Trends in crypto-currencies and blockchain technologies: A monetary theory and regulation perspective

The internet era has generated a requirement for low cost, anonymous and rapidly verifiable transactions to be used for online barter, and fast settling money have emerged as a consequence. For the most part, e-money has fulfilled this role, but the last few years have seen two new types of money emerge. Centralised virtual currencies, usually for the purpose of transacting in social and gaming economies, and crypto-currencies, which aim to eliminate the need for financial intermediaries by offering direct peer-to-peer online payments. We describe the historical context which led to the development of these currencies and some modern and recent trends in their uptake, in terms of both usage in the real economy and as investment products. As these currencies are purely digital constructs, with no government or local authority backing, we then discuss them in the context of monetary theory, in order to determine how they may be have value under each. Finally, we provide an overview of the state of regulatory readiness in terms of dealing with transactions in these currencies in various regions of the world

Should the advanced measurement approach be replaced with the standardized measurement approach for operational risk?

Recently, Basel Committee for Banking Supervision proposed to replace all approaches, including Advanced Measurement Approach (AMA), for operational risk capital with a simple formula referred to as the Standardised Measurement Approach (SMA). This paper discusses and studies the weaknesses and pitfalls of SMA such as instability, risk insensitivity, super-additivity and the implicit relationship between SMA capital model and systemic risk in the banking sector. We also discuss the issues with closely related operational risk Capital-at-Risk (OpCar) Basel Committee proposed model which is the precursor to the SMA. In conclusion, we advocate to maintain the AMA internal model framework and suggest as an alternative a number of standardization recommendations that could be considered to unify internal modelling of operational risk. The findings and views presented in this paper have been discussed with and supported by many OpRisk practitioners and academics in Australia, Europe, UK and USA, and recently at OpRisk Europe 2016 conference in London

Basel II and Operational Risk: Implications for risk measurement and management in the financial sector

This paper proposes a methodology to analyze the implications of the Advanced Measurement Approach (AMA) for the assessment of operational risk put forward by the Basel II Accord. The methodology relies on an integrated procedure for the construction of the distribution of aggregate losses, using internal and external loss data. It is illustrated on a 2x2 matrix of two selected business lines and two event types, drawn from a database of 3000 losses obtained from a large European banking institution. For each cell, the method calibrates three truncated distributions functions for the body of internal data, the tail of internal data, and external data. When the dependence structure between aggregate losses and the non-linear adjustment of external data are explicitly taken into account, the regulatory capital computed with the AMA method proves to be substantially lower than with less sophisticated approaches allowed by the Basel II Accord, although the effect is not uniform for all business lines and event types. In a second phase, our models are used to estimate the effects of operational risk management actions on bank profitability, through a measure of RAROC adapted to operational risk. The results suggest that substantial savings can be achieved through active management techniques, although the estimated effect of a reduction of the number, frequency or severity of operational losses crucially depends on the calibration of the aggregate loss distributions.operational risk management, basel II, advanced measurement approach, copulae, external data, EVT, RAROC, cost-benefit analysis.

JAK1/2 inhibition with baricitinib in the treatment of autoinflammatory interferonopathies

BACKGROUND. Monogenic IFN-mediated autoinflammatory diseases present in infancy with systemic inflammation, an IFN response gene signature, inflammatory organ damage, and high mortality. We used the JAK inhibitor baricitinib, with IFN-blocking activity in vitro, to ameliorate disease. METHODS. Between October 2011 and February 2017, 10 patients with CANDLE (chronic atypical neutrophilic dermatosis with lipodystrophy and elevated temperatures), 4 patients with SAVI (stimulator of IFN genes-associated [STING-associated] vasculopathy with onset in infancy), and 4 patients with other interferonopathies were enrolled in an expanded access program. The patients underwent dose escalation, and the benefit was assessed by reductions in daily disease symptoms and corticosteroid requirement. Quality of life, organ inflammation, changes in IFN-induced biomarkers, and safety were longitudinally assessed. RESULTS. Eighteen patients were treated for a mean duration of 3.0 years (1.5-4.9 years). The median daily symptom score decreased from 1.3 (interquartile range [IQR], 0.93-1.78) to 0.25 (IQR, 0.1-0.63) (P < 0.0001). In 14 patients receiving corticosteroids at baseline, daily prednisone doses decreased from 0.44 mg/kg/day (IQR, 0.31-1.09) to 0.11 mg/kg/day (IQR, 0.02-0.24) (P < 0.01), and 5 of 10 patients with CANDLE achieved lasting clinical remission. The patients' quality of life and height and bone mineral density Z-scores significantly improved, and their IFN biomarkers decreased. Three patients, two of whom had genetically undefined conditions, discontinued treatment because of lack of efficacy, and one CANDLE patient discontinued treatment because of BK viremia and azotemia. The most common adverse events were upper respiratory infections, gastroenteritis, and BK viruria and viremia. CONCLUSION. Upon baricitinib treatment, clinical manifestations and inflammatory and IFN biomarkers improved in patients with the monogenic interferonopathies CANDLE, SAVI, and other interferonopathies. Monitoring safety and efficacy is important in benefit-risk assessment

Ownership and control: dissecting the pyramid

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Ownership and control: dissecting the pyramid

Pyramids, cross-ownership, rings and other complex features are frequent in the European and Japanese industrial world. The dissection of these structures requires a proper measurement of indirect shareholdings. While some authors use the (generally overestimated) data coming from legal ownership declarations, Ellerman (1991) and Flath (1992), Baldone et al. (1997) use the input-output matrix technology applied to raw ownership data. This paper goes a step further by adding control considerations based on the majority voting rule. The analysis moves from integrated ownership towards integrated control (including chain effects), then defines a control ratio for ultimate shareholders of any firm. The methodology is illustrated on Albert Frère's pyramidal empire. By offering a way to evaluate control leverages, this paper provides a useful tool for empirical research in corporate governance.info:eu-repo/semantics/publishe

Control consolidation with a threshold: An algorithm

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The impact of Basle II on internal auditing

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