Understanding the weakness of bank lending

The flow of new bank lending to UK households and businesses fell sharply following the start of the global financial crisis in mid-2007. That provoked an ongoing debate about the extent to which the sustained weakening of bank lending was caused by a fall in demand for credit, or a fall in supply. While it is difficult to disentangle the effects of shifts in credit demand and supply, this article finds evidence of a substantial and persistent tightening in credit supply conditions from mid-2007. But independently weaker credit demand — probably associated with the impact of the global financial crisis — is also likely to have contributed to the weakness in bank lending.

A Merton Model Approach to Assessing the Default Risk of UK Public Companies

This paper shows how a Merton-model approach can be used to develop measures of the probability of failure of quoted UK companies. Probability estimates are constructed for a group of failed companies and their properties as leading indicators of failure assessed. Probability estimates of failure for a control group of surviving companies are also constructed. These are used in Probit-regressions to evaluate the information content of the Merton-based estimates relative to information available in company accounts. The paper shows that there is much useful information in the Merton-style estimates.Merton models, corporate failure, implied default probabilities

Amending the revisionist model of the Capgras delusion: A further argument for the role of patient experience in delusional belief formation

Recent papers on the Capgras delusion have focused on the role played by subpersonal abductive inference in the formation and maintenance of the delusional belief. In these accounts, the delusional belief is posited as the first delusion-related event of which the patient is conscious. As a consequence, an explanatory role for anomalous patient experience is denied. The aim of this paper is to challenge this revisionist position and to integrate subpersonal inference within a model of the Capgras delusion which includes a role for experiential content. I argue that the following revisionist claims are problematic: (a) that a fully-formed belief enters consciousness, and (b) that this is the first conscious delusion-related event. Instead, it is my contention that a delusional thought (arrived at through subpersonal abductive inference) and an anomalous experience co-occur in consciousness prior to the formation of the delusional belief. The co-occurrence of thought and anomalous experience overcomes problems with the revisionist position resulting in an account of the Capgras delusion with greater explanatory efficacy

A response to Coren's objections to the principle of alternate possibilities as sufficient but not necessary for moral responsibility

In this paper I respond to Coren's argument against my 2016 paper in which I present a case for the principle of alternate possibilities as sufficient but not necessary for the ascription of moral responsibility (PAP(S)). I concede that Coren has identified aspects of my original position that are vulnerable to counter-examples. Nevertheless, through a simple amendment to my original argument I am able to respond to these counter-examples without undermining the foundations on which my 2016 paper was built. Moreover, it is my contention that the main challenge Coren presents to my original paper involves making explicit that which is already implied within PAP(S). Therefore, while I acknowledge that my argument for PAP(S) requires further clarification, this can be achieved (as I demonstrate here) without undermining my original position

The determinants of unsecured borrowing : evidence from the Bristish household panel survey

Household indebtedness has risen sharply in recent years, with large increases in both secured and unsecured borrowing. In this paper, waves 5 and 10 of the British Household Panel Survey (BHPS) for 1995 and 2000 are used to examine the determinants of participation in the unsecured debt market and the amount borrowed. Probit models for participation are estimated and age, income, positive financial prospects and housing tenure are found to be very significant and have the expected sign according to a life-cycle model for consumption. Regressions to explain the level of borrowing by individuals suggest that income is the main variable explaining cross-sectional differences in unsecured debts. The increase in aggregate unsecured debt between 1995 and 2000 does not seem to be closely linked to changes in the determinants of debt market participation and has been mainly associated with the larger amounts borrowed by those with debts. Increases in income, better educational qualifications and improved prospects regarding the financial situation contributed to this result. The major part of the overall increase in unsecured debt is not explained by variables at the individual level, but is accounted for by common, unmodelled macroeconomic factors.[resumen de autor

Greece 2010-18: what could we have done differently?

At the beginning of 2010, the fiscal situation of Greece was unsustainable, and an ambitious but costly adjustment plan had to be put in place under a consortium of the International Monetary Fund, the European Commission and the European Central Bank. It took three consecutive adjustment programmes, including debt-relief through private sector involvement, to restore confidence in the economy and achieve a budget surplus. In this paper, we provide a theoretical analysis of the Greek Crisis starting from 2010. We build a series of counterfactuals using the National Institute General Econometric Model (NIGEM) to analyse why the cost of the adjustment in terms of GDP loss and increase in debt-to-GDP ratio turned out to be much worse than expected. In doing so, we analyse three scenarios: (i) one in which we simulate a much more conservative cut in public investment by the Greek central government; (ii) a second scenario of a lower risk-premium, signalling, e.g., lower political and redenomination risks, had the European Central Bank guaranteed its lending of last resort role earlier than 2012; (iii) finally, a similar financial envelope as the one adopted during the first Greek adjustment programme but over a longer period, moving beyond the standard IMF three-year duration programmes. We find that the mix of expenditure cuts and loss of confidence among households and firms explain a large part of the unanticipated costs of the adjustment in the Greek crisis

Case of chronic indolent pheochromocytoma that caused medically controlled hypertension but treatment-resistant diabetes mellitus

No abstract available

A UK financial conditions index using targeted data reduction: forecasting and structural identification

A financial conditions index (FCI) is designed to summarise the state of financial markets. Two are constructed with UK data. The first is the first principal component of a set of financial indicators. The second comes from a new approach taking information from a large set of macroeconomic variables weighted by the joint covariance with a subset of the financial indicators (a set of spreads), using multivariate partial least squares, again using the first factor. The resulting FCIs are broadly similar. They both have some forecasting power for monthly GDP in a quasi-real-time recursive evaluation from 2011-2014 and outperform an FCI produced by Goldman Sachs. A second factor, that may be interpreted as a monetary conditions index, adds further forecast power, while third factors have a mixed effect on performance. The FCIs are used to improve identification of credit supply shocks in an SVAR. The main effects relative to an SVAR excluding an FCI of the (adverse) credit shock IRFs are to make the positive impact on in ation more precise and to reveal an increased positive impact on spreads

Distressed banks, distorted decisions?

Exploiting differences in pre-crisis business banking relationships, we present evidence to suggest that restricted credit availability following the 2008 financial crisis increased the rate of business failure in the United Kingdom. But rather than "cleansing the economy by accelerating the exit of the least productive businesses, we find that tighter credit conditions resulted in some businesses failing despite being more productive than their surviving competitors. We also find evidence that distressed banks protected highly leveraged, low productivity businesses from failure