The Euro as an International Currency: explaining puzzling first evidence from the foreign exchange markets

This paper presents evidence that the bid-ask spreads in euro rates increased relative to the corresponding bid-ask spreads in the German mark (DM) prior to the creation of the currency union. This comes with a decrease in transaction volume in the euro rates relative to the previous DM rates. The starkest example is the DM(euro)/yen rate in which the spread has risen by almost two-thirds while the volume decreased by more than one third. This outcome is surprising because the common currency concentrated market liquidity in fewer external euro rates and higher volume tends to be associated with lower spreads. We propose a microstructure explanation based on a change in the information environment of the FX market. The elimination of many cross currency pairs increased the market transparency for order flow imbalances in the dealership market. It is argued that higher market transparency adversely affects the inventory risk sharing efficiency of the dealership market and induces the observed euro spread increase and transaction volume shortfall.

Cities Ready for Energy Crises - Building Urban energy Resilience

Various sources indicate that threats to modern cities lie in the availability of essential streams, among which energy. Most cities are strongly reliant on fossil fuels; not one case of a fully self-sufficient city is known. Engineering resilience is the rate at which a system returns to a single steady or cyclic state following a perturbation. Certain resilience, for the duration of a crisis, would improve the urban capability to survive such a period without drastic measures.
The capability of cities to prepare for and respond to energy crises in the near future is supported by greater or temporary self-sufficiency. The objective of the underlying research is a model for a city – including its surrounding rural area – that can sustain energy crises. Therefore, accurate monitoring of the current urban metabolism is needed for the use of energy. This can be used to pinpoint problem areas. Furthermore, a sustainable energy system is needed, in which the cycle is better closed. This will require a three-stepped approach of energy savings, energy exchange and sustainable energy generation. Essential is the capacity to store energy surpluses for periods of shortage (crises).
The paper discusses the need for resilient cities and the approach to make cities resilient to energy crises.

Legitimising Quality Principles through Critical Incidents in Organisational Development

Purpose – The aim of this paper is to analyse how critical incidents or organisational crises can be used to check and legitimise quality management change efforts in relation to the fundamental principles of quality. Design/methodology/approach – Multiple case studies analyse critical incidents that demonstrate the importance of legitimisation, normative evaluation and conflict constructs in this process. A theoretical framework composed of these constructs is used to guide the analysis. Findings – The cases show that the critical incidents leading to the legitimisation of continuous improvement (CI) were diverse. However all resulted in the need for significant ongoing cost reduction to achieve or retain competitiveness. In addition, attempts at legitimising CI were coupled with attempts at destabilising the existing normative practice. This destabilisation process, in some cases, advocated supplementing the existing approaches and in others replacing them. In all cases, significant conflict arose in these legitimising and normative evaluation processes. Research limitations/implications – It is suggested that further research could involve a critical analysis of existing quality models, tools and techniques in relation to how they incorporate, and are built upon, fundamental quality management principles. Furthermore, such studies could probe the dangers of quality curriculum becoming divorced from business and market reality and thus creating a parallel existence. Practical implications – As demonstrated by the case studies, models, tools and techniques are not valued for their intrinsic value but rather for what they will contribute to addressing the business needs. Thus, in addition to being an opportunity for quality management, critical incidents present a challenge to the field. Quality management must be shown to make a contribution in these circumstances. Originality/value – This paper is of value to both academics and practitioners.

Crisis Management in the Eastern Mediterranean (Implications for Policymakers)

This article examines Greek-Turkish crisis behaviour in the Eastern Mediterranean over the past two decades. Crises are first defined and classified, after which a number of common misperceptions are then addressed in light of recent experience. Three broad categories of foreign policy crises are analyzed: 1) those involving ethnically related minorities across the border; 2) those with 'alien' minorities within borders; and 3) those with third countries involving territories and resources. The article examines whether crises are simply elite-driven or partly endorsed and motivated by mass publics in both countries, and whether Greek-Turkish crisis behaviour reflects enduring ethnic rivalries, 'genuine' security interests, or domestic political needs and norms. The article draws upon the Greek-Turkish experience of the past two decades to illuminate contemporary dilemmas and issues which policymakers face in this region.

An information approach to international currencies

Models of currency competition focus on the 5% of trading attributable to balance-of-payments flows. We introduce an information approach that focuses on the other 95%. Important departures from traditional models arise when transactions convey information. First, prices reveal different information depending on whether trades are direct or though vehicle currencies. Second, missing markets arise due to insufficiently symmetric information, rather than insufficient transactions scale. Third, the indeterminacy of equilibrium that arises in traditional models is resolved: currency trade patterns no longer concentrate arbitrarily on market size. Empirically, we provide a first analysis of transactions across a full market triangle: the euro, yen and US dollar. The estimated transaction effects on prices support the information approach.

Recent policy initiatives in early childhood and the challenges for the social work profession

The Labour Government in the UK has announced, as part of its launch of The Children's Plan, that it 'wants to make this country the best place in the world for children and young people to grow up' in. This latest Plan is further evidence of the surge of interest that there has been in children (and, in particular, early childhood) over the last ten years in the UK and indeed elsewhere. Many of the recent policy and practice initiatives have implications for social workers working with young children. Yet, social work as a profession, in comparison with education, has remained relatively silent on these initiatives and it is hard to find any critical analysis of these developments in terms of either their underlying discourses or their implications for social workers. This article sets out to address these gaps by providing a critical analysis of: what types of knowledge regarding the early years have gained political currency; why and how this is the case; and what the implications are for the role and practices of social workers. The article proposes that discourses of 'need' and 'provision' mask more powerful discourses of economics, social control and risk avoidance, and it concludes by advocating more critically reflexive social work practice with young children and their families.

From stress to distress: Conceptualizing the British family farming patriarchal way of life

‘Rural stress’ and ‘farming stress’ are terms that have become commonly appropriated by British health-based academic disciplines, the medical profession and social support networks, especially since the agricultural ‘crises’ of B.S.E. and Foot and Mouth Disease. Looking beyond the media headlines, it is apparent that the terms in fact are colloquial catch-alls for visible psychological and physiological outcomes shown by individuals. Seldom have the underlying causes and origins of presentable medical outcomes been probed, particularly within the context of the patriarchal and traditionally patrilineal way of life which family forms of farming business activity in Britain encapsulate. Thus, this paper argues that insufficient attention has been paid to the conceptualization of the terms. They have become both over-used and ill-defined in their application to British family farm individuals and their life situations. A conceptual framework is outlined that attempts to shift the stress research agenda into the unilluminated spaces of the family farming ‘way of life’ and focus instead on ‘distress’. Drawing upon theorization from agricultural and feminist geography together with cultural approaches from rural geography, four distinct clusters of distress originate from the thoughts of individuals and the social practices now required to enact patriarchal family farming gender identities. These are explored using case study evidence from ethnographic repeated life history interviews with members of seven farming families in Powys, Mid Wales, an area dominated by family forms of farming business. Future research agendas need to be based firmly on the distressing reality of patriarchal family farming and also be inclusive of those who, having rejected the associated way of life, now lie beyond the farm gate.

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.

Public Administration, Science and Risk Assessment: A Case Study of the U.K. Bovine Spongiform Encephalopathy Crisis

The bovine spongiform encephalopathy (BSE) outbreak in the United Kingdom is regarded as one of the worst public policy crises the British government has experienced during the postwar era. In material terms, it has led to the slaughter of 3.3 million cattle and estimated economic losses of £3.7 billion. In administrative terms, the crisis brought about the dissolution of the Ministry of Agriculture, Fisheries and Food. This article examines the istitutional context in which decisions about the scientific evidence on BSE were made. The authors argue that a centralized system in which government agencies control science for government is inherently vulnerable to alliances of experts and interest groups that undermine the credible assessment of public health and safety risks. Specific societal conditions may encourage risk-opportunistic behavior among policy makers that is conducive to delays and inaction until such time as the evidence of a health risk becomes overwhelming.