Bank capital regulation with and without state-contingent penalties

A moral hazard model with exogenous bank franchise value is used to analyze bank capital regulation. Banks choose their capital structure as well as the riskiness and mean of their portfolio. The portfolio mean is determined by the level of costly screening. Screening and portfolio risk are private information, so there are two dimensions to the moral hazard problem. Deposit insurance gives banks an incentive to hold less capital, and to choose a higher-risk, lower-mean portfolio. To mitigate these incentives, capital requirements with and without ex post fines are studied. We find an endogenous reverse mean-variance trade-off in banks' portfolios. Prudent banks choose high-screening, low-risk portfolios and are virtually self regulating. Imprudent banks choose low-screening, high-risk portfolios. Without state-contingent penalties, optimal capital regulations are often V-shaped in bank franchise value. Adding state-contingent regulation can significantly lower capital requirements. Optimal state-contingent regulations are characterized by fines on extreme right-hand-tail returns.Bank capital

Progress toward a Soft X-ray Polarimeter

We are developing instrumentation for a telescope design capable of measuring linear X-ray polarization over a broad-band using conventional spectroscopic optics. Multilayer-coated mirrors are key to this approach, being used as Bragg reflectors at the Brewster angle. By laterally grading the multilayer mirrors and matching to the dispersion of a spectrometer, one may take advantage of high multilayer reflectivities and achieve modulation factors over 50% over the entire 0.2-0.8 keV band. We present progress on laboratory work to demonstrate the capabilities of an existing laterally graded multilayer coated mirror pair. We also present plans for a suborbital rocket experiment designed to detect a polarization level of 12-17% for an active galactic nucleus in the 0.1-1.0 keV band.Comment: 11 pages, 12 figures, to appear in the proceedings of the SPIE, volume 8861, on Optics for EUV, X-Ray, and Gamma-Ray Astronom

Do CEOs and Principal Financial Officers Take a Bath Separately or Together?: An Investigation of Discretionary Accruals Surrounding Appointments of New CEOs and PFOs

This study presents the first targeted examination of changes in financial reporting surrounding the appointment of both new CEOs and Principal Financial Officers (PFOs). We identify companies that appoint new CEOs and PFOs in the period 1995 to 2002 and find that the change in discretionary accruals is negative and significant in the year of hire (from t-1 to t) for firms appointing a new CEO or both a new CEO and PFO (i.e., the big bath ), but not for firms appointing only a new PFO. We also find that firms appointing both executives in the same year report significant increases in discretionary accruals in the subsequent year (from t to t+1) and for the combined two-years surrounding the joint appointments (from t-1 to t+1). However, similar increases are not found for firms hiring only one of these executives. Additional analyses indicate that our results are robust when examining other discretionary financial reporting choices (i.e., special items, extraordinary items and discontinued operations), and that the type of compensation contract offered by the firm (i.e., having a high bonus component ) is not significantly related to the changes in discretionary accruals surrounding these appointments. Our findings contribute to the corporate governance and executive turnover literature and provide evidence of a heightened financial reporting effect when firms concurrently appoint both new CEOs and PFOs

Snow and the ground temperature record of climate change

Journal ArticleBorehole temperature-depth profiles contain a record of surface ground temperature (SGT) changes with time and complement surface air temperature (SAT) analysis to infer climate change over multiple centuries. Ground temperatures are generally warmer than air temperatures due to solar radiation effects in the summer and the insulating effect of snow cover during the winter. The low thermal diffusivity of snow damps surface temperature variations; snow effectively acts as an insulator of the ground during the coldest part of the year

Regression Depth and Center Points

We show that, for any set of n points in d dimensions, there exists a hyperplane with regression depth at least ceiling(n/(d+1)). as had been conjectured by Rousseeuw and Hubert. Dually, for any arrangement of n hyperplanes in d dimensions there exists a point that cannot escape to infinity without crossing at least ceiling(n/(d+1)) hyperplanes. We also apply our approach to related questions on the existence of partitions of the data into subsets such that a common plane has nonzero regression depth in each subset, and to the computational complexity of regression depth problems.Comment: 14 pages, 3 figure

Accountable: Exploring the Inadequacies of Transparent Financial Practice in the Non-Profit Sector

Increasingly, governments and organisations publish data on expenditure and finance as 'open' data in order to be more transparent to the public in how funding is spent. Accountable is a web-based tool that visualises and relates open financial data provided by local government and non-profit organisations (NPOs) in the UK. A qualitative study was conducted where Accountable was treated as a technology probe, and used by representatives of NPOs and members of the public who invest their time or effort voluntarily into such organisations. The study highlighted how: current open data sets provided by public bodies are inadequate in their representation of funding structures; the focus on finance and fiscal expenditure in such data makes invisible the in-kind effort of volunteers and the wider beneficiaries of an organisation's work; and problems arising from the interoperability of open data technologies. The paper concludes with implications for the design of future systems, considering the domains of transparency and accountability in relation to the findings

Gaming machine accessibility and use in suburban Canberra: a detailed analysis of the Tuggeranong Valley

This report outlines research which focuses on club use and gambling activity in a specific region of suburban Canberra, namely the Tuggeranong Valley. The study builds on the 2001 ACT gambling survey by focussing in detail on the local level patterns of club use and gambling activity

NASA advanced aeronautics design solar powered remotely piloted vehicle

Environmental problems such as the depletion of the ozone layer and air pollution demand a change in traditional means of propulsion that is sensitive to the ecology. Solar powered propulsion is a favorable alternative that is both ecologically harmless as well as cost effective. Integration of solar energy into designs ranging from futuristic vehicles to heating is beneficial to society. The design and construction of a Multi-Purpose Remotely Piloted Vehicle (MPRPV) seeks to verify the feasibility of utilizing solar propulsion as a primary fuel source. This task has been a year long effort by a group of ten students, divided into five teams, each dealing with different aspects of the design. The aircraft was designed to take-off, climb to the design altitude, fly in a sustained figure-eight flight path, and cruise for approximately one hour. This mission requires flight at Reynolds numbers between 150,000 and 200,000 and demands special considerations in the aerodynamic design in order to achieve flight in this regime. Optimal performance requires a light weight configuration with both structural integrity and maximum power availability. The structure design and choice of solar cells for the propulsion was governed by the weight, efficiency, and cost considerations. The final design is a MPRPV weighting 35 N which cruises 7 m/s at the design altitude of 50 m. The configuration includes a wing composed of balsa and foam NACA 6409 airfoil sections and carbon fiber spars, a tail of similar construction, and a truss structure fuselage. The propulsion system consists of 98 10 percent efficient solar cells donated by Mobil Solar, a NiCad battery for energy storage, and a folding propeller regulated by a lightweight and efficient control system. The airfoils and propeller chosen for the design were research and tested during the design process