Editorial : advancing innovation in accounting research

We live in uncertain times. The sub-prime crisis that commenced in the U.S. in 2007, the global economic crisis that followed, and the recent sovereign debt crisis in various European countries have led to ongoing instability in global financial markets that continues to receive daily media attention. These uncertain times create enormous opportunities for researchers across many disciplines to research capital markets and business practices. From an accounting perspective, accounting regulators have been active in developing new standards to address risk management issues arising from the crises and have continued to develop and refine financial reporting standards. With the adoption of, or transition to international financial reporting standards (IFRS) in many countries, the globalisation of financial reporting standards is close to becoming a reality. However, doubts still remain about whether the IFRS will lead to any real long-term improvement in financial reporting and transparency (see Sunder, 2011)...

Financial Markets, Institutions and Money [3rd ed.]

"The financial system is a key influencer of the health and efficiency of an economy. The role of the financial system is to gather money from people and businesses that currently have more money than they need and transfer it to those that can use it for either business or consumer expenditures. This flow of funds through financial markets and institutions in the Australian economy is huge (in the billions of dollars), affecting business profits, the rate of inflation, interest rates and the production of goods and services. In general, the larger the flow of funds and the more efficient the financial system, the greater the economic output and welfare in the economy. It is not possible to have a modern, complex economy such as that in Australia, without an efficient and sound financial system. The global financial crisis (GFC) of late 2007–09 (and the ensuing European debt crisis), where the global financial market was on the brink of collapse with only significant government intervention stopping a catastrophic global failure of the market, illustrated the importance of the financial system. Financial Markets, Institutions and Money 3rd edition introduces students to the financial system, its operations, and participants. The text offers a fresh, succinct analysis of the financial markets and discusses how the many participants in the financial system interrelate. This includes coverage of regulators, regulations and the role of the Reserve Bank of Australia, that ensure the system’s smooth running, which is essential to a modern economy. The text has been significantly revised to take into account changes in the financial world."---publisher website Table of Contents 1. The financial system - an overview 2. The Monetary Authorities 3. The Reserve Bank of Australia and interest rates 4. The level of interest rates 5. Mathematics of finance 6. Bond Prices and interest rate risk 7. The Structure of Interest Rates 8. Money Markets 9. Bond Markets 10. Equity Markets

Sequencing risk : the worst returns in their worst order

For the first of the baby boomers turning 65 years of age, after a decade littered with financial shocks (dot.com bubble, sub-prime, global financial crisis, sovereign debt), sequencing risk can represent a significant threat to their retirement nest eggs. This paper takes an outcomeoriented approach to the problem, to provide practical insights into how sequencing risk works and the critical dependency of retirement outcomes on sequencing risk. Our analysis challenges the conventional wisdom that it is the accumulated average of investment returns that matter. We show, instead, that it is the realised sequence of returns which largely determines the sustainability of retirement incomes.

Dislodgement of commercial property public debt markets : the case of U.S. and Australia

The paper investigates if there are any discernible trends in the U.S. and Australian commercial property public debt markets with the onset of the global financial crisis (GFC). Commercial mortgage-backed securities and unsecured bonds issued by real estate investment trusts for the period 2000 to Q3:2009 are reviewed. It is shown that events in the equity markets have an impact on the pricing of these two instruments. Furthermore, the impact of subdued activity in these financing instruments on the commercial property market is discussed.

Striving to realise the European idea : judging the news media’s accounts of how the Berlin Wall gave impetus to a new order across Europe

The 1990 European Community was taken by surprise, by the urgency of demands from the newly-elected Eastern European governments to become member countries. Those governments were honouring the mass social movement of the streets, the year before, demanding free elections and a liberal economic system associated with “Europe”. The mass movement had actually been accompanied by much activity within institutional politics, in Western Europe, the former “satellite” states, the Soviet Union and the United States, to set up new structures – with German reunification and an expanded EC as the centre-piece. This paper draws on the writer’s doctoral dissertation on mass media in the collapse of the Eastern bloc, focused on the Berlin Wall – documenting both public protests and institutional negotiations. For example the writer as a correspondent in Europe from that time, recounts interventions of the German Chancellor, Helmut Kohl, at a European summit in Paris nine days after the “Wall”, and separate negotiations with the French President, Francois Mitterrand -- on the reunification, and EU monetary union after 1992. Through such processes, the “European idea” would receive fresh impetus, though the EU which eventuated, came with many altered expectations. It is argued here that as a result of the shock of 1989, a “social” Europe can be seen emerging, as a shared experience of daily life -- especially among people born during the last two decades of European consolidation. The paper draws on the author’s major research, in four parts: (1) Field observation from the strategic vantage point of a news correspondent. This includes a treatment of evidence at the time, of the wishes and intentions of the mass public (including the unexpected drive to join the European Community), and those of governments, (e.g. thoughts of a “Tienanmen Square solution” in East Berlin, versus the non-intervention policies of the Soviet leader, Mikhail Gorbachev). (2) A review of coverage of the crisis of 1989 by major news media outlets, treated as a history of the process. (3) As a comparison, and a test of accuracy and analysis; a review of conventional histories of the crisis appearing a decade later.(4) A further review, and test, provided by journalists responsible for the coverage of the time, as reflection on practice – obtained from semi-structured interviews.

Banking sector contingent liabilities and sovereign risk

The global financial crisis has underscored the need to pay attention to contingent government liabilities that could arise from bank failures for sovereign risk management. This paper proposes a simple method to construct a contingent liability index (CLI) for a banking sector that takes into account the size and concentration of the banking system, market expectations of bank defaults, and perceptions of government support to each bank. This method allows us to track potential government liabilities related to bank failures for 32 advanced and emerging economies on a monthly basis from 2006 to 2013. Furthermore, we find that the CLI is a significant determinant of sovereign CDS spreads. Our results suggest that a 1 percentage point increase in the CLI is associated with an increase in sovereign CDS spreads by 24 basis points for advanced economies and 75 basis points for emerging markets on average.

Governance and effectiveness in regional planning: an analysis of North American, European, and Australasian practice

Over the past several years, there has been resurgent interest in regional planning in North America, Europe and Australasia. Spurred by issues such as metropolitan growth, transportation infrastructure, environmental management and economic development, many states and metropolitan regions are undertaking new planning initiatives. These regional efforts have also raised significant question about governance structures, accountability and measures of effectiveness.n this paper, the authors conducted an international review of ten case studies from the United States, Canada, England, Belgium, New Zealand and Australia to explore several critical questions. Using qualitative data template, the research team reviewed plans, documents, web sites and published literature to address three questions. First, what are the governance arrangements for delivering regional planning? Second, what are the mechanisms linking regional plans with state plans (when relevant) and local plans? Third, what means and mechanisms do these regional plans use to evaluate and measure effectiveness? The case study analysis revealed several common themes. First, there is an increasing focus on goverance at the regional level, which is being driven by a range of trends, including regional spatial development initiatives in Europe, regional transportation issues in the US, and the growth of metropolitan regions generally. However, there is considerable variation in how regional governance arrangements are being played out. Similarly, there is a range of processes being used at the regional level to guide planning that range from broad ranging (thick) processes to narrow and limited (thin) approaches. Finally, evaluation and monitoring of regional planning efforts are compiling data on inputs, processes, outputs and outcomes. Although there is increased attention being paid to indicators and monitoring, most of it falls into outcome evaluations such as Agenda 21 or sustainability reporting. Based on our review we suggest there is a need for increased attention on input, process and output indicators and clearer linkages of these indicators in monitoring and evaluation frameworks. The focus on outcome indicators, such as sustainability indicators, creates feedback systems that are too long-term and remote for effective monitoring and feedback. Although we found some examples of where these kinds of monitoring frameworks are linked into a system of governance, there is a need for clearer conceptual development for both theory and practice.

Applying an equity lens to tobacco-control policies and their uptake in six western-european countries

We identified policies that may be effective in reducing smoking among socioeconomically disadvantaged groups, and examined trends in their level of application between 1985 and 2000 in six western-European countries (Sweden, Finland, the United Kingdom, the Netherlands, Germany, and Spain). We located studies from literature searches in major databases, and acquired policy data from international data banks and questionnaires distributed to tobacco policy organisations/researchers. Advertising bans, smoking bans in workplaces, removing barriers to smoking cessation therapies, and increasing the cost of cigarettes have the potential to reduce socioeconomic inequalities in smoking. Between 1985 and 2000, tobacco control policies in most countries have become more targeted to decrease the smoking behaviour of low-socioeconomic groups. Despite this, many national tobacco-control strategies in western-European countries still fall short of a comprehensive policy approach to addressing smoking inequalities.

What shapes attitudes toward paying taxes? Evidence from multicultural European countries

Objectives. Considerable evidence suggests that enforcement efforts cannot fully explain the high degree of tax compliance. To resolve this puzzle of tax compliance, several researchers have argued that citizens' attitudes toward paying taxes, defined as tax morale, helps to explain the high degree of tax compliance. However, most studies have treated tax morale as a black box, without discussing which factors shape it. Additionally, the tax compliance literature provides little empirical research that investigates attitudes toward paying taxes in Europe. Methods. Thus, this article is unique in its examination of citizen tax morale within three multicultural European countries, Switzerland, Belgium, and Spain, a choice that allows far more detailed examination of the impact of culture and institutions using data sets from the World Values Survey and the European Values Survey. Results. The results indicate the tendency that cultural and regional differences affect tax morale. Conclusion. The findings suggest that higher legitimacy for political institutions leads to higher tax morale.

Historical and Personal Perspectives on the Fall of the Berlin Wall, 1989: address to 20th anniversary forums.

The story of the fall of the Berlin Wall was an aspect of the “imagination gap” that we had to wrestle with as journalists covering the collapse of the Eastern Bloc in Europe. It was scarcely possible to believe what you found yourself reporting, and that work became a two-track process. On one hand a mass social movement was dictating the pace and direction of events; on the other, the institutional business of politics as usual, to provide a framework for all the change that was happening, had to be managed – and reported on. In later analyseds we could see, that crisis in the Soviet Union led to the crisis over the Berlin Wall; and from the fall of the Wall, came Germany’s reunification, and with that also, formation of the European Union as it is today. The government of the Federal Republic of Germany convinced its neighbours that a reunited Germany, within an expanded EU, would be a very acceptable “European Germany” -- not the leader of a “German Europe”. It committed itself financially, supporting the new Euro currency. The former communist states of Eastern Europe demanded to join and expand the EU; in order to remove themselves from the Soviet Union, enjoy human rights, and share in Western prosperity. So today, following on from the events of 1989, the European Union is an amalgam of 27 member countries, with close to 500 million citizens and accounting for 30 % of world Gross National Product.

Creative Economies, Creative Cities: Asian-European Perspectives

Thirteen papers examine Asian and European experiences with developing national and city policy agendas around cultural and creative industries. Papers discuss policy transfer and the field of the cultural and creative industries--what can be learned from Europe; creative industries across cultural borders--the case of video games in Asia; spaces of culture and economy--mapping the cultural-creative cluster landscape; beyond networks and relations--toward rethinking creative cluster theory; the capital complex--Beijing's new creative clusters; the European creative class and regional development--how relevant Richard Florida's theory is for Europe; getting out of place--the mobile creative class taking on the local--a U.K. perspective on the creative class; Asian cities and limits to creative capital theory; the creative industries, governance, and economic development--a U.K. perspective; Shanghai's emergence into the global creative economy; Shanghai moderne--creative economy in a creative city?; urbanity as a political project--toward post-national European cities; and alternative policies in urban innovation. Contributors include economists. Kong is with the Department of Geography at the National University of Singapore. O'Connor is at Queensland University of Technology. Index.