Essays on Banking Crises

This thesis aims at finding the role of deposit insurance scheme and central bank (CB) in keeping the banking system safe. The thesis also studies the factors associated with long-lasting banking crises. The first essay analyzes the effect of using explicit deposit insurance scheme (EDIS), instead of using implicit deposit insurance scheme (IDIS), on banking crises. The panel data for the period of 1980-2003 includes all countries for which the data on EDIS or IDIS exist. 70% of the countries in the sample are less developed countries (LDCs). About 55% of the countries adopting EDIS also come from LDCs. The major finding is that the using of EDIS increases the crisis probability at a strong significance level. This probability is greater if the EDIS is inefficiently designed allowing higher scope of moral hazard problem. Specifically, the probability is greater if the EDIS provides higher coverage to deposits and if it is less powerful from the legal point of view. This study also finds that the less developed a country is to handle EDIS, the higher the chance of banking crisis. Once the underdevelopment of an economy handling the EDIS is controlled, the EDIS separately is no longer a significant factor of banking crises. The second essay aims at determining whether a country s powerful CB can lessen the instability of the banking sector by minimizing the likelihood of a banking crisis. The data used include indicators of the CB s autonomy for a set of countries over the period of 1980-89. The study finds that in aggregate a more powerful CB lessens the probability of banking crisis. When the CB s authority is disentangled with respect to its responsibilities, the study finds that the longer tenure of CB s chief executive officer and the greater power of CB in assigning interest rate on government loans are necessary for reducing the probability of banking crisis. The study also finds that the probability of crisis reduces more if an autonomous CB can perform its duties in a country with stronger law and order tradition. The costs of long-lasting banking crises are high because both the depositors and the investors lose confidence in the banking system. For a rapid recovery of a crisis, the government very often undertakes one or more crisis resolution policy (CRP) measures. The third essay examines the CRP and other explanatory variables correlated with the durations of banking crises. The major finding is that the CRP measure allowing the regulation forbearance to keep the insolvent banks operative and the public debt relief program are respectively strongly and weakly significant to increase the durations of crises. Some other explanatory variables, which were found by previous studies to be related with the probability of crises to occur, are also correlated with the durations of crises.

Prevention of type 2 diabetes with lifestyle intervention - emphasis on dietary composition and identification of high-risk individuals

Type 2 diabetes is an increasing, serious, and costly public health problem. The increase in the prevalence of the disease can mainly be attributed to changing lifestyles leading to physical inactivity, overweight, and obesity. These lifestyle-related risk factors offer also a possibility for preventive interventions. Until recently, proper evidence regarding the prevention of type 2 diabetes has been virtually missing. To be cost-effective, intensive interventions to prevent type 2 diabetes should be directed to people at an increased risk of the disease. The aim of this series of studies was to investigate whether type 2 diabetes can be prevented by lifestyle intervention in high-risk individuals, and to develop a practical method to identify individuals who are at high risk of type 2 diabetes and would benefit from such an intervention. To study the effect of lifestyle intervention on diabetes risk, we recruited 522 volunteer, middle-aged (aged 40 - 64 at baseline), overweight (body mass index > 25 kg/m2) men (n = 172) and women (n = 350) with impaired glucose tolerance to the Diabetes Prevention Study (DPS). The participants were randomly allocated either to the intensive lifestyle intervention group or the control group. The control group received general dietary and exercise advice at baseline, and had annual physician's examination. The participants in the intervention group received, in addition, individualised dietary counselling by a nutritionist. They were also offered circuit-type resistance training sessions and were advised to increase overall physical activity. The intervention goals were to reduce body weight (5% or more reduction from baseline weight), limit dietary fat (< 30% of total energy consumed) and saturated fat (< 10% of total energy consumed), and to increase dietary fibre intake (15 g / 1000 kcal or more) and physical activity (≥ 30 minutes/day). Diabetes status was assessed annually by a repeated 75 g oral glucose tolerance testing. First analysis on end-points was completed after a mean follow-up of 3.2 years, and the intervention phase was terminated after a mean duration of 3.9 years. After that, the study participants continued to visit the study clinics for the annual examinations, for a mean of 3 years. The intervention group showed significantly greater improvement in each intervention goal. After 1 and 3 years, mean weight reductions were 4.5 and 3.5 kg in the intervention group and 1.0 kg and 0.9 kg in the control group. Cardiovascular risk factors improved more in the intervention group. After a mean follow-up of 3.2 years, the risk of diabetes was reduced by 58% in the intervention group compared with the control group. The reduction in the incidence of diabetes was directly associated with achieved lifestyle goals. Furthermore, those who consumed moderate-fat, high-fibre diet achieved the largest weight reduction and, even after adjustment for weight reduction, the lowest diabetes risk during the intervention period. After discontinuation of the counselling, the differences in lifestyle variables between the groups still remained favourable for the intervention group. During the post-intervention follow-up period of 3 years, the risk of diabetes was still 36% lower among the former intervention group participants, compared with the former control group participants. To develop a simple screening tool to identify individuals who are at high risk of type 2 diabetes, follow-up data of two population-based cohorts of 35-64 year old men and women was used. The National FINRISK Study 1987 cohort (model development data) included 4435 subjects, with 182 new drug-treated cases of diabetes identified during ten years, and the FINRISK Study 1992 cohort (model validation data) included 4615 subjects, with 67 new cases of drug-treated diabetes during five years, ascertained using the Social Insurance Institution's Drug register. Baseline age, body mass index, waist circumference, history of antihypertensive drug treatment and high blood glucose, physical activity and daily consumption of fruits, berries or vegetables were selected into the risk score as categorical variables. In the 1987 cohort the optimal cut-off point of the risk score identified 78% of those who got diabetes during the follow-up (= sensitivity of the test) and 77% of those who remained free of diabetes (= specificity of the test). In the 1992 cohort the risk score performed equally well. The final Finnish Diabetes Risk Score (FINDRISC) form includes, in addition to the predictors of the model, a question about family history of diabetes and the age category of over 64 years. When applied to the DPS population, the baseline FINDRISC value was associated with diabetes risk among the control group participants only, indicating that the intensive lifestyle intervention given to the intervention group participants abolished the diabetes risk associated with baseline risk factors. In conclusion, the intensive lifestyle intervention produced long-term beneficial changes in diet, physical activity, body weight, and cardiovascular risk factors, and reduced diabetes risk. Furthermore, the effects of the intervention were sustained after the intervention was discontinued. The FINDRISC proved to be a simple, fast, inexpensive, non-invasive, and reliable tool to identify individuals at high risk of type 2 diabetes. The use of FINDRISC to identify high-risk subjects, followed by lifestyle intervention, provides a feasible scheme in preventing type 2 diabetes, which could be implemented in the primary health care system.

Functional and work disability and treatment received by patients with major depressive disorder

This study is one part of a collaborative depression research project, the Vantaa Depression Study (VDS), involving the Department of Mental and Alcohol Research of the National Public Health Institute, Helsinki, and the Department of Psychiatry of the Peijas Medical Care District (PMCD), Vantaa, Finland. The VDS includes two parts, a record-based study consisting of 803 patients, and a prospective, naturalistic cohort study of 269 patients. Both studies include secondary-level care psychiatric out- and inpatients with a new episode of major depressive disorder (MDD). Data for the record-based part of the study came from a computerised patient database incorporating all outpatient visits as well as treatment periods at the inpatient unit. We included all patients aged 20 to 59 years old who had been assigned a clinical diagnosis of depressive episode or recurrent depressive disorder according to the International Classification of Diseases, 10th edition (ICD-10) criteria and who had at least one outpatient visit or day as an inpatient in the PMCD during the study period January 1, 1996, to December 31, 1996. All those with an earlier diagnosis of schizophrenia, other non-affective psychosis, or bipolar disorder were excluded. Patients treated in the somatic departments of Peijas Hospital and those who had consulted but not received treatment from the psychiatric consultation services were excluded. The study sample comprised 290 male and 513 female patients. All their psychiatric records were reviewed and each patient completed a structured form with 57 items. The treatment provided was reviewed up to the end of the depression episode or to the end of 1997. Most (84%) of the patients received antidepressants, including a minority (11%) on treatment with clearly subtherapeutic low doses. During the treatment period the depressed patients investigated averaged only a few visits to psychiatrists (median two visits), but more to other health professionals (median seven). One-fifth of both genders were inpatients, with a mean of nearly two inpatient treatment periods during the overall treatment period investigated. The median length of a hospital stay was 2 weeks. Use of antidepressants was quite conservative: The first antidepressant had been switched to another compound in only about one-fifth (22%) of patients, and only two patients had received up to five antidepressant trials. Only 7% of those prescribed any antidepressant received two antidepressants simultaneously. None of the patients was prescribed any other augmentation medication. Refusing antidepressant treatment was the most common explanation for receiving no antidepressants. During the treatment period, 19% of those not already receiving a disability pension were granted one due to psychiatric illness. These patients were nearly nine years older than those not pensioned. They were also more severely ill, made significantly more visits to professionals and received significantly more concomitant medications (hypnotics, anxiolytics, and neuroleptics) than did those receiving no pension. In the prospective part of the VDS, 806 adult patients were screened (aged 20-59 years) in the PMCD for a possible new episode of DSM-IV MDD. Of these, 542 patients were interviewed face-to-face with the WHO Schedules for Clinical Assessment in Neuropsychiatry (SCAN), Version 2.0. Exclusion criteria were the same as in the record-based part of the VDS. Of these, 542 269 patients fulfiled the criteria of DSM-IV MDE. This study investigated factors associated with patients' functional disability, social adjustment, and work disability (being on sick-leave or being granted a disability pension). In the beginning of the treatment the most important single factor associated with overall social and functional disability was found to be severity of depression, but older age and personality disorders also significantly contributed. Total duration and severity of depression, phobic disorders, alcoholism, and personality disorders all independently contributed to poor social adjustment. Of those who were employed, almost half (43%) were on sick-leave. Besides severity and number of episodes of depression, female gender and age over 50 years strongly and independently predicted being on sick-leave. Factors influencing social and occupational disability and social adjustment among patients with MDD were studied prospectively during an 18-month follow-up period. Patients' functional disability and social adjustment were alleviated during the follow-up concurrently with recovery from depression. The current level of functioning and social adjustment of a patient with depression was predicted by severity of depression, recurrence before baseline and during follow-up, lack of full remission, and time spent depressed. Comorbid psychiatric disorders, personality traits (neuroticism), and perceived social support also had a significant influence. During the 18-month follow-up period, of the 269, 13 (5%) patients switched to bipolar disorder, and 58 (20%) dropped out. Of the 198, 186 (94%) patients were at baseline not pensioned, and they were investigated. Of them, 21 were granted a disability pension during the follow-up. Those who received a pension were significantly older, more seldom had vocational education, and were more often on sick-leave than those not pensioned, but did not differ with regard to any other sociodemographic or clinical factors. Patients with MDD received mostly adequate antidepressant treatment, but problems existed in treatment intensity and monitoring. It is challenging to find those at greatest risk for disability and to provide them adequate and efficacious treatment. This includes great challenges to the whole society to provide sufficient resources.