The major supervisory initiatives post-FDICIA: Are they based on the goals of PCA? Should they be?

The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit insurance system.Federal Deposit Insurance Corporation Improvement Act of 1991 ; Financial institutions ; Deposit insurance ; Bank supervision

Reforming deposit insurance and FDICIA

Current discussions about deposit insurance reform center on issues such as the size of insurance premiums, the size of the fund, and the size of the coverage limits-all issues that reflect a concern with how to allocate the losses arising from bank failures. The authors of this article argue that such issues, while important, do not affect the performance of the deposit insurance system nor should they be the focus of deposit insurance reform. They suggest that reform efforts should be directed toward strengthening the incentives to enforce the least cost resolution provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). ; The authors make the case that the large losses the FDIC has borne with some bank failures were due to supervisory forbearance. They suggest that a useful step forward would be to carry out FDICIA's mandate to develop and implement market value-type disclosures of the value of banks' assets and liabilities. Increasing the transparency of bank risk taking, as academics have long argued, would improve regulators' ability to monitor bank risk exposure. These reforms, combined with a different approach to risk-based premiums and measures to strengthen market discipline, such as expanded use of subordinated debt, merit further consideration as potential partial solutions to the problem of implementing FDICIA.Bank supervision ; Deposit insurance

Financial regulatory structure and the resolution of conflicting goals

The debate over modernizing the financial structure is raising questions about the merits of modernizing the financial regulatory structure. Regulatory structure is important because an almost unavoidable feature of our current system of government is that Congress assigns multiple goals that sometimes have conflicting policy implications to the regulatory agencies. The structure of the agencies is important to the resolution of these conflicts. Responsibility for two or more goals that have conflicting implications may be assigned to a single agency that is likely to resolve the conflict with a consistent set of policies based on the agency's priorities. Alternatively, the goals may be assigned to more than one agency, an action that often results in the conflicts being debated in the public arena but that may also result in the agencies' implementing inconsistent policies. This paper uses the problem of goal conflicts to provide a framework for evaluating alternative regulatory structures.Banks and banking ; Banking structure

Resolving large financial intermediaries: banks versus housing enterprises

This paper examines the policy issues with respect to resolving the possible failure of housing enterprises Fannie Mae or Freddie Mac. The authors compare and contrast these issues with those raised in the context of large bank failures and also identify important differences in the extant supervisory authorities. Based on these discussions, they offer a number of policy suggestions designed to minimize the cost of resolution and protect taxpayers from loss should a large bank or housing enterprise fail.

An analysis of the systemic risks posed by Fannie Mae and Freddie Mac and an evaluation of the policy options for reducing those risks

Fannie Mae and Freddie Mac are government-sponsored enterprises that are central players in U.S. secondary mortgage markets. Over the past decade, these institutions have amassed enormous mortgage- and non-mortgage-oriented investment portfolios that pose significant interest-rate risks to the companies and a systemic risk to the financial system. This paper describes the nature of these risks and systemic concerns and then evaluates several policy options for reducing the institutions’ investment portfolios. We conclude that limits on portfolio size (assets or liabilities) would be the most desirable approach to mitigating the systemic risk posed by Fannie Mae and Freddie Mac.

Model of Transcriptional Activation by MarA in Escherichia coli

We have developed a mathematical model of transcriptional activation by MarA in Escherichia coli, and used the model to analyze measurements of MarA-dependent activity of the marRAB, sodA, and micF promoters in mar-rob- cells. The model rationalizes an unexpected poor correlation between the mid-point of in vivo promoter activity profiles and in vitro equilibrium constants for MarA binding to promoter sequences. Analysis of the promoter activity data using the model yielded the following predictions regarding activation mechanisms: (1) MarA activation of the marRAB, sodA, and micF promoters involves a net acceleration of the kinetics of transitions after RNA polymerase binding, up to and including promoter escape and message elongation; (2) RNA polymerase binds to these promoters with nearly unit occupancy in the absence of MarA, making recruitment of polymerase an insignificant factor in activation of these promoters; and (3) instead of recruitment, activation of the micF promoter might involve a repulsion of polymerase combined with a large acceleration of the kinetics of polymerase activity. These predictions are consistent with published chromatin immunoprecipitation assays of interactions between polymerase and the E. coli chromosome. A lack of recruitment in transcriptional activation represents an exception to the textbook description of activation of bacterial sigma-70 promoters. However, use of accelerated polymerase kinetics instead of recruitment might confer a competitive advantage to E. coli by decreasing latency in gene regulation.Comment: 30 pages, 2 figure

Time-Domain Separation of Optical Properties From Structural Transitions in Resonantly Bonded Materials

The extreme electro-optical contrast between crystalline and amorphous states in phase change materials is routinely exploited in optical data storage and future applications include universal memories, flexible displays, reconfigurable optical circuits, and logic devices. Optical contrast is believed to arise due to a change in crystallinity. Here we show that the connection between optical properties and structure can be broken. Using a unique combination of single-shot femtosecond electron diffraction and optical spectroscopy, we simultaneously follow the lattice dynamics and dielectric function in the phase change material Ge2Sb2Te5 during an irreversible state transformation. The dielectric function changes by 30% within 100 femtoseconds due to a rapid depletion of electrons from resonantly-bonded states. This occurs without perturbing the crystallinity of the lattice, which heats with a 2 ps time constant. The optical changes are an order-of-magnitude larger than those achievable with silicon and present new routes to manipulate light on an ultrafast timescale without structural changes

Whole-genome sequence analysis shows that two endemic species of North American wolf are admixtures of the coyote and gray wolf.

Protection of populations comprising admixed genomes is a challenge under the Endangered Species Act (ESA), which is regarded as the most powerful species protection legislation ever passed in the United States but lacks specific provisions for hybrids. The eastern wolf is a newly recognized wolf-like species that is highly admixed and inhabits the Great Lakes and eastern United States, a region previously thought to be included in the geographic range of only the gray wolf. The U.S. Fish and Wildlife Service has argued that the presence of the eastern wolf, rather than the gray wolf, in this area is grounds for removing ESA protection (delisting) from the gray wolf across its geographic range. In contrast, the red wolf from the southeastern United States was one of the first species protected under the ESA and was protected despite admixture with coyotes. We use whole-genome sequence data to demonstrate a lack of unique ancestry in eastern and red wolves that would not be expected if they represented long divergent North American lineages. These results suggest that arguments for delisting the gray wolf are not valid. Our findings demonstrate how a strict designation of a species under the ESA that does not consider admixture can threaten the protection of endangered entities. We argue for a more balanced approach that focuses on the ecological context of admixture and allows for evolutionary processes to potentially restore historical patterns of genetic variation

Science to Service Academic Program of Distinction: Proposal

A low level of scientific knowledge among the U.S. population has considerably hindered its economic preeminence and social development. Science to Serve is a distinctive framework at GCSU that embraces a significant number of formal and informal interdisciplinary practices with the single purpose of advancing the interest, engagement, and understanding of science and technology by people of all ages and backgrounds. That is, Science to Serve aims to make science “real” to those who might not ordinarily be engaged so that they see the role of science to life, in education, and to the economy. Primary support for this unique framework comes from the Office of Academic Outreach, the Department Biological &Environmental Sciences, the Department of Chemistry & Physics, the Science Education Center, and faculty from Middle Grades Education. This rich tradition of effectively communicating and instilling the usefulness of science to diverse communities has resulted in an impressive host of resources, programs, courses, and activities that are cross-disciplinary in scope. Science to Serve garners broad-based support from the university community and myriad constituencies beyond the campus with faculty and students of all majors serving as ambassadors of science. Partnerships with key statewide and national organizations have further strengthened this initiative and external funding has exceeded $2 million to date. For a relatively small liberal arts university in a rural location, this remarkably large number of resources focused on civic engagement through science is extraordinary. The Science to Serve framework will provide a cohesive, coherent and comprehensive structure that will greatly enhance opportunities for acquiring external support if selected as one of GCSU’s academic programs of distinctio