Corporate Governance in European Banks: Essays on Bank Ownership

Banks are important as they have a central role in the financial system, where funds are channelled either through financial intermediaries, such as banks, or through financial markets, hence promoting growth in any economy. Recently, we have been reminded of the drawbacks of the central role of banks. The current financial crisis, which started out as a sub-prime mortgage crisis in the US, has become a global financial crisis with substantial impact on the real economy in many countries. Some of the roots to the current financial crisis can be sought in the changing role of banks and in bank corporate governance. Moreover, the substantial revitalising measures taken have been justified by the central role of banks. Not only are banks important, they are also very special. The fact that banks are regulated in conjunction with greater opacity, make bank corporate governance different from corporate governance in non-bank companies. Surprisingly little is, however, known about bank corporate governance, in particularly, in a European setting. Hence, the objective of this doctoral thesis is to provide new insights in this research area by examining banks from 37 different European countries. Each of the three essays included in the doctoral thesis examines a particular aspect of bank corporate governance. In the first essay the interaction between the regulatory environment a bank operates in and its ownership structure is explored. Indicators of the severity of the moral hazard problem induced by the deposit insurance system and implicit too-big-to-fail government guarantee, particular features of deposit insurance systems as well as legal protection of shareholders, legal origin of a country and level of integration to the European community are used in the analysis. The empirical findings confirm previous findings on the link between legal protection of shareholders and ownership structure. Moreover, they show that differences in deposit insurance system features can explain some of the differences in ownership structure across European banks. In the second essay the impact of management and board ownership on the profitability of banks with different strategy is examined. The empirical findings suggest that the efficiency of these two particular corporate governance mechanisms varies with the characteristics of the agency problem faced by the bank. More specifically, management ownership is important in opaque non-traditional banks, whereas board ownership is important in traditional banks, where deposit insurance reduces the monitoring incentives of outsiders. The higher profitability does, however, go together with higher risk. In the third essay the profitability and risk of commercial, savings and cooperative banks are compared. The empirical findings suggest that distinct operational and ownership characteristics rather than only the mere fact that a bank is a commercial, savings or cooperative bank explain the profitability and risk differences. The main insight from the three essays is that a number of different aspects should be addressed simultaneously in order to give the complexity of bank corporate governance justice.

Light scattering in random media with wavelength-scale structures : astronomical and industrial applications

Light scattering, or scattering and absorption of electromagnetic waves, is an important tool in all remote-sensing observations. In astronomy, the light scattered or absorbed by a distant object can be the only source of information. In Solar-system studies, the light-scattering methods are employed when interpreting observations of atmosphereless bodies such as asteroids, atmospheres of planets, and cometary or interplanetary dust. Our Earth is constantly monitored from artificial satellites at different wavelengths. With remote sensing of Earth the light-scattering methods are not the only source of information: there is always the possibility to make in situ measurements. The satellite-based remote sensing is, however, superior in the sense of speed and coverage if only the scattered signal can be reliably interpreted. The optical properties of many industrial products play a key role in their quality. Especially for products such as paint and paper, the ability to obscure the background and to reflect light is of utmost importance. High-grade papers are evaluated based on their brightness, opacity, color, and gloss. In product development, there is a need for computer-based simulation methods that could predict the optical properties and, therefore, could be used in optimizing the quality while reducing the material costs. With paper, for instance, pilot experiments with an actual paper machine can be very time- and resource-consuming. The light-scattering methods presented in this thesis solve rigorously the interaction of light and material with wavelength-scale structures. These methods are computationally demanding, thus the speed and accuracy of the methods play a key role. Different implementations of the discrete-dipole approximation are compared in the thesis and the results provide practical guidelines in choosing a suitable code. In addition, a novel method is presented for the numerical computations of orientation-averaged light-scattering properties of a particle, and the method is compared against existing techniques. Simulation of light scattering for various targets and the possible problems arising from the finite size of the model target are discussed in the thesis. Scattering by single particles and small clusters is considered, as well as scattering in particulate media, and scattering in continuous media with porosity or surface roughness. Various techniques for modeling the scattering media are presented and the results are applied to optimizing the structure of paper. However, the same methods can be applied in light-scattering studies of Solar-system regoliths or cometary dust, or in any remote-sensing problem involving light scattering in random media with wavelength-scale structures.

3D MHD simulations of subsurface convection in OB stars

During their main sequence evolution, massive stars can develop convective regions very close to their surface. These regions are caused by an opacity peak associated with iron ionization. Cantiello et al. (2009) found a possible connection between the presence of sub-photospheric convective motions and small scale stochastic velocities in the photosphere of early-type stars. This supports a physical mechanism where microturbulence is caused by waves that are triggered by subsurface convection zones. They further suggest that clumping in the inner parts of the winds of OB stars could be related to subsurface convection, and that the convective layers may also be responsible for stochastic excitation of non-radial pulsations. Furthermore, magnetic fields produced in the iron convection zone could appear at the surface of such massive stars. Therefore subsurface convection could be responsible for the occurrence of observable phenomena such as line profile variability and discrete absorption components. These phenomena have been observed for decades, but still evade a clear theoretical explanation. Here we present preliminary results from 3D MHD simulations of such subsurface convection.

Demi-glace-kastikepohjan valmistuksen optimointi ylipainekeittomenetelmälle

Tämän tutkimuksen kirjallisuusosan tavoitteena oli selvittää perinteisen kastikepohjan valmistukseen ja valmistuksen kokonaisvaltaiseen onnistumiseen vaikuttavia seikkoja. Lisäksi käsiteltiin kastikepohjan valmistukseen liittyviä ympäristö- ja energia-asioita, kuten eläinperäisten sivutuotteiden kierrätysmahdollisuuksia. Kokeellisessa osassa tutkimuksen keskeinen lähtökohta oli pyrkiä löytämään ratkaisu ylipainekeittomenetelmään liittyvään kastikepohjan liemiaineksen sameutumisongelmaan. Tutkimuksessa haluttiin löytää syyt sameuden muodostumiseen luiden painekeitossa (max. 1,5 bar). Näin pyrittiin selvittämään keinot sameuden syntymisen estämiseen tai tuotteesta poistamiseen. Ratkaisua etsittiin sekä keittoaika-paine-kombinaatiosta että proteolyyttisen entsyymivalmisteen käytöstä. Tavoitteena oli ulkonäöltään kirkas ja kuiva-ainepitoisuudeltaan mahdollisimman korkea naudanmakuinen demi-glace-kastikepohjaliemi. Liemiaineksista tarkasteltiin kuiva-aine-, kokonaisproteiini- ja sidekudosproteiinipitoisuuksia, pH-arvoja sekä sameutta, ja vertailtiin näitä tuloksia käytettyihin valmistusmenetelmiin ja -olosuhteisiin. Lisäksi otettiin selvää lämmöntalteenoton parantamis-mahdollisuuksista. Tutkimuksessa valmistetun kastikepohjaliemen kuiva-aine koostui pääasiassa proteiineista. Liemen valmistuksessa suuremmalla paineella päästiin hieman nopeammin samoihin kuiva-ainepitoisuuksiin kuin matalammalla paineella. Samoin tapahtui entsyymiä käytettäessä kuin käyttämättä jätettäessä. Tämän tutkimuksen perusteella korkeaa kuiva-ainepitoisuutta tavoiteltaessa kastikepohjaliemen valmistuksessa on valittava korkean sidekudosproteiinin tai sameuden väliltä. Ylipainekeitolla luista saatiin irti lähes pelkästään sidekudosproteiinia, koska luita kuumennettaessa vain kollageeni liukeni veteen muiden proteiinien saostuessa. Lämmöntalteenottojärjestelmien rakentaminen pieneen elintarviketeollisuusyritykseen voi olla kannattamatonta, koska investointikustannuksia ei välttämättä pystytä maksamaan takaisin. Energiatehokkuuden parantaminen pienessä elintarviketeollisuusyrityksessä on haastavaa, mutta kuitenkin mahdollista ammattilaisten tekemien tarkkojen laskelmien ja arviointien avulla.