's assets and liabilities. The authors outline the Latvian authorities'strategy for developing the banking system and identify how and why it unraveled. They discuss the World Bank's role and the lessons to be learned from the crisis, including the following: 1) banking systems are exposed to stress in several major ways. Enterprises - the main borrowers - are subject to hard budget constraints and are privatized. Inflation declines so enterprises can't rely on rapidly increasing revenues to service bank debts. Economic reform tends to produce banking systems that are mainly privately owned - making them vulnerable to withdrawals, as the public does not assume that failing banks will be bailed out; 2) the government must protect against this vulnerability by establishing a proper legal framework for banking, developing effective bank supervision and regulation, and implementing solid accounting, disclosure, and auditing standards. It must also develop effective ways to handle problem banks and to close insolvent banks promptly; 3) for banks in the state sector to be a source of strength to the banking system, they must have strong effective management and be relatively free from political influence; 4)"outlier"banks - those expanding assets very quickly or offering particularly high deposit rates - should be subject to intense supervision; and 5) four things must be done to prevent fraud, incompetent management and excessive risk taking: 1) careful screen thosewho want to get into banking; 2) subject all banks to thorough, frequent onsite examinations and assign the best examiners to the largest banks; 3) require annual audits of all banks by reputable auditing firms; and 4) act decisively when fraud or bank difficulties are detected or suspected.Payment Systems&Infrastructure,Banks&Banking Reform,Financial Crisis Management&Restructuring,Financial Intermediation,Labor Policies,Banks&Banking Reform,Financial Intermediation,Financial Crisis Management&Restructuring,Municipal Financial Management,Settlement of Investment Disputes

Deposit insurance in developing countries

About a dozen developing countries have deposit insurance systems and several others are considering establishing them. These systems are typically created to prevent contagious bank runs, to provide a formal national mechanism for handling failing banks, and to protect small depositors from losses when banks fail. Without a deposit insurance system, many developing nations in recent years have extended implicit deposit protection to depositors on a discretionary, ad hoc basis. Deposit insurance systems have several advantages over these implicit protection schemes. Deposit insurance probably gives the banking system more protection against bank runs, provides more protection for small depositors, and provides a faster, smoother administrative process. On the other hand, deposit insurance probably creates more moral hazard for depositors, thereby contributing to the erosion of market discipline and increased bank risk-taking. Deposit insurance also tends to be a more expensive mechanism for protecting depositors because it offers less freedom of action to policymakers than an implicit scheme. Finally, developing countries often do not adequately fund their deposit insurance schemes. As a result, the systems often lack credibility in the marketplace and bank supervisors may be unable to close insolvent banks because the insurer would be unable to pay off insured depositors.Banks&Banking Reform,Financial Crisis Management&Restructuring,Insurance&Risk Mitigation,Financial Intermediation,Insurance Law

Capital inflow reversals, banking stability, and prudential regulation in Central and Eastern Europe

The authors show that capital inflows into the countries of Central and Eastern Europe (CEE)--inflows that are mainly private, debt-driven, and increasingly supplied by banks on a shortening maturity--are especially vulnerable to reversals. They show that the region's banking systems are disproportionately exposed to those reversals, and absorb the lion's share of bank-supplied inflows. They analyze the main links through which external finance turbulence is transmitted to the domestic banking industry, especially during the transition. Mechanisms for prudential regulation are in place in the region--and largely mimic the standards directed by the European Union--but the authors argue that these standards are insufficient for CEE countries. They base their arguments not on actual enforcement (a genuine concern) but on the fact that EU banking directives were designed for more stable economies and for banking systems less vulnerable to reversals in capital inflows. A strong case can be made, for CEE countries to overshoot those directives, at least until the transition is complete.Banks&Banking Reform,Payment Systems&Infrastructure,Financial Intermediation,International Terrorism&Counterterrorism,Financial Crisis Management&Restructuring,Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Settlement of Investment Disputes,Financial Crisis Management&Restructuring

Silent Hands: A Leader’s Ability to Create Nonverbal Immediacy

Nonverbal immediacy is a core element of a leader’s ability to lead followers. Nevertheless, there are no empirical studies regarding a link between a leader’s hand gestures and followers’ perceptions of immediacy (attraction to someone) or nonimmediacy (distancing). Guided by Mehrabian’s theory of nonverbal behavior, this study included one independent variable segmented into seven levels (positive hand gestures defined as community hand, humility hands, and steepling hands; three defensive gestures, defined as hands in pocket, arms crossed over chest, and hands behind back; and neutral/no hand gestures) to test for immediacy or nonimmediacy. In this experimental study, participants (n = 300; male = 164; female = 143) were shown one of seven pictures of a leader. Four hypotheses were tested for main and interactional effects and all were supported by the results. Immediate communication received strong support, meaning immediacy on the part of a leader is likely to lead to increased emotional connection to achieve desirable outcomes. This study advances theory from previous research that specific hand gestures are more effective than others at creating immediacy between leaders and followers

Fever in Neoplastic Disease

A comparison is made between incidence of fever in 132 patients with various types of disseminated cancer and 57 patients with diseases other than cancer during a 2- month observation period. Fifty-three febrile episodes were observed in cancer patients. Of these, 15 were of undetermined origin and 6 were noninfectious; none of the episodes occurred immediately following surgery. In the control group of 57 patients, there were 12 febrile episodes; of these, 7 were due to proven bacterial infection, 2 were due lo possible bacterial infection, and 3 were of undetermined etiology. All three febrile episodes in this latter group occurred postoperatively. The pathogenesis of fever is discussed, especially unexplained fever, in the absence of infection. Tissue necrosis, with the release of endogenous pyrogen, is suggested as a pathogenic mechanism in neoplastic fevers. It is of interest that unexplained fever was more prevalent in patients with demonstrable liver metastases. The metabolism of naturally occurring steroid hormones may be impaired by hepatic dysfunction. The role of steroid pyrogens remains undefined. Hepatic dysfunction may be a contributory factor

Bronze monument: the terror of death and its role in The great Gatsby

This thesis is about the way humans cope with death through the lens of F. Scott Fitzgerald’s The Great Gatsby in the wake of war. The thesis contains three chapters all of which work in succession to build a picture of various characters’ death denial. Chapter 2 considers how Nick’s narrative is an attempt to deny death through the ritual of mourning. Chapter 3 analyzes wealth in the novel and its role in striving for immortality. Gatsby transcends the limits of an ordinary life with his interest in opulence, while Nick’s wealth provides a level of privilege that allows for his avoidance of hardship. Chapter 4 examines the novel’s three main female characters: Jordan, Daisy, and Myrtle. The primary goal of this thesis is to demonstrate how the text of Gatsby serves as a piece of meta-fiction that functions in concert with its characters to transcend the limitations of mortality

Those Who Teach Can Do: Skill Development Through Undergraduate Teaching

Upon entering the workforce or progressing into a graduate program, undergraduate students are expected to possess a number of both technical and psychological skills, as well as transferable skills, often termed “soft skills” (Appleby, 2003). In addition to coursework, experience through institutional research or undergraduate teaching may provide the necessary opportunities for development of transferable skills. Research presently supports the idea that undergraduate teaching assistants report the acquisition of professional skills through interactions with students and professors (Fingerson & Culley, 2001). These interactions and responsibilities may create similar effects, in terms of professional skill development, to those expected from performing undergraduate research, such as confident communication and leadership (Shalk et al., 2009). Through work as an undergraduate teaching assistant, it is thought that students will develop key knowledge, skills, and characteristics (KSC’s) identified as essential by potential employers through the U.S. Department of Labor’s Occupational Information Network (Appleby, 2019). The aim of the present study is to measure gains in teaching assistants’ perceptions of their transferable skills and professional abilities. The researchers have constructed a survey intended to assess students’ perceived competencies and expectations of competencies following completion of the teaching assistant experience. Over the course of three semesters the researchers have surveyed students enrolled in an undergraduate teaching assistant practicum. Students receive course credit and, in addition to gaining professional experience, engage in reflection intended to encourage self-evaluation and integration of professional abilities and goals. The constructed survey is based on the work of Appleby (2007; 2019) and it measures perceived competency in the following domains: integrity, attention to detail, dependability, initiative, flexibility, persistence, communication, goal setting, analytical thinking, self-control, stress tolerance and cooperation. Individual difference measures were also captured, for example, Need for Cognition (Cacioppo et al., 1984) and Brief Resilience Scale (Smith et al., 2008). The researchers also created additional questions to assess the impact of the global pandemic. We hypothesize that this scale will effectively capture gains in perceptions of transferable skills and professional abilities following a TA practicum course. We also hypothesize that individual differences, such as resilience and need for cognition may be correlated. This survey has potential for use with diverse groups of teaching assistants in various departments and educational institutions

The state of the Martian climate

60°N was +2.0°C, relative to the 1981–2010 average value (Fig. 5.1). This marks a new high for the record. The average annual surface air temperature (SAT) anomaly for 2016 for land stations north of starting in 1900, and is a significant increase over the previous highest value of +1.2°C, which was observed in 2007, 2011, and 2015. Average global annual temperatures also showed record values in 2015 and 2016. Currently, the Arctic is warming at more than twice the rate of lower latitudes