Beyond Financialisation? Transformative Strategies for More Sustainable Financial Markets in the European Union

The global financial crisis has led many regulators and lawmakers to a rethinking about current versus optimum financial market structures and activities that include a variety and even radical ideas about delevaraging and downsizing finance. This paper focuses on the flaws and shortcomings of regulatory reforms of finance and on the necessity of and scope for more radical transformative strategies. With 'crisis economics' back, the most developed countries, including the EU member states, are still on the edge of disaster and confronted with systemic risk. Changes in financial regulation adopted in the aftermath of the financial meltdown have not been radical enough to transform the overall system of finance-driven capitalism towards a more sustainable system with a more embedded finance. The paper discusses financialisation in order to understand the development trends in finance over the past decades and examines various theories to describe the typical trends and patterns in financial regulation. By focusing on a limited number of regulatory reforms in the European Union, the limitations of current reforms and the need for additional transformative strategies necessary to overcome the finance-driven accumulation regime are explored. Finally, the regulatory space for such transformative strategies and for taming finance in times of crisis, austerity, and increased public protest potential is analysed.

Varieties of resource nationalism in sub-Saharan Africa’s energy and minerals markets

This article examines resource nationalism in sub-Saharan Africa's energy and minerals markets. It does so by exploring economic and political developments in three cases: Nigeria as an example of a petro-state established by means of expropriation in the wake of decolonisation; South Africa, a mature mining industry shaped by its settler colonial history; and Mozambique, a new and therefore highly-dependent entrant into the league of significant natural gas producers. Extractive industries have played a controversial role in sub-Saharan Africa due in particular to the prevalence of the resource curse. Nevertheless, energy exports will continue to play an important role in fuelling economic growth and, potentially, also development as new deposits of natural gas and oil are discovered across the region. Resource nationalism has, moreover, increasingly constrained operations of the traditionally dominant Western energy companies, in particular as competition from state-owned energy companies in sub-Saharan Africa and from emerging powers such as China is increasing.

Improving parameter learning of Bayesian nets from incomplete data

This paper addresses the estimation of parameters of a Bayesian network from incomplete data. The task is usually tackled by running the Expectation-Maximization (EM) algorithm several times in order to obtain a high log-likelihood estimate. We argue that choosing the maximum log-likelihood estimate (as well as the maximum penalized log-likelihood and the maximum a posteriori estimate) has severe drawbacks, being affected both by overfitting and model uncertainty. Two ideas are discussed to overcome these issues: a maximum entropy approach and a Bayesian model averaging approach. Both ideas can be easily applied on top of EM, while the entropy idea can be also implemented in a more sophisticated way, through a dedicated non-linear solver. A vast set of experiments shows that these ideas produce significantly better estimates and inferences than the traditional and widely used maximum (penalized) log-likelihood and maximum a posteriori estimates. In particular, if EM is adopted as optimization engine, the model averaging approach is the best performing one; its performance is matched by the entropy approach when implemented using the non-linear solver. The results suggest that the applicability of these ideas is immediate (they are easy to implement and to integrate in currently available inference engines) and that they constitute a better way to learn Bayesian network parameters.

An analysis of implied volatility jump dynamics: Novel functional data representation in crude oil markets

The predominant fear in capital markets is that of a price spike. Commodity markets differ in that there is a fear of both upward and down jumps, this results in implied volatility curves displaying distinct shapes when compared to equity markets. The use of a novel functional data analysis (FDA) approach, provides a framework to produce and interpret functional objects that characterise the underlying dynamics of oil future options. We use the FDA framework to examine implied volatility, jump risk, and pricing dynamics within crude oil markets. Examining a WTI crude oil sample for the 2007–2013 period, which includes the global financial crisis and the Arab Spring, strong evidence is found of converse jump dynamics during periods of demand and supply side weakness. This is used as a basis for an FDA-derived Merton (1976) jump diffusion optimised delta hedging strategy, which exhibits superior portfolio management results over traditional methods.

Molecular pedigree reconstruction and estimation of evolutionary parameters in a wild Atlantic salmon river system with incomplete sampling: a power analysis

Background: Pedigree reconstruction using genetic analysis provides a useful means to estimate fundamental population biology parameters relating to population demography, trait heritability and individual fitness when combined with other sources of data. However, there remain limitations to pedigree reconstruction in wild populations, particularly in systems where parent-offspring relationships cannot be directly observed, there is incomplete sampling of individuals, or molecular parentage inference relies on low quality DNA from archived material. While much can still be inferred from incomplete or sparse pedigrees, it is crucial to evaluate the quality and power of available genetic information a priori to testing specific biological hypotheses. Here, we used microsatellite markers to reconstruct a multi-generation pedigree of wild Atlantic salmon (Salmo salar L.) using archived scale samples collected with a total trapping system within a river over a 10 year period. Using a simulation-based approach, we determined the optimal microsatellite marker number for accurate parentage assignment, and evaluated the power of the resulting partial pedigree to investigate important evolutionary and quantitative genetic characteristics of salmon in the system.

Results: We show that at least 20 microsatellites (ave. 12 alleles/locus) are required to maximise parentage assignment and to improve the power to estimate reproductive success and heritability in this study system. We also show that 1.5 fold differences can be detected between groups simulated to have differing reproductive success, and that it is possible to detect moderate heritability values for continuous traits (h(2) similar to 0.40) with more than 80% power when using 28 moderately to highly polymorphic markers.

Conclusion: The methodologies and work flow described provide a robust approach for evaluating archived samples for pedigree-based research, even where only a proportion of the total population is sampled. The results demonstrate the feasibility of pedigree-based studies to address challenging ecological and evolutionary questions in free-living populations, where genealogies can be traced only using molecular tools, and that significant increases in pedigree assignment power can be achieved by using higher numbers of markers.

A methodology to analyse the impact of offshore wind forecasting error on electricity markets

Currently wind power is dominated by onshore wind farms in the British Isles, but both the United Kingdom and the Republic of Ireland have high renewable energy targets, expected to come mostly from wind power. However, as the demand for wind power grows to ensure security of energy supply, as a potentially cheaper alternative to fossil fuels and to meet greenhouse gas emissions reduction targets offshore wind power will grow rapidly as the availability of suitable onshore sites decrease. However, wind is variable and stochastic by nature and thus difficult to schedule. In order to plan for these uncertainties market operators use wind forecasting tools, reserve plant and ancillary service agreements. Onshore wind power forecasting techniques have improved dramatically and continue to advance, but offshore wind power forecasting is more difficult due to limited datasets and knowledge. So as the amount of offshore wind power increases in the British Isles robust forecasting and planning techniques are even more critical. This paper presents a methodology to investigate the impacts of better offshore wind forecasting on the operation and management of the single wholesale electricity market in the Republic of Ireland and Northern Ireland using PLEXOS for Power Systems. © 2013 IEEE.

Utopia Incomplete: British New Towns and Craigavon

The New towns initiative in the UK and Northern Ireland, enshrined in the Act of 1946, was derived out of a stream of philosophical thought that was a reaction to modernity, paritcularly Victorian industrialisation. This was developed through the writings of Ruskin and Morris and crystalised by Ebenezer Howard in his book Garden Cities of Tomorrow, which culminated with the design of Letchworth by Parker and Unwin (completed 1914). Letchworth however, was a more than just a physical and spatial entity: it was actually a policyscape, a novel economic and social policy landscape that regulated development in a modern and scientific way.

These themes of the scientification of urban design, and the regulation of urban development through policy, run through the whole New Town movement, right up to the development of the eco-towns of today. New Towns, in fact, can be seen as an embodiment of modernity, as well as a reaction to it .

Capital Markets Union and ending short-termism: lessons from the European Commission's public consultation

The European Commission’s initiative to establish a Capital Markets Union is in sharp conflict with the more radical goals of downsizing significantly certain financial activities and firms that have become too-big-to-fail and too-big-to-govern and of ending or at least drastically limiting extreme speculation and short-termism in finance and the real economy in order to increase financial stability. The recent public consultation on the Commission’s Green Paper Building a Capital Markets Union gives evidence of how weak such demands are compared to calls for deeper capital markets with more ‘shadow banking’ and rebuilding (sound) securitisation. The consultation is an example of how framing the problem and the refined better regulation agenda influence post-crisis financial reregulation and help to marginalize more radical ideas demanding a return to a more traditional banking model and transforming finance back to serving the real economy.