Credit default swaps and financial stability: risks and regulatory issues.

The credit default swap (CDS) market has grown much faster than other derivatives markets since its inception. Even though it is dwarfed by the interest rate derivatives market, which is eight times larger, its growth has affected the stability of the financial system. CDS were originally designed as a risk transfer tool to allow investors to hedge their position in the debt of a reference entity, but much of the activity in this market is also speculative (Olléon-Assouan, 2004). Risk management in the CDS market has certainly improved significantly, reflected in the fact that gross notional volumes have fallen remarkably as a result of trade compression. Nevertheless there is still no accurate indication of how much risk has actually been transferred with these instruments, and this is a major concern for financial stability. Even a rough estimate of market size ranges from USD 29 trillion to USD 38 trillion at end-2008. Clarifying and harmonising information is vitally important, particularly since the uncertainty surrounding market participants’ risk exposure contains the seeds of systemic contagion. There is now a pressing need for better market supervision based on the active participation of regulators. The task has already been made easier by a number of public and private initiatives aimed at improving the functioning of the market and monitoring risks more effectively. The most tangible evidence of these combined efforts can be found in various plans for a clearinghouse that emerged in 2008 and 2009. Aside from its practical limitations, however, this solution cannot be extended to all CDS classes. And regulators still face the sizeable challenge of assessing overall counterparty risk on the CDS market and preventing concentration and formation of systemic exposures.

Les crédits aux sociétés non financières en France : évolutions récentes.

Particulièrement soutenue jusqu’à ces derniers mois, la croissance des crédits aux entreprises donne, depuis peu, des signes de modération, dans un contexte de consolidation des bilans bancaires et de dégradation de l’environnement macroéconomique.Crédits aux entreprises, taux débiteurs, réintermédiation, financement des entreprises, conditions du crédit.

Évolutions récentes du crédit aux ménages en France.

Les turbulences observées sur les marchés financiers n’ont guère affecté jusqu’à présent la distribution de crédits à l’habitat en France, alors que la demande des ménages a continué de se modérer de manière graduelle.crédits à l’habitat, ménages, endettement, conditions du crédit, taux débiteurs.

The respiratory syncytial virus nucleoprotein–RNA complex forms a left-handed helical nucleocapsid

Respiratory Syncytial Virus (RSV) is an important human pathogen. Its nucleocapsid (NC), which comprises the negative sense RNA viral genome coated by the viral nucleoprotein N, is a critical assembly that serves as template for both mRNA synthesis and genome replication. We have previously described the X-ray structure of a nucleocapsid-like structure: a decameric ring formed of N-RNA that mimics one turn of the helical NC. In the absence of experimental data we had hypothesized that the NC helix would be right-handed, as the N-N contacts in the ring appeared to more easily adapt to that conformation. We now unambiguously show that the RSV NC is a left-handed helix. We further show that the contacts in the ring can be distorted to maintain key N-N protein interactions in a left-handed helix, and discuss the implications of the resulting atomic model of the helical NC for viral replication and transcription

Essays in Corporate Finance

This dissertation presents two essays in Corporate Finance. In the first essay, I study how political institutions affect corporate investment through the policy uncertainty channel. I examine investment response to changes in the ability of the governing party to implement its political agenda due to checks and balances. I use US gubernatorial elections from 1978 to 2010 and a regression discontinuity design to estimate the causal effects of giving a single party full versus split control over a state government. I find that shifts from a divided to a unified government depress investment and job creation. Investment drops by an average of 3 to 5 percent in the year after the election giving a single party control of the government. The effect is not limited to public firms, is stronger for firms operating in a single state and firms with more irreversible investment. The findings support the hypothesis that moving from divided to unified government translates into policy uncertainty, which in turn affects the investment and employment cycles. The second essay is joint with William Mullins and Christophe Cahn. How to support private lending to SMEs during aggregate contractions is a crucial but still open policy question. This paper exploits an unexpected drop in 2012 in the cost of funding bank loans to some firms but not others in France to uncover how banks adjust their SME lending portfolios in a crisis. The cost reduction causes bank debt to rise and payment defaults with suppliers to fall, providing evidence that funding cost can be an effective policy lever. The effect is driven by firms with only one bank relationship, a numerous but understudied group. The size of the effect varies, with additional credit flowing to firms with stronger observables, to high growth firms, to firms with high demand, and to firms with a deeper banking relationship. Further, a richer relationship appears to substitute for stronger observables in the lending decision. Finally, we provide suggestive evidence that, compared to multi-bank firms, single bank firms are particularly credit constrained in crisis periods

Central ions and lateral asparagine/glutamine zippers stabilize the post-fusion hairpin conformation of the SARS coronavirus spike glycoprotein

AbstractThe coronavirus spike glycoprotein is a class I membrane fusion protein with two characteristic heptad repeat regions (HR1 and HR2) in its ectodomain. Here, we report the X-ray structure of a previously characterized HR1/HR2 complex of the severe acute respiratory syndrome coronavirus spike protein. As expected, the HR1 and HR2 segments are organized in antiparallel orientations within a rod-like molecule. The HR1 helices form an exceptionally long (120 Å) internal coiled coil stabilized by hydrophobic and polar interactions. A striking arrangement of conserved asparagine and glutamine residues of HR1 propagates from two central chloride ions, providing hydrogen-bonding “zippers” that strongly constrain the path of the HR2 main chain, forcing it to adopt an extended conformation at either end of a short HR2 α-helix

Plate tectonics of virus shell assembly and reorganization in phage φ8, a distant relative of mammalian reoviruses

The hallmark of a virus is its capsid, which harbors the viral genome and is formed from protein subunits, which assemble following precise geometric rules. dsRNA viruses use an unusual protein multiplicity (120 copies) to form their closed capsids. We have determined the atomic structure of the capsid protein (P1) from the dsRNA cystovirus Φ8. In the crystal P1 forms pentamers, very similar in shape to facets of empty procapsids, suggesting an unexpected assembly pathway that proceeds via a pentameric intermediate. Unlike the elongated proteins used by dsRNA mammalian reoviruses, P1 has a compact trapezoid-like shape and a distinct arrangement in the shell, with two near-identical conformers in nonequivalent structural environments. Nevertheless, structural similarity with the analogous protein from the mammalian viruses suggests a common ancestor. The unusual shape of the molecule may facilitate dramatic capsid expansion during phage maturation, allowing P1 to switch interaction interfaces to provide capsid plasticity

Conformational Reorganization of the SARS Coronavirus Spike Following Receptor Binding: Implications for Membrane Fusion

The SARS coronavirus (SARS-CoV) spike is the largest known viral spike molecule, and shares a similar function with all class 1 viral fusion proteins. Previous structural studies of membrane fusion proteins have largely used crystallography of static molecular fragments, in isolation of their transmembrane domains. In this study we have produced purified, irradiated SARS-CoV virions that retain their morphology, and are fusogenic in cell culture. We used cryo-electron microscopy and image processing to investigate conformational changes that occur in the entire spike of intact virions when they bind to the viral receptor, angiotensin-converting enzyme 2 (ACE2). We have shown that ACE2 binding results in structural changes that appear to be the initial step in viral membrane fusion, and precisely localized the receptor-binding and fusion core domains within the entire spike. Furthermore, our results show that receptor binding and subsequent membrane fusion are distinct steps, and that each spike can bind up to three ACE2 molecules. The SARS-CoV spike provides an ideal model system to study receptor binding and membrane fusion in the native state, employing cryo-electron microscopy and single-particle image analysis