Rethinking market discipline in banking : lessons from the financial crisis

The main objective of this paper is to rethink the use of market discipline for prudential purposes in light of lessons from the financial crisis. The paper develops the main building blocks of a market discipline framework, and argues for the need to take an expansive view of the concept. It also illustrates using actual bank case studies from the United States its apparent failures in the crisis, particularly the failure to prevent the buildup of systemic, as opposed to idiosyncratic, risks. However, while the role of market discipline in the design of macro-prudential regulation appears to be largely constrained, more can be done on the micro-prudential side to promote clearer market signals of bank riskiness and to encourage their use in the supervisory process.Banks&Banking Reform,Debt Markets,Markets and Market Access,Emerging Markets,Access to Finance

Including financial services in preferential trade agreements : lessons of international experience for China

The objective of this paper is to address the main considerations for China of including financial services in its preferential trade agreements. The paper briefly reviews China's financial liberalization process and the state of its domestic financial system, discusses the main considerations of including financial services in China's preferential trade agreements, compares and contrasts the different'architectural'approaches that have been used by countries to include financial services in such agreements, and identifies good practices in preparing for financial services negotiations. Particular emphasis is placed on lessons from Latin American preferential trade agreements, given their more frequent and extensive coverage of financial services compared with other regions.Emerging Markets,Banks&Banking Reform,Trade Law,Trade and Services,

Banking in Brazil: Structure, Performance, Drivers, and Policy Implications

he objective of this paper is to analyze the industry structure of banking services in Brazil in order to shed light on financial performance and its drivers at a disaggregated level. The study illustrates how differences across market segments -- which tend to be averaged out in aggregate analysis -- need to be taken into account when analyzing performance and designing public policy for the banking sector. In particular, retail banking is found to be less sensitive to price competition and to exhibit considerably higher returns than corporate banking. The authors identify and discuss the factors underlying revenues, costs, and risks in each market segment, and conclude with policy implications.Brazil; banking; competition; industry structure; performance

Financing of the private sector in Mexico, 2000-05 : evolution, composition, and determinants

The objective of this paper is to describe the evolution, composition, and determinants of financing to the nonfinancial private sector in Mexico between 2000 and 2005. Supported by the macroeconomic environment and financial system reforms, total financing to the private sector (particularly consumer credit) increased relative to GDP, while accessibilityand affordability generally improved. Equity issuance did not play an important role during the period under consideration. Although the supply of financing shifted toward domestic nonbank providers, commercial banks remain the primary source of funding. Significant progress was made in cleaning up bank loan portfolios and in strengthening financial system soundness and infrastructure. The prospects for continued private sector financing growth remain very positive, but financing is not spread out evenly across all market segments. The authors conclude with some policy implications to further facilitate deeper and broader financing of the private sector.Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Public Sector Economics&Finance,Financial Crisis Management&Restructuring

Credit risk measurement under Basel II : an overview and implementation issues for developing countries

The objective of this paper is to provide an overview of the changes in the calculation of minimum regulatory capital requirements for credit risk that have been drafted by the Basel Committee on Banking Supervision (Basel II). Even though the revised credit capital rules represent a dramatic change compared to Basel I, it is shown that Basel II merely seeks to codify (albeit incompletely) existing good practices in bank risk measurement. However, its effective implementation in many developing countries is hindered by fundamental weaknesses in financial infrastructure that will need to be addressed as a priority.Banks&Banking Reform,Banking Law,Insurance&Risk Mitigation,Financial Intermediation,Economic Theory&Research

Reproductive Biology Of The Shi Drum (Umbrina Cirrosa) In Captivity And Induction Of Spawning Using Gnrha

The reproductive biology of the shi drum (Umbrina cirrosa) in culture was histologically exam- ined and sperm quality was monitored during an entire reproductive period. Already in April, the ovary contained oocytes in all stages of maturation, from primary oocytes to full vitellogenesis, as expected from a group-synchronous multiple-batch spawning fish. Vitellogenesis of the first batch of oocytes occurred very rapidly and their mean diameter (500 μm) did not increase sig- nificantly (p>0.05) as the reproductive period proceeded. The spermiation index peaked in May- June, but fish never produced copious amounts of milt upon abdominal pressure. The sperma- tozoa motility percentage remained unchanged throughout the spawning season (80%) and a significant percentage (40%) maintained viability after overnight storage at 4°C. Sperm density and motility duration increased during the reproductive period and varied 13-26 x109 spermato- zoa/ml and 26-40 s, respectively. Spontaneous spawning was not observed during the two-year study. Injection of post-vitellogenic females with an agonist of gonadotropin-releasing hormone (GnRHa) was successful in inducing a single spawning after two days, with fertilization, hatch- ing and 4-day larval survival rates of 65%, 42-76% and 46-80%, respectively. The results under- line the failure of female shi drum in culture to undergo final oocyte maturation and, although GnRHa injection was effective in inducing spawning of viable eggs, multiple treatments did not induce multiple spawns, as was expected from fish with multiple-batch group-synchronous ovar- ian biology

Rapid and Sensitive Assessment of Globin Chains for Gene and Cell Therapy of Hemoglobinopathies

The β-hemoglobinopathies sickle cell anemia and β-thalassemia are the focus of many gene-therapy studies. A key disease parameter is the abundance of globin chains because it indicates the level of anemia, likely toxicity of excess or aberrant globins, and therapeutic potential of induced or exogenous β-like globins. Reversed-phase high-performance liquid chromatography (HPLC) allows versatile and inexpensive globin quantification, but commonly applied protocols suffer from long run times, high sample requirements, or inability to separate murine from human β-globin chains. The latter point is problematic for in vivo studies with gene-addition vectors in murine disease models and mouse/human chimeras. This study demonstrates HPLC-based measurements of globin expression (1) after differentiation of the commonly applied human umbilical cord blood-derived erythroid progenitor-2 cell line, (2) in erythroid progeny of CD34+ cells for the analysis of clustered regularly interspaced short palindromic repeats/Cas9-mediated disruption of the globin regulator BCL11A, and (3) of transgenic mice holding the human β-globin locus. At run times of 8 min for separation of murine and human β-globin chains as well as of human γ-globin chains, and with routine measurement of globin-chain ratios for 12 nL of blood (tested for down to 0.75 nL) or of 300,000 in vitro differentiated cells, the methods presented here and any variant-specific adaptations thereof will greatly facilitate evaluation of novel therapy applications for β-hemoglobinopathies

Public debt management and debt market development in Cyprus: Evolution, current challenges and policy options

Abstract The main objectives of this paper are to describe the evolution and current challenges of public debt management and debt market development in Cyprus in order to identify relevant policy options for the authorities. Although significant progress has recently been made in terms of using market-based mechanisms and adopting a more sound public debt composition, there remain important weaknesses that need to be addressed in view of the forthcoming Eurozone entry. Three main (and mutually reinforcing) challenges are identified and analyzed: institutional arrangements for public debt management, modernization of the government debt market, and upgrading investment management skills of domestic institutional investors. The proposed reform agenda is fairly ambitious and calls for an integrated approach given the inter-linkages between reforms. What is important going forward is for the authorities to promptly resolve outstanding issues and prepare the groundwork for the introduction of these reforms via a carefully sequenced roadmap

Big Banks In Small Countries: The Case Of Cyprus †

Abstract A large banking system has served Cyprus well to date. It has supported the country's outward-oriented, services-driven economic model and has significantly contributed to output and employment. The question going forward is whether banking system growth can continue indefinitely and at what cost. This paper argues that systemic risks are important for Cyprus given its banking system size and structure -in particular, the presence of big domestically-owned banks. It recommends that the authorities take a more macroprudential approach to financial sector oversight, that they engage in an immediate and significant fiscal consolidation effort, and that they introduce a set of prudential measures for systemically important banks that are customized to the needs of Cyprus