The Changing Role of Global Financial Brands in the Underwriting of Foreign Government Debt (1815-2010)

This paper covers the long-term evolution of the primary market for foreign government debt. We discuss the role of financial intermediaries as underwriters and distributors of securities, providers of information, and lending of last resort services since the early 19th century, and the evolution of this role. We underscore the role of the prestige of global financial brands in sustaining early foreign debt markets and its weakening in the modern era.Sovereign debt, primary bond market, reputation, underwriting, certification, information asymmetries, investment banking, credit rating agencies, IMF

The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007

We provide a comparison of salient organizational features of primary markets for foreign government debt over the very long run. We focus on output, quality control, information provision, competition, pricing, charging and signaling. We find that the market set up experienced a radical transformation in the recent period and interpret this as resulting from the rise of liability insurance provided by rating agencies. Underwriters have given up their former role as gatekeepers of liquidity and certification agencies to become aggressive competitors in a new speculative grade market.certification, primary bond market, sovereign debt crises, banks competition

The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007

We provide a comparison of salient organizational features of primary markets for foreign government debt over the very long run. We focus on output, quality control, information provision, competition, pricing, charging, and signaling. We find that the market setup experienced a radical transformation in the recent period, and we interpret this as resulting from the rise of liability insurance provided by rating agencies. Underwriters have given up their former role as gatekeepers of liquidity and certification agencies to become aggressive competitors in a new Speculative Grade market.

The Ethics of Moral Hazard Revisited

Historically, the term “moral hazard” came with strong moral connotations, as moral blame attached to those abusing insurance schemes. However, economists have taken moral hazard as a technical term, seeing individuals’ risk-adjusting behavior simply as a rational calculated response to insurance and insured situations. But the question still lingers: is morally hazardous behavior – sometimes or always – immoral? This chapter discusses the debate in ethics about this question. It argues that moral hazard is pro tanto morally wrong. The analysis is grounded in the fact that insurance puts people in a fiduciary relationship. They then are under a moral duty to act on behalf of the others in their insurance pool and try to reach the optimum level of social risk. Yet, there are exculpating reasons which diminish moral responsibility. Finally, the policy implications are discussed, illustrated by the moral hazard posed by large banks in the financial crisis

A high-density linkage map of the RN region in pigs

The porcine RN locus affects muscle glycogen content and meat quality. We previously mapped the RN locus to chromosome 15. This study describes the identification of polymorphisms for four class I and four class II markers located in the RN region. Resource families were genotyped with F-SSCP markers (fluorescent single strand conformation polymorphism) and microsatellite markers. Subsequent multipoint linkage analysis revealed the order FN1-IGFBP5-S1000-S1001-IL8RB-VIL1-RN-Sw936-Sw906. The gene order is identical to the previously reported porcine RH map of the same region. The described map will facilitate positional cloning of the RN gene

The James Webb Space Telescope Mission

Twenty-six years ago a small committee report, building on earlier studies, expounded a compelling and poetic vision for the future of astronomy, calling for an infrared-optimized space telescope with an aperture of at least $4m$. With the support of their governments in the US, Europe, and Canada, 20,000 people realized that vision as the $6.5m$ James Webb Space Telescope. A generation of astronomers will celebrate their accomplishments for the life of the mission, potentially as long as 20 years, and beyond. This report and the scientific discoveries that follow are extended thank-you notes to the 20,000 team members. The telescope is working perfectly, with much better image quality than expected. In this and accompanying papers, we give a brief history, describe the observatory, outline its objectives and current observing program, and discuss the inventions and people who made it possible. We cite detailed reports on the design and the measured performance on orbit.Comment: Accepted by PASP for the special issue on The James Webb Space Telescope Overview, 29 pages, 4 figure

Quelles réformes pour l’industrie de la notation financière ?

Credit rating agencies (CRAs) are under scrutiny for failing to both anticipate financial crises since the late 1990s and manage their conflicts of interests when assigning ratings to structured products. This article presents an overview of the past and present reforms regarding the credit rating industry. It also makes proposals for regulatory reform. Five areas are worth examining : i) the reliance on CRA ratings in standards, laws and regulations, ii) the competition in the credit rating industry, iii) the conflicts of interests, iv) the controls over the rating methodologies and the rating process, and v) the civil liability of CRAs. This article considers that alternatives to the use of credit ratings in financial regulations are possible in the sovereign rating area. It recommends a tighter supervision of structured products ratings and proposes a new regulatory framework to prevent conflicts of interests. It concludes that CRA ratings cannot be a substitute for institutional investors’ due diligence. Classification JEL : G15, G18, G24.Les agences de notation sont sous le feu des critiques, faute d’avoir pu prévoir les crises financières depuis la fin des années 1990 et d’avoir su maîtriser les risques de conflits d’intérêts en matière de notation des instruments financiers structurés. Cet article fait le point sur le chantier actuel des réformes de l’activité de la notation et propose plusieurs pistes de réforme. Cinq points font l’objet d’une attention particulière : i) la place des notations dans les réglementations financières, ii) la concurrence au sein de l’industrie de la notation, iii) les conflits d’intérêts, iv) le contrôle des méthodologies et des processus de notation, v) la responsabilité civile des agences. Cet article considère que des alternatives aux notes souveraines sont possibles. Il recommande une supervision plus étroite des notations de produits structurés et propose une nouvelle réglementation pour lutter contre les conflits d’intérêts. Il conclut en affirmant que les investisseurs doivent «réinternaliser » l’analyse du risque de crédit. Classification JEL : G15, G18, G24.Gaillard Norbert. Quelles réformes pour l’industrie de la notation financière ?. In: Revue d'économie financière, n°101, 2011. Le risque systémique 2. Repenser la supervision. pp. 73-86