Bank heterogeneity and monetary policy transmission

Heterogeneity in the response of banks to a change in monetary policy is an important element in the transmission of this policy through banks. This paper examines the role of bank liquidity, capitalization and market power as internal factors influencing banks’ reaction in terms of lending and risk-taking to monetary policy impulses. The ultimate impact of a monetary policy change on bank performance is also considered. The empirical analysis, using large panel datasets for the United States and the euro area, elucidates the sources of differences in the response of banks to changes in policy interest rates by disaggregating down to the individual bank level. This is achieved by the use of a Local GMM technique that also enables us to quantify the degree of heterogeneity in the transmission mechanism. It is argued that the extensive heterogeneity in banks’ response identifies overlooked consequences of bank behavior and highlights potential monetary sources of the current financial distress. JEL Classification: E44, E52, G21, C14Bank heterogeneity, bank performance, monetary policy, Risk-taking

Bank Heterogeneity and Monetary Policy Transmission

The heterogeneity in the response of banks to a change in monetary policy is an important element in the transmission of this policy through banks. This paper examines the role of bank liquidity, capitalization and market power as internal factors influencing banks’ reaction in terms of lending and risk-taking to monetary policy impulses. The ultimate impact of a monetary policy change on bank performance is also considered. The empirical analysis, using large panel datasets for the United States and the euro area, elucidates the sources of differences in the response of banks to changes in policy interest rates by disaggregating down to the individual bank level. This is achieved by the use of a Local GMM technique that also enables us to quantify the degree of heterogeneity in the transmission mechanism. It is argued that the extensive heterogeneity in banks’ response identifies overlooked consequences of bank behavior and highlights potential monetary sources of the current financial distress.Monetary policy; Bank heterogeneity; Risk-taking; Bank performance

Bank-Level Estimates of Market Power

The aim of this study is to provide an empirical methodology for the estimation of market power of individual banks. The new method employs the well-known model of Panzar and Rosse (1987) and proposes its estimation using the local regression technique. Thus, a number of restrictive assumptions regarding the properties of the production function of banks are relaxed, while the method proves successful in providing reasonable estimates of bank-level market power when applied to a large panel of banks of transition countries. The empirical results suggest that many banks in the sample deviate significantly from competitive practices and that market power varies substantially across banks in each country. Country averages of the bank-level results exhibit a very close relationship with standard, industry-level Panzar-Rosse estimates.Bank output; Market power; bank-level; local regression

Exploring the Nexus between Banking Sector Reform and Performance: Evidence from Newly Acceded EU Countries

The aim of this study is to examine the relationship between banking sector reform and bank performance – measured in terms of efficiency, total factor productivity growth and net interest margin – accounting for the effects through competition and bank risk-taking. To this end, we develop an empirical model of bank performance and draw on recent econometric advances to consistently estimate it. The model is applied to bank panel data from ten newly acceded EU countries. The results indicate that both banking sector reform and competition exert a positive impact on bank efficiency, while the effect of reform on total factor productivity growth is significant only toward the end of the reform process. Finally, the effect of capital and credit risk on bank performance is in most cases negative, while it seems that higher liquid assets reduce the efficiency and productivity of banks.Bank performance; Banking sector reform; Competition; Risk-taking

A compact plug-in module for LHC-like trigger emulation

A compact trigger emulation module for evaluating electronic systems for LHC applications has been built using off-the-shelf components. The emulator, which is based on an FPGA, generates both programmable and true-random trigger patterns in compliance with the LHC triggering rules. For the true-random trigger part, the source of randomness is the avalanche effect on a transistor emitter-base diode. The system can be used either as a plug-in module for VME systems or as a standalone device controlled via a standard USB link by a PC running LabVIEW

Road Pavement Asphalt Concretes for Thin Wearing Layers: A Machine Learning Approach towards Stiffness Modulus and Volumetric Properties Prediction

In this study a novel procedure is presented for an efficient development of predictive models of road pavement asphalt concretes mechanical characteristics and volumetric properties, using shallow artificial neural networks. The problems of properly assessing the actual generalization feature of a model and avoiding the effects induced by a fixed training-test data split are addressed. Since machine learning models require a careful definition of the network hyperparameters, a Bayesian approach is presented to set the optimal model configuration. The case study covered a set of 92 asphalt concrete specimens for thin wearing layers

A VME-based readout system for the CMS Preshower sub-detector

The CMS preshower is a fine grain detector that comprises 4288 silicon sensors, each containing 32 strips. The raw data are transferred from the detector to the counting room via 1208 optical fibres. Each fibre carries a 600-byte data packet per event. The maximum average level-1 trigger rate of 100 kHz results in a total data flow of ~72 GB/s from the preshower. For the readout of the preshower, 56 links to the CMS DAQ have been reserved, each having a bandwidth of 200 MB/s (2 kB/event). The total available downstream bandwidth of GB/s necessitates a reduction in the data volume by a factor of at least 7. A modular VME-based system is currently under development. The main objective of each VME board in this system is to acquire on-detector data from at least 22 optical links, perform on-line data reduction and pass the concentrated data to the CMS DAQ. The principle modules that the system is based on are being developed in collaboration with the TOTEM experiment

Linear and nonlinear optical properties of some organoxenon derivatives

We employ a series of state-of-the-art computational techniques to study the effect of inserting one or more Xe atoms in HC2H and HC4H, on the linear and nonlinear optical (L&NLO) properties of the resulting compounds. It has been found that the inserted Xe has a great effect on the L&NLO properties of the organoxenon derivatives. We analyze the bonding in HXeC2H, and the change of the electronic structure, which is induced by inserting Xe, in order to rationalize the observed extraordinary L&NLO properties. The derivatives, which are of interest in this work, have been synthesized in a Xe matrix. Thus the effect of the local field (LF), due to the Xe environment, on the properties of HXeC2H, has also been computed. It has been found that the LF effect on some properties is significant. The calculations have been performed by employing a hierarchy of basis sets and the techniques MP2 and CCSD(T) for taking into account correlation. For the interpretation of the results we have employed the complete active space valence bond and CASSCF/CASPT2 [email protected]

Tests of the Equivalence Principle with Neutral Kaons

We test the Principle of Equivalence for particles and antiparticles, using CPLEAR data on tagged K0 and K0bar decays into pi^+ pi^-. For the first time, we search for possible annual, monthly and diurnal modulations of the observables |eta_{+-}| and phi_{+-}, that could be correlated with variations in astrophysical potentials. Within the accuracy of CPLEAR, the measured values of |eta_{+-}| and phi_{+-} are found not to be correlated with changes of the gravitational potential. We analyze data assuming effective scalar, vector and tensor interactions, and we conclude that the Principle of Equivalence between particles and antiparticles holds to a level of 6.5, 4.3 and 1.8 x 10^{-9}, respectively, for scalar, vector and tensor potentials originating from the Sun with a range much greater than the distance Earth-Sun. We also study energy-dependent effects that might arise from vector or tensor interactions. Finally, we compile upper limits on the gravitational coupling difference between K0 and K0bar as a function of the scalar, vector and tensor interaction range.Comment: 15 pages latex 2e, five figures, one style file (cernart.csl) incorporate