Europe’s New Post-Trade Infrastructure Rules. ECMI Policy Brief No. 20, 8 November 2012

After more than a decade of indecision, the EU is finally now set to implement a consistent regulatory architecture for clearing and settlement. Following the agreement on a European market infrastructure Regulation (EMIR), the European Commission has proposed harmonised rules for centralised settlement depositaries (CSDs), while the European Central Bank is moving forward with its plans for a central eurozone settlement engine. This paper analyses three components of the new post-trade infrastructure measures: 1) the regulatory framework for and supervision of central counterparties under the new EMIR legislation, 2) the authorisation requirements of trade repositories and 3) the draft CSD Regulation and the progress with the ECB’s Target 2 Securities project. It then discusses the impact of the new rules, and argues that, analogous to the unexpected impact of MiFID on trading infrastructures, a similar EMIR revolution may be on its way

Super-Eddington growth of the first black holes

The assembly of the first super massive black holes (SMBHs) at z ≳ 6 is still a subject of intense debate. If black holes (BHs) grow at their Eddington rate, they must start from ≳104 M⊙ seeds formed by the direct collapse of gas. Here, we explore the alternative scenario where ˜100 M⊙ BH remnants of the first stars grow at super-Eddington rate via radiatively inefficient slim accretion discs. We use an improved version of the cosmological, data-constrained semi-analytic model GAMETE/QSODUST, where we follow the evolution of nuclear BHs and gas cooling, disc and bulge formation of their host galaxies. Adopting SDSS J1148+5251 (J1148) at z = 6.4 as a prototype of luminous z ≳ 6 quasars, we find that ˜80 per cent of its SMBH mass is grown by super-Eddington accretion, which can be sustained down to z ˜ 10 in dense, gas-rich environments. The average BH mass at z ˜ 20 is MBH ≳ 104 M⊙, comparable to that of direct collapse BHs. At z = 6.4 the AGN-driven mass outflow rate is consistent with the observations and the BH-to-bulge mass ratio is compatible with the local scaling relation. However, the stellar mass in the central 2.5 kpc is closer to the value inferred from CO observations. Finally, ˜20 per cent of J1148 progenitors at z = 7.1 have BH luminosities and masses comparable to ULAS J1120+0641, suggesting that this quasar may be one of the progenitors of J1148

On the formation of the first quasars

Observations of the most luminous quasars at redshift z>6 reveal the existence of numerous supermasssive black holes (>10^9 Msun) already in place about twelve billion years ago. In addition, the interstellar medium of the galaxies hosting these black holes are observed to be chemically mature systems, with metallicities (Z>Zsun) and dust masses (>10^8 Msun) similar to that of more evolved, local galaxies. The connection between the rapid growth of the first supermassive black holes and the fast chemical evolution of the host galaxy is one of the most puzzling issues for theoretical models. Here we review state-of-the-art theoretical models that focus on this problem with particular emphasis on the conditions that lead to the formation of quasar seeds and their subsequent evolution at z>6

Chasing the observational signatures of seed black holes at z > 7: candidate statistics

Supermassive black holes (SMBHs) of 10^9-10^10 Msun were already in place ~13 Gyr ago, at z>6. Super-Eddington growth of low-mass BH seeds (~100 Msun) or less extreme accretion onto ~10^5 Msun seeds have been recently considered as the main viable routes to these SMBHs. Here we study the statistics of these SMBH progenitors at z~6. The growth of low- and high-mass seeds and their host galaxies are consistently followed using the cosmological data constrained model GAMETE/QSOdust, which reproduces the observed properties of high-z quasars, like SDSS J1148+5251. We show that both seed formation channels can be in action over a similar redshift range, 15 < z < 18 and are found in dark matter halos with comparable mass, ~5x10^7 Msun. However, as long as the systems evolve in isolation (i.e. no mergers occur), noticeable differences in their properties emerge: at z>= 10 galaxies hosting high-mass seeds have smaller stellar mass and metallicity, the BHs accrete gas at higher rates and star formation proceeds less efficiently than in low-mass seeds hosts. At z<10 these differences are progressively erased, as the systems experience minor or major mergers and every trace of the BH origin gets lost.Comment: accepted for publication in MNRA

High-redshift quasars host galaxies: is there a stellar mass crisis?

We investigate the evolutionary properties of a sample of quasars at 5<z<6.4 using the semi-analytical hierarchical model GAMETE/QSOdust. We find that the observed properties of these quasars are well reproduced by a common formation scenario in which stars form according to a standard IMF, via quiescent star formation and efficient merger-driven bursts, while the central BH grows via gas accretion and BH-BH mergers. Eventually, a strong AGN driven wind starts to clear up the ISM of dust and gas, damping the star formation and un-obscuring the line of sight toward the QSO. In this scenario, all the QSOs hosts have final stellar masses in the range $(4-6)\times 10^{11} M_{sun}$, a factor 3-30 larger than the upper limits allowed by the observations. We discuss alternative scenarios to alleviate this apparent tension: the most likely explanation resides in the large uncertainties that still affect dynamical mass measurements in these high-z galaxies. In addition, during the transition between the starburst-dominated and the active QSO phase, we predict that about 40% of the progenitor galaxies can be classified as Sub Millimeter Galaxies, although their number rapidly decreases with redshift.Comment: 14 pages, 9 figures, accepted for publication in MNRA

From the first stars to the first black holes

The growth of the first super massive black holes (SMBHs) at z > 6 is still a major challenge for theoretical models. If it starts from black hole (BH) remnants of Population III stars (light seeds with mass ~ 100 Msun) it requires super-Eddington accretion. An alternative route is to start from heavy seeds formed by the direct collapse of gas onto a ~ 10^5 Msun BH. Here we investigate the relative role of light and heavy seeds as BH progenitors of the first SMBHs. We use the cosmological, data constrained semi-analytic model GAMETE/QSOdust to simulate several independent merger histories of z > 6 quasars. Using physically motivated prescriptions to form light and heavy seeds in the progenitor galaxies, we find that the formation of a few heavy seeds (between 3 and 30 in our reference model) enables the Eddington-limited growth of SMBHs at z > 6. This conclusion depends sensitively on the interplay between chemical, radiative and mechanical feedback effects, which easily erase the conditions that allow the suppression of gas cooling in the low metallicity gas (Z Jcr). We find that heavy seeds can not form if dust cooling triggers gas fragmentation above a critical dust-to-gas mass ratio (D > Dcr). In addition, the relative importance of light and heavy seeds depends on the adopted mass range for light seeds, as this dramatically affects the history of cold gas along the merger tree, by both SN and AGN-driven winds.Comment: 16 pages, 13 figures, accepted for publication in MNRA

The Euro Prisoner's Dilemma. ECMI Commentary No. 32, February 2012

The last intergovernmental agreement among 25 countries and the ESM Treaty will set the ground for greater institutional coordination on fiscal policies among euro area member states. None of these decisions, however, will be able to pull the euro area out of this crisis. The eurozone is trapped in a classic prisoner’s dilemma. The break-up of the euro remains unlikely but the exit strategy will continue to be led by a sequence of rational (but sub-optimal) decisions, which will make the process long and painful

The sustainable growth of the first black holes

Super-Eddington accretion has been suggested as a possible formation pathway of $10^9 \, M_\odot$ supermassive black holes (SMBHs) 800 Myr after the Big Bang. However, stellar feedback from BH seed progenitors and winds from BH accretion disks may decrease BH accretion rates. In this work, we study the impact of these physical processes on the formation of $z \sim 6$ quasar, including new physical prescriptions in the cosmological, data-constrained semi-analytic model GAMETE/QSOdust. We find that the feedback produced by the first stellar progenitors on the surrounding does not play a relevant role in preventing SMBHs formation. In order to grow the $z \gtrsim 6$ SMBHs, the accreted gas must efficiently lose angular momentum. Moreover disk winds, easily originated in super-Eddington accretion regime, can strongly reduce duty cycles. This produces a decrease in the active fraction among the progenitors of $z\sim6$ bright quasars, reducing the probability to observe them

Light and shadows in Europe’s new Action Plan for Capital Markets Union. ECMI Commentary No. 40/5 October 2015

The European Commission’s Action Plan consists, in a nutshell, of a short list of technical proposals and a longer one of (rather general) potential actions. Overall, the plan indeed proposes to achieve some short-term objectives, such as a reduction of listing costs for SMEs, but it lacks long-term vision. The plan bundles actions under rather generic objectives of long-term finance or cross-border investing. Improving the informational infrastructure (e.g. accounting standards, company data) and cross-border enforcement of rules is left to vaguely defined future actions, but these constitute the core of the capital markets infrastructure. Without a well-defined set of measurable objectives, the whole plan may lose political momentum and become an opportunity for interested parties to cherry pick their pet provisions. Building a single market, i.e. removing cross-border obstacles to capital circulation, is too challenging a task to simply appear as one of many items on a long list of general objectives, which incidentally do not include institutional reform. The ultimate risk is that the Commission may just miss a unique opportunity to revamp and improve the financial integration process in Europe after almost a decade of harmful financial retrenchment