Economics of trust: The interbank market during the crisis 2007-2009

“Vertrauen ist der Anfang von allem” (“trust is the beginning of everything”)- A large bank seemed to be aware of the importance of trust within financial markets when it started the marketing campaign in 1995. Almost fifteen years later banks all over the world trust nearly nobody and were not trusted by anybody. In this paper the origins, functions and aftermath of trust/distrust in financial economics are investigated by firstly analyzing trust in economic relationships in a general theoretical matter. Secondly, we provide some indicators for measuring institutional and interbank specific trust. Thirdly, we evaluate policy measures conducted by central banks due to recover the trust relationships at European interbank market. The paper is separated into two parts and seven chapters including introduction and conclusion. The first part explains a more generic approach to introduce trust and distrust into economic decisions. Thus, chapter 2 begins with some definitions about trust and an explanation about its relevance and functions in contract theory. Chapter 3 analyzes the formation of trust and distrust in the microeconomic environment based upon principal-agent theory. While trust and distrust vary in the date of origin they are both rational decision based and thus influenced by expectations, information and experience. Furthermore, the concept of social capital is introduced as a theory to explain trust and distrust in a macroeconomic framework which is more relevant to explain trust crises. The theoretical aspects are empirically applied by analyzing the net trust in macroeconomic institutions as government, central bank and money. A trust crisis - defined as sudden shift from positive to negative net trust - between EU citizen and national/transnational institutions in 2008/2009 can only be verified in case of the European Central Bank. But in contrast to theoretical requirements the net distrust occurs only for a short period. The next chapter (4) applies the economic theory of trust to the specific situation on interbank market transactions. Therefore, it investigates the role of trust in interbank relationships and the problem that occurs if this relationship is damaged. Finally, four indicators were derived to identify the want on confidence in bank-to-bank transactions: (a) the difference between EURIBOR and EUREPO rates (b) the credit volume of unsecured liabilities (c) the level of capacity for permanent facilities (d) vertical equalization of liquidity between central and commercial banks. The results of chapters 2-4 provide the theoretical framework for analyzing the specific situation at the European interbank market crisis in the second part of the paper. Chapter 5 starts with a general survey about the chronology and causes of the financial crises 2007-2009. The next chapter (6) reappraises the previously derived indicators of interbank confidence in pre-, within-, and after-crisis periods. It can be shown that the distrust situation between banks slew down since 2009, similarly to the results of institutional trust for the whole economy. The chapter closes with an interpretation of the results and some theoretical explanations. Within the last chapter (7) the reaction (interest rate reduction, restructuring of the tender system) of monetary authority to the financial distress is explained and evaluated in terms of restoring the interbank market.trust; interbank market; financial crisis;

Zur Vertrauensökonomik: Der Interbankenmarkt in der Krise von 2007-2009

“Vertrauen ist der Anfang von allem” (“trust is the beginning of everything”)- A large bank seemed to be aware of the importance of trust within financial markets when it started the marketing campaign in 1995. Almost fifteen years later banks all over the world trust nearly nobody and were not trusted by anybody. In this paper the origins, functions and aftermath of trust/distrust in financial economics are investigated by firstly analyzing trust in economic relationships in a general theoretical matter. Secondly, we provide some indicators for measuring institutional and interbank specific trust. Thirdly, we evaluate policy measures conducted by central banks due to recover the trust relationships at European interbank market. The paper is separated into two parts and seven chapters including introduction and conclusion. The first part explains a more generic approach to introduce trust and distrust into economic decisions. Thus, chapter 2 begins with some definitions about trust and an explanation about its relevance and functions in contract theory. Chapter 3 analyzes the formation of trust and distrust in the microeconomic environment based upon principal-agent theory. While trust and distrust vary in the date of origin they are both rational decision based and thus influenced by expectations, information and experience. Furthermore, the concept of social capital is introduced as a theory to explain trust and distrust in a macroeconomic framework which is more relevant to explain trust crises. The theoretical aspects are empirically applied by analyzing the net trust in macroeconomic institutions as government, central bank and money. A trust crisis - defined as sudden shift from positive to negative net trust - between EU citizen and national/transnational institutions in 2008/2009 can only be verified in case of the European Central Bank. But in contrast to theoretical requirements the net distrust occurs only for a short period. The next chapter (4) applies the economic theory of trust to the specific situation on interbank market transactions. Therefore, it investigates the role of trust in interbank relationships and the problem that occurs if this relationship is damaged. Finally, four indicators were derived to identify the want on confidence in bank-to-bank transactions: (a) the difference between EURIBOR and EUREPO rates (b) the credit volume of unsecured liabilities (c) the level of capacity for permanent facilities (d) vertical equalization of liquidity between central and commercial banks. The results of chapters 2-4 provide the theoretical framework for analyzing the specific situation at the European interbank market crisis in the second part of the paper. Chapter 5 starts with a general survey about the chronology and causes of the financial crises 2007-2009. The next chapter (6) reappraises the previously derived indicators of interbank confidence in pre-, within-, and after-crisis periods. It can be shown that the distrust situation between banks slew down since 2009, similarly to the results of institutional trust for the whole economy. The chapter closes with an interpretation of the results and some theoretical explanations. Within the last chapter (7) the reaction (interest rate reduction, restructuring of the tender system) of monetary authority to the financial distress is explained and evaluated in terms of restoring the interbank market

Lung diffusing capacity for nitric oxide and carbon monoxide in relation to morphological changes as assessed by computed tomography in patients with cystic fibrosis

Background Due to large-scale destruction, changes in membrane diffusion (Dm) may occur in cystic fibrosis (CF), in correspondence to alterations observed by computed tomography (CT). Dm can be easily quantified via the diffusing capacity for nitric oxide (DLNO), as opposed to the conventional diffusing capacity for carbon monoxide (DLCO). We thus studied the relationship between DLNO as well as DLCO and a CF-specific CT score in patients with stable CF. Methods Simultaneous single-breath determinations of DLNO and DLCO were performed in 21 CF patients (mean ± SD age 35 ± 9 y, FEV1 66 ± 28%pred). Patients also underwent spirometry and bodyplethysmography. CT scans were evaluated via the Brody score and rank correlations (rS) with z-scores of functional measures were computed. Results CT scores correlated best with DLNO (rS = -0.83; p < 0.001). Scores were also related to the volume-specific NO transfer coefficient (KNO; rS = -0.63; p < 0.01) and to DLCO (rS = -0.79; p < 0.001) but not KCO. Z-scores for DLNO were significantly lower than for DLCO (p < 0.001). Correlations with spirometric (e.g., FEV1, IVC) or bodyplethysmographic (e.g., SRaw, RV/TLC) indices were weaker than for DLNO or DLCO but most of them were also significant (p < 0.05 each). Conclusion In this cross sectional study in patients with CF, DLNO and DLCO reflected CT-morphological alterations of the lung better than other measures. Thus the combined diffusing capacity for NO and CO may play a future role for the non-invasive, functional assessment of structural alterations of the lung in CF

A Neutralizing RNA Aptamer against EGFR Causes Selective Apoptotic Cell Death

Nucleic acid aptamers have been developed as high-affinity ligands that may act as antagonists of disease-associated proteins. Aptamers are non immunogenic and characterised by high specificity and low toxicity thus representing a valid alternative to antibodies or soluble ligand receptor traps/decoys to target specific cancer cell surface proteins in clinical diagnosis and therapy. The epidermal growth factor receptor (EGFR) has been implicated in the development of a wide range of human cancers including breast, glioma and lung. The observation that its inhibition can interfere with the growth of such tumors has led to the design of new drugs including monoclonal antibodies and tyrosine kinase inhibitors currently used in clinic. However, some of these molecules can result in toxicity and acquired resistance, hence the need to develop novel kinds of EGFR-targeting drugs with high specificity and low toxicity. Here we generated, by a cell-Systematic Evolution of Ligands by EXponential enrichment (SELEX) approach, a nuclease resistant RNA-aptamer that specifically binds to EGFR with a binding constant of 10 nM. When applied to EGFR-expressing cancer cells the aptamer inhibits EGFR-mediated signal pathways causing selective cell death. Furthermore, at low doses it induces apoptosis even of cells that are resistant to the most frequently used EGFR-inhibitors, such as gefitinib and cetuximab, and inhibits tumor growth in a mouse xenograft model of human non-small-cell lung cancer (NSCLC). Interestingly, combined treatment with cetuximab and the aptamer shows clear synergy in inducing apoptosis in vitro and in vivo. In conclusion, we demonstrate that this neutralizing RNA-aptamer is a promising bio-molecule that can be developed as a more effective alternative to the repertoire of already existing EGFR-inhibitors

Prognostic impact of vitamin B6 metabolism in lung cancer

Patients with non-small cell lung cancer (NSCLC) are routinely treated with cytotoxic agents such as cisplatin. Through a genome-wide siRNA-based screen, we identified vitamin B6 metabolism as a central regulator of cisplatin responses in vitro and in vivo. By aggravating a bioenergetic catastrophe that involves the depletion of intracellular glutathione, vitamin B6 exacerbates cisplatin-mediated DNA damage, thus sensitizing a large panel of cancer cell lines to apoptosis. Moreover, vitamin B6 sensitizes cancer cells to apoptosis induction by distinct types of physical and chemical stress, including multiple chemotherapeutics. This effect requires pyridoxal kinase (PDXK), the enzyme that generates the bioactive form of vitamin B6. In line with a general role of vitamin B6 in stress responses, low PDXK expression levels were found to be associated with poor disease outcome in two independent cohorts of patients with NSCLC. These results indicate that PDXK expression levels constitute a biomarker for risk stratification among patients with NSCLC.publishedVersio

Safety of Hyaluronan 35 in Healthy Human Subjects: A Pilot Study

Background. Hyaluronan (HA) is a naturally occurring glycosaminoglycan polymer produced in all vertebrates, and usually present at the high molecular weight (&gt;106 Da). Low molecular weight HA has signaling properties, and fragments ~35 kDa size (HA35) have biological activity in eliciting epithelial &#946;-defensins and tight junction proteins, notably ZO1, important components of innate host defense arsenal of the gut barrier in preclinical models. Safety, tolerability, impact on metabolism, gut permeability, and microbiome composition in healthy human subjects were all evaluated prospectively. Methods. Pharmaceutical grade HA35 (140 mg in water once daily for seven days), was administered orally to 20 healthy subjects (30.7 &#177; 5.6 years). Demographical, clinical, biochemical laboratory tests, metabolic function and stool microbiome composition were measured on Day 0, 8 and 28. Results. HA35 was tolerated well in all subjects with no serious adverse events in any subjects. No statistical differences in any of the measurements were seen among the study group over the course of the trial. In aggregate there were no changes in demographical, clinical, biochemical laboratory tests, and metabolic function or microbiome composition during the 28-day study. Conclusion. Oral HA35 administration (140 mg/day) is a safe treatment in healthy individuals and does not affect metabolic, inflammatory or microbiome parameters

The Dietary Polysaccharide Maltodextrin Promotes <i>Salmonella</i> Survival and Mucosal Colonization in Mice

<div><p>In the latter half of the 20^th century, societal and technological changes led to a shift in the composition of the American diet to include a greater proportion of processed, pre-packaged foods high in fat and carbohydrates, and low in dietary fiber (a “Western diet”). Over the same time period, there have been parallel increases in <i>Salmonella</i> gastroenteritis cases and a broad range of chronic inflammatory diseases associated with intestinal dysbiosis. Several polysaccharide food additives are linked to bacterially-driven intestinal inflammation and may contribute to the pathogenic effects of a Western diet. Therefore, we examined the effect of a ubiquitous polysaccharide food additive, maltodextrin (MDX), on clearance of the enteric pathogen <i>Salmonella</i> using both <i>in vitro</i> and <i>in vivo</i> infection models. When examined <i>in vitro</i>, murine bone marrow-derived macrophages exposed to MDX had altered vesicular trafficking, suppressed NAPDH oxidase expression, and reduced recruitment of NADPH oxidase to <i>Salmonella</i>-containing vesicles, which resulted in persistence of <i>Salmonella</i> in enlarged Rab7⁺ late endosomal vesicles. <i>In vivo</i>, mice consuming MDX-supplemented water had a breakdown of the anti-microbial mucous layer separating gut bacteria from the intestinal epithelium surface. Additionally, oral infection of these mice with <i>Salmonella</i> resulted in increased cecal bacterial loads and enrichment of lamina propria cells harboring large Rab7⁺ vesicles. These findings indicate that consumption of processed foods containing the polysaccharide MDX contributes to suppression of intestinal anti-microbial defense mechanisms and may be an environmental priming factor for the development of chronic inflammatory disease.</p></div