Banks, knowledge and crisis: a case of knowledge and learning failure

Purpose – Regulators such as Turner have identified excessive securitization, high leverage, extensive market trading and a bonus culture, as being major factors in bringing about the bank centred financial crisis of 2007-2009. Whilst it is inevitable that banks adopt procyclical business strategies, not all banks took excessive risks and subsequently had to be rescued by taxpayers. The paper examines the extent to which individual bank outcomes can be attributed to systematic differences in banking knowledge concerning the primary risks and value drivers of their organisations by bank board directors and top management. Design/methodology/approach – The paper reviews a wide range of theoretical, historical and empirical literatures on banking models and detailed case analyses of failing and non-failing banks. A framework for understanding the role and application of knowledge in banking is developed which suggests how banks, despite their pro-cyclical business strategies, are able to institutionalise learning and actively create new knowledge through time to improve bank organisation, intermediation and risk management. Findings – The paper finds that a lack of basic knowledge of banking risks and value drivers by the boards and senior managers of the failing banks were implicated in the banking crisis. These knowledge problems concerned banks' understanding of their organisation, intermediation and risk management in an active market setting characterised by rapid economic and organisational change. Thus, the failing banks ignored or were unaware of this knowledge and hence experienced acute difficulties with learning the new knowledge needed to address the new problems thrown-up by the financial crisis. Practical implications – The analysis suggests that addressing this knowledge gap via the institutionalisation of banking knowledge ought to constitute an important element of any sustainable solution to the problems currently being experienced by the banking sector. By ensuring greater bank learning, knowledge creation, and knowledge use, governments and regulators could help reduce individual bank risk and the likelihood of future crisis. Originality/value – In contrast to the claims made by some politicians and banking insiders, the analysis indicates that the banking crisis and its severity were neither unpredictable nor unavoidable since some banks, by institutionalising banking knowledge and history of past crises, successfully avoided the pitfalls experienced by the failing banks

China’s low carbon technology ambitions: the relationship between indigenous innovation and technological transfer

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Fluctuations and Relationships of Selected Physiochemical Parameters in Dardanelle Reservoir, Arkansas, 1975-1982

Annual and seasonal fluctuations and relationships are described for discharge, turbidity, chloride, total hardness, conductivity and suspended solids over an eight-year period in Dardanelle Reservoir. The parameters fluctuated rather widely primarily in response to seasonal patterns of rainfall. Chloride and conductivity were related and generally fluctuated together as did turbidity and suspended solids. Hardness appeared to vary independently of the others prior to 1979 then varied more closely with chloride after March 1979. Inherent differences between the Illinois Bayou arm and the main Arkansas River sections complicated the precise identification of any overall impact of power plant operation. No significant long term changes were seen, but chloride declined gradually whereas hardness and conductivity increased slightly. Suspended solids exhibited a significant rise in 1982

A Primary Ecological Survey of Dardanelle Reservoir Prior to Nuclear Facility Effluent Discharge

A preliminary ecological survey of Dardanelle Reservoir during the construction phase of Arkansas Power and Light Company\u27s nuclear generating facility was conducted from January 1970 through June 1974. The reservoir is characterized by relatively shallow depths and a high flow-thru rate. A number of features were associated with these characteristics. The reservoir carried a great deal of suspended material and exhibited high turbidities throughout most of the year. Typical thermal stratification and oxygen depletion were only rarely observed. Many of the physico-chemical parameters exhibited relatively high values in comparison to other Arkansas lakes and reservoirs, but due to absence of prolonged periods of stratification and stagnation, they did not undergo the extreme fluctuations sometimes observed in other reservoirs. Plankton and benthic samples were collected at least nine times per year from ten stations. These stations were selected to include both shallow and deep locations and to include points both within and outside the projected area of thermal influence when the plant became operational. There were a great variety of forms in the phytoplankton with the diatoms making up a considerable portion. The level of turbidity appeared to dampen somewhat the extreme fluctuations sometimes found in bloom periods. In the zooplankton the rotifers Brachionus, Keratella, and Polyarthra predominated followed by the microcrustaceans Cyclops and Bosmina. Both the plankton and the benthic fauna showed great seasonal variation. The benthic fauna consisted primarily of Chironomidae, Oligochaeta, and Hexagenia with the Chironomidae predominating in the shallower depths and the Oligochaeta exhibiting increased abundance and importance in the deeper stations

Phytoplankton Community Structure in Dardanelle Reservoir, Arkansas, 1975-1982

Phytoplankton data were collected with standard equipment and procedures over an eight-year period (1975-1982) in Dardanelle Reservoir, Arkansas. Community abundance and diversity at the genus level are described. Sixty-five genera representing 35 families and five divisions were identified. Total phytoplankton abundance and diversity were quite uniform among the stations but fluctuated considerably with time. These fluctuations did not correspond clearly with season. Dominant taxa were seasonal, though, with diatoms being usually dominant in January, April and October, and blue-greens dominant in July. The phytoplankton community structure has not been significantly altered by the operation of ANO Unit I

The service sector and the "Great Recession"

The recent recession had a lasting effect on the service sector, both nationally and in the Fifth District. The Fifth District Service Sector Index of Revenues provides valuable insights into the nature of the service sector's downturn, and its links to downturns in other markets. In particular, breaking down the aggregate index into its component industries reveals important differences in each subsector's decline and relative recovery.Business cycles ; Federal Reserve District, 5th ; Recessions

Pay Comparisons: An Analysis of UK University Vice Chancellors Pay Awards

This paper examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997 to 2002, evaluates the impact upon VC pay awards of university performance measures, an internal pay comparison measure and two external pay comparisons, i.e., the pay of other VCs and the pay of CEOs leading comparable-sized UK firms. We find no evidence that VC pay awards are related to any of the performance measures, though the positive relationship found between changes in the proportion of other highly-paid employees and VC pay awards suggests that internal pay comparisons play an important role in remuneration committee decision making. Of the two external pay benchmarks, the pay received by other VCs has the largest positive impact upon VC pay awards. Nevertheless, the (much smaller) partial adjustment of VC pay explained by the difference between the two external pay benchmarks was also statistically significant. Thus, whilst average VC pay increased by some 40% over the period, this was significantly less than the increase in the pay of comparable UK CEOs. We suggest that this conservatism by university remuneration committees stems largely from political rather than financial constraints

Nitrogen fixation and soil nitrogen in organic ley arable rotations

This report was presented at the UK Organic Research 2002 Conference. Nitrogen (N) fixation in a white clover/ryegrass mixture was measured in 1,2,3 and 4-year-old organically managed leys during 2000. N fixation varied between 73.7 in 1-year-old leys and 33.5 kg ha-1 in 4-year-old leys. Soil nitrate-N, grass N yield and N content of grass and clover were all lowest in 2-year-old leys and highest in 3-year-old leys. The proportion of clover nitrogen derived from the atmosphere (pNdfa) was significantly lower in 3-year-old leys

Money, prices, interest rates and the business cycle

Business cycles ; Interest rates ; Macroeconomics