The diversification and financial performance of US credit unions

For US credit unions, revenue from non-interest sources has increased significantly in recent years. We investigate the impact of revenue diversification on financial performance for the period 1993–2004. The impact of a change in strategy that alters the share of non-interest income is decomposed into a direct exposure effect, reflecting the difference between interest and non-interest bearing activities, and an indirect exposure effect which reflects the effect of the institution’s own degree of diversification. On both risk-adjusted and unadjusted returns measures, a positive direct exposure effect is outweighed by a negative indirect exposure effect for all but the largest credit unions. This may imply that similar diversification strategies are not appropriate for large and small credit unions. Small credit unions should eschew diversification and continue to operate as simple savings and loan institutions, while large credit unions should be encouraged to exploit new product opportunities around their core expertise.

Maternal effects on offspring size and packaging constraints in the whelk

Life-history theory predicts an optimal offspring size, irrespective of reproductive effort; however, in some species offspring size correlates positively with maternal size. We examine hypotheses for why this latter situation should occur in the whelk Buccinum undatum. The trade-offs between aspects of reproduction in whelks are complicated due to the provision of protective egg capsules. Many eggs are placed within each capsule but c. 99% of these eggs are consumed by the remaining developing young. Large maternal size results in more eggs, larger eggs, more eggs consumed per hatchling, more capsules, larger capsules, more eggs per capsule, a larger number of hatchlings per capsule and larger hatchlings. Increased intra-capsule and post-hatch sibling competition may decrease the marginal value for additional young and select for larger young, however, our data do not support this explanation. Instead, packaging constraints within each capsule limit the size of hatchlings but this constraint is relaxed for medium to large females because they produce large capsules. Small females appear to produce young below optimum size because of the space constraint thus explaining the correlation between maternal size and offspring size.

Information Disclosure, Market Discipline and the Management of Bank Capital: Evidence from the Chinese Financial Sector

Is there evidence that market forces effectively discipline risk management behaviour within Chinese financial institutions? This study analyses information from a comprehensive sample of Chinese banks over the 1998-2008 period. Market discipline is captured through the impact of four sets of factors namely, market concentration, interbank deposits, information disclosure, and ownership structure. We find some evidence of a market disciplining effect in that: (i) higher (lower) levels of market concentration lead banks to operate with a lower (higher) capital buffer; (ii) joint-equity banks that disclose more information to the public maintain larger capital ratios; (iii) full state ownership reduces the sensitivity of changes in a bank's capital buffer to its level of risk;(iv) banks that release more transparent financial information hold more capital against their non-performing loans. © 2010 Springer Science+Business Media, LLC.

Tight constraints on the existence of additional planets around HD 189733†

We report a transit timing study of the transiting exoplanetary system HD 189733. In total, we observed 10 transits in 2006 and 2008 with the 2.6-m Nordic Optical Telescope, and two transits in 2007 with the 4.2-m William Herschel Telescope. We used Markov Chain Monte Carlo simulations to derive the system parameters and their uncertainties, and our results are in a good agreement with previously published values. We performed two independent analyses of transit timing residuals to place upper mass limits on putative perturbing planets. The results show no evidence for the presence of planets down to 1 Earth mass near the 1:2 and 2:1 resonance orbits, and planets down to 2.2 Earth masses near the 3:5 and 5:3 resonance orbits with HD 189733b. These are the strongest limits to date on the presence of other planets in this system. Based on observations made with the Nordic Optical Telescope, operated on the island of La Palma jointly by Denmark, Finland, Iceland, Norway and Sweden, in the Spanish Observatorio del Roque de los Muchachos of the Instituto de Astrofísica de Canarias. Based on observations made with the William Herschel Telescope operated on the island of La Palma by the Isaac Newton Group in the Spanish Observatorio del Roque de los Muchachos of the Instituto de Astrofísica de Canarias. ‡

Deliberative Equality and the Transgovernmental Politics of the Global Financial Architecture

Revisiting the concept of transgovernmentalism, originally developed by Robert Keohane and Joseph Nye, can shed considerable light on the nature of interstate cooperation in contemporary global financial governance. Transgovernmentalism highlights how certain technocratic policy communities, composed of finance ministries, central banks, and regulators, dominate the global financial architecture. It also provides insights into the political and social basis of these actors' interactions and deliberations. Most importantly, renovating the concept of transgovernmentalism brings the participatory deficits in the current global financial architecture into sharp focus and points us in the direction of a workable reform agenda that would expand inclusion and participation. This article advocates basing future reform on efforts to achieve a closer realization of the principle of “deliberative equality.” Unfortunately, “transgovernmentalism” is incompatible with deliberative equality, meaning that it is precisely the transgovernmental characteristics of the current global financial architecture that have to be challenged and overturned if we are to arrive at anything approximating deliberative equality.

Restraing Regulatory Capture? Anglo America, Crisis Politics and Trajectories of Change in Global Financial Governance

A growing number of respected commentators now argue that regulatory capture of public agencies and public policy by leading banks was one of the main causal factors behind the financial crisis of 2007–2009, resulting in a permissive regulatory environment. This regulatory environment placed a faith in banks own internal risk models, contributed to pro-cyclical behaviour and turned a blind eye to excessive risk taking. The article argues that a form of ‘multi-level regulatory capture’ characterized the global financial architecture prior to the crisis. Simultaneously, regulatory capture fed off, but also nourished the financial boom, in a fashion that mirrored the life cycle of the boom itself. Minimizing future financial booms and crises will require continuous, conscious and explicit efforts to restrain financial regulatory capture now and into the future. The article assesses the extent to which this has been achieved in current global financial governance reform efforts and highlights some of the persistent difficulties that will continue to hamper efforts to restrain regulatory capture. The evidence concerning the extent to which regulatory capture is being effectively restrained is somewhat mixed, and where it is happening it is largely unintentional and accidental. Recent reforms have overlooked the political causes of the crisis and have failed to focus explicitly or systematically on regulatory capture.