Market dynamics associated with credit ratings: a literature review.

Credit ratings produced by the major credit rating agencies (CRAs) aim to measure the creditworthiness, or more specifically the relative creditworthiness of companies, i.e. their ability to meet their debt servicing obligations. In principle, the rating process focuses on the fundamental long-term credit strength of a company. It is typically based on both public and private information, except for unsolicited ratings, which focus only on public information. The basic rationale for using ratings is to achieve information economies of scale and solve principal-agent problems. Partly for the same reasons, the role of credit ratings has expanded significantly over time. Regulators, banks and bondholders, pension fund trustees and other fiduciary agents have increasingly used ratings-based criteria to constrain behaviour. As a result, the influence of the opinions of CRAs on markets appears to have grown considerably in recent years. One aspect of this development is its potential impact on market dynamics (i.e. the timing and path of asset price adjustments, credit spreads, etc.), either directly, as a consequence of the information content of ratings themselves, or indirectly, as a consequence of the “hardwiring” of ratings into regulatory rules, fund management mandates, bond covenants, etc. When considering the impact of ratings and rating changes, two conclusions are worth highlighting. – First, ratings correlate moderately well with observed credit spreads, and rating changes with changes in spreads. However, other factors, such as liquidity, taxation and historical volatility clearly also enter into the determination of spreads. Recent research suggests that reactions to rating changes may also extend beyond the immediately-affected company to its peers, and from bond to equity prices. Furthermore, this price reaction to rating changes seems to be asymmetrical, i.e. more pronounced for downgrades than for upgrades, and may be more significant for equity prices than for bond prices. – Second, the hardwiring of regulatory and market rules, bond covenants, investment guidelines, etc., to ratings may influence market dynamics, and potentially lead to or magnify threshold effects. The more that different market participants adopt identical ratings-linked rules, or are subject to similar ratings-linked regulations, the more “spiky” the reaction to a credit event is likely to be. This reaction may include, in some cases, the emergence of severe liquidity pressures. Efforts have recently been made, notably with support from the rating agencies themselves, to encourage a more systematic disclosure of rating triggers and to renegotiate and smooth the possibly more destabilising forms of rating triggers. However, the lack of a clear disclosure regime makes it difficult to assess how far this process has evolved. Questions also remain as to the extent to which ratings-based criteria introduce a fundamentally new element into market behaviour, or, conversely, the extent to which they are simply a va riant of more traditional contractual covenants. Rating agencies strive to provide credit assessments that remain broadly stable through the course of the business cycle (rating “through the cycle”). Agencies and other analysts frequently contrast the fundamental credit analysis on which ratings are based with market sentiment — measured for example by bond spreads — which is arguably subject to more short-term influences. Agencies are adamant that they do not directly incorporate market sentiment into ratings (although they may use market prices as a diagnostic tool). On the contrary, they make every effort to exclude transient market sentiment. However, as reliance on ratings grows, CRAs are being increasingly expected to satisfy a widening range of constituencies, with different, and even sometimes conflicting, interests: issuers and “traditional” asset managers will look for more than a simple statement of near-term probability of loss, and will stress the need for ratings to exhibit some degree of stability over time. On the other hand, mark-to-market traders, active investors and risk managers may seek more frequent indications of credit changes. Hence, in the wake of major bankruptcies with heightened credit stress, rating agencies have been under considerable pressure to provide higher-frequency readings of credit status, without loss of quality. So far, they have responded to this challenge largely by adding more products to their traditional range, but also through modifications in the rating process. The rating process and the range of products offered by rating agencies have thus evolved over time, with, for instance, an increasing emphasis on the analysis of liquidity risks, a new focus on the hidden liabilities of companies and an increased use of market-based tools. It is too early, however, to judge whether these changes should simply be regarded as a refinement of the agencies’ traditional methodology or whether they suggest a more fundamental shift in the approach to credit risk measurement. For the same reason, it is not possible to draw any firm conclusions about changes in the effects of credit ratings on market dynamics.

Small and Large Faculty-size Adjusted Accounting Program Rankings Based on Research-active Faculty: A Uniform Approach

Prior studies have ranked accounting programs based on the use of various methodologies, many of which did not control for faculty size. Even in studies that controlled for faculty size, a common issue was the inclusion of faculty and PhD students who were not research active. To resolve these sample issues, this study uses a sample of top-6 accounting journal publications over the 2006-2013 period to demonstrate an innovative, efficient, and uniform approach for calculating faculty-size adjusted accounting program rankings. This approach can be modified to include more accounting journals. Specifically, the study controls for faculty size by including only active researchers at each school: that is, authors who published during this period in one or more of the top-6 accounting journals. Consistent with prior studies, the analyses reveal that controlling for faculty size results in statistically significant changes in program rankings. Other study innovations include separate rankings for large (over 13 faculty members) and small (from 3-13 faculty members) accounting programs. Small school rankings, which have not been the focus of prior research, may provide programs with limited size an important measure of their quality that is potentially useful in recruiting faculty and students

Architecture of coatomer: Molecular characterization of delta-COP and protein interactions within the complex

Copyright © 2011 by The Rockefeller University Press.Coatomer is a cytosolic protein complex that forms the coat of COP I-coated transport vesicles. In our attempt to analyze the physical and functional interactions between its seven subunits (coat proteins, [COPs] alpha-zeta), we engaged in a program to clone and characterize the individual coatomer subunits. We have now cloned, sequenced, and overexpressed bovine alpha-COP, the 135-kD subunit of coatomer as well as delta-COP, the 57-kD subunit and have identified a yeast homolog of delta-COP by cDNA sequence comparison and by NH2-terminal peptide sequencing. delta-COP shows homologies to subunits of the clathrin adaptor complexes AP1 and AP2. We show that in Golgi-enriched membrane fractions, the protein is predominantly found in COP I-coated transport vesicles and in the budding regions of the Golgi membranes. A knock-out of the delta-COP gene in yeast is lethal. Immunoprecipitation, as well as analysis exploiting the two-hybrid system in a complete COP screen, showed physical interactions between alpha- and epsilon-COPs and between beta- and delta-COPs. Moreover, the two-hybrid system indicates interactions between gamma- and zeta-COPs as well as between alpha- and beta' COPs. We propose that these interactions reflect in vivo associations of those subunits and thus play a functional role in the assembly of coatomer and/or serve to maintain the molecular architecture of the complex.This work was supported by The Deutsche Forschungsgemeinschaft (SFB 352), the Human Frontier Science Program, and the Swiss National Science Foundation No. 31-43366.95

Characterization of Large Volume 3.5 x 8 inches LaBr3:Ce Detectors

The properties of large volume cylindrical 3.5 x 8 inches (89 mm x 203 mm) LaBr3:Ce scintillation detectors coupled to the Hamamatsu R10233-100SEL photo-multiplier tube were investigated. These crystals are among the largest ones ever produced and still need to be fully characterized to determine how these detectors can be utilized and in which applications. We tested the detectors using monochromatic gamma-ray sources and in-beam reactions producing gamma rays up to 22.6 MeV; we acquired PMT signal pulses and calculated detector energy resolution and response linearity as a function of gamma-ray energy. Two different voltage dividers were coupled to the Hamamatsu R10233-100SEL PMT: the Hamamatsu E1198-26, based on straightforward resistive network design, and the LABRVD, specifically designed for our large volume LaBr3:Ce scintillation detectors, which also includes active semiconductor devices. Because of the extremely high light yield of LaBr3:Ce crystals we observed that, depending on the choice of PMT, voltage divider and applied voltage, some significant deviation from the ideally proportional response of the detector and some pulse shape deformation appear. In addition, crystal non-homogeneities and PMT gain drifts affect the (measured) energy resolution especially in case of high-energy gamma rays. We also measured the time resolution of detectors with different sizes (from 1x1 inches up to 3.5x8 inches), correlating the results with both the intrinsic properties of PMTs and GEANT simulations of the scintillation light collection process. The detector absolute full energy efficiency was measured and simulated up to gamma-rays of 30 Me

Enhancing biosecurity along Uganda’s pig value chains to control and prevent African swine fever

Irish AidInternational Fund for Agricultural Developmen

Spin controlled atom-ion inelastic collisions

The control of the ultracold collisions between neutral atoms is an extensive and successful field of study. The tools developed allow for ultracold chemical reactions to be managed using magnetic fields, light fields and spin-state manipulation of the colliding particles among other methods. The control of chemical reactions in ultracold atom-ion collisions is a young and growing field of research. Recently, the collision energy and the ion electronic state were used to control atom-ion interactions. Here, we demonstrate spin-controlled atom-ion inelastic processes. In our experiment, both spin-exchange and charge-exchange reactions are controlled in an ultracold Rb-Sr$^+$ mixture by the atomic spin state. We prepare a cloud of atoms in a single hyperfine spin-state. Spin-exchange collisions between atoms and ion subsequently polarize the ion spin. Electron transfer is only allowed for (RbSr)$^+$ colliding in the singlet manifold. Initializing the atoms in various spin states affects the overlap of the collision wavefunction with the singlet molecular manifold and therefore also the reaction rate. We experimentally show that by preparing the atoms in different spin states one can vary the charge-exchange rate in agreement with theoretical predictions

40 Gbit/s silicon-organic hybrid (SOH) phase modulator

A 40 Gbit/s electro-optic modulator is demonstrated. The modulator is based on a slotted silicon waveguide filled with an organic material. The silicon organic hybrid (SOH) approach allows combining highly nonlinear electro-optic organic materials with CMOS-compatible silicon photonics technology

A randomized controlled trial assessing the effect of intermittent and abrupt cessation of milking to end lactation on the well-being and intramammary infection risk of dairy cows

The objectives were to compare the effects of an intermittent milking schedule with a thrice daily milking schedule during the final week of lactation on the well-being, udder health, milk production, and risk of culling of dairy cows. We hypothesized that cows subjected to an intermittent milking schedule would experience less udder engorgement and pain, lower concentrations of fecal glucocorticoid metabolites (11,17-dioxoandrostanes; 11,17-DOA concentration) after dry-off, lower risk of an intramammary infection during the dry period, higher milk production and lower somatic cell count in the subsequent lactation, and lower culling risk compared with herd mates milked 3 times daily and dried off by abrupt cessation. In a randomized controlled field study, Holstein cows (n = 398) with a thrice daily milking schedule were assigned to treatment and control groups. The treatment consisted of an intermittent milking schedule for 7 d before dry-off (gradual cessation of milking, GRAD). Gradual-cessation cows were milked once daily until the day of dry-off, whereas cows in the control group (abrupt cessation of milking, APT) were milked 3 times daily until the day of dry-off. Udder firmness and pain responses of the udder 3 d after dry-off, as well as the percentage change in fecal 11,17-DOA concentration (3 d after dry-off compared with the dry-off day), were used to assess the well-being of the animals. Compared with cows in the GRAD group, the odds [95% confidence interval (CI)] of udder firmness were 1.55 (0.99–2.42) for cows in the APT group, and the odds of a pain response were 1.48 (0.89–2.44) for cows in the APT group. The least squares means (95% CI) of the percentage change in 11,17-DOA concentration were 129.3% (111.1–150.4) for the APT group and 113.6% (97.5–132.4) for the GRAD group. Quarter-level culture results from the periods before dry-off and after calving were compared, to assess the likelihoods of microbiological cure and new infection. Cows in the APT group had lower odds of a new intramammary infection in the dry period [odds ratio, 95% CI: 0.63 (0.37–1.05)], whereas we observed no meaningful differences in the microbiological cure likelihood among groups. The least squares means (95% CI) for somatic cell counts (log10-transformed) were 4.9 (4.8–5.0) in the APT group and 4.9 (4.8–5.0) in the GRAD group. The odds (95% CI) of clinical mastitis in the first 30 d postcalving were 1.32 (0.53–3.30) in the APT group compared with the GRAD group. We observed no meaningful differences in milk production at the first test date postcalving or the culling risk among groups. We conclude that the gradual-cessation protocol tested herein failed to significantly improve animal well-being, udder health, milk production, and survival in the tested study cohort. However, the observed differences in udder firmness, as well as the numerical differences in udder pain and the percentage change in fecal 11,17-DOA concentrations suggest that this line of research may be useful. Future research is needed to develop drying-off strategies that are appropriate for lowering milk production at the end of the lactation and improve animal well-being without compromising udder health