Measuring and testing for the systemically important financial institutions

This paper analyzes the measure of systemic importance ∆CoV aR proposed by Adrian and Brunnermeier (2009, 2010) within the context of a similar class of risk measures used in the risk management literature. In addition, we develop a series of testing procedures, based on ∆CoV aR, to identify and rank the systemically important institutions. We stress the importance of statistical testing in interpreting the measure of systemic importance. An empirical application illustrates the testing procedures, using equity data for three European banks.

Empowering IDP with SMS: a randomized controlled trial in Bogotá

We carried out a randomized controlled trial in Bogotá, the recipient of Colombia´s highest number of internally displaced people (IDP), to assess whether the use of SMS to communicate eligibility to social benefits fosters the welfare of victimized internal refugees. Only a fraction of IDP are elegible to benefits. We inform eligibility via SMS to a random half of IDP-households who are, and estimate the Local Average Treatment Effect of the text message on the knowledge of the benefits available tothe displaced population. We show that while on the average treated households know their rights better than controls, a more disaggregate analysis suggest that there is variation of awareness across benefits. The intervention was overall successful in empowering IDP and the use of SMS should be widened as a social policy instrument. However our results suggest that text messages should be complemented with other communication strategies, yet to be evaluated.