Much Ado About Nothing: The Limitation of Liability and the Market for 19th century Irish Bank Stock

Abstract Limited liability is widely believed to be a prerequisite for the emergence of an active and liquid securities market because the transactions costs associated with trading ownership of unlimited liability firms are viewed as prohibitive. In this article, we examine the trading of shares in an Irish bank, which limited its liability in 1883. Using this bank’s archives, we assemble a time series of trading data, which we test for structural breaks. Our results suggest that the move to limited liability had a negligible impact upon the trading of this bank’s shares.

Wider share ownership?: investors in English and Welsh Bank shares in the nineteenth century

The joint-stock banks that established after the liberalizing legislation of 1826 were periodically criticized during the nineteenth century for their low-quality and rapidly deteriorating shareholder constituencies. The quality of a bank's shareholding constituency was of paramount importance because of unlimited shareholder liability. Using archival records, this article examines the quality of bank shareholder constituencies over the nineteenth century. The main finding is that shareholder constituencies did not deteriorate in quality until the introduction of limited liability. The non-deterioration of constituencies is attributed to bank deeds which locked in the aggregate quality of shareholder constituencies by empowering directors to vet all share transfers.

Holding Shareholders to Account: British Banking Stability and Contingent Capital

This chapter seeks to explain the relative stability of the British banking system in terms of its capital structure. From 1826 joint-stock banking was allowed, but shareholder liability was jointly and severally unlimited. Limited liability banks were allowed from 1857–8, but these banks issued partly paid shares with an obligation on shareholders to subscribe for uncalled capital. Contingent capital meant that shareholders and managers would suffer losses in the event of failure and this discouraged risk shifting at the expense of note-holders and depositors. Although individual banks collapsed, the failure rate of banks (in terms of number or capital) did not reach a critical level—10 per cent—beyond which the payments system might have been threatened. This chapter argues that agency problems and systemic risk rose after the abolition of contingent share capital in 1958 and the deregulation of the banking sector in the 1970s.

The Diffusion of Risks in Public Private Partnership Contracts

Purpose The UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from: transferring risks to the private sector within a structure in which financiers put their own capital at risk; and, the performance based payment mechanism, reinforced by the due diligence requirements imposed by the lenders financing the projects (HM Treasury, 2010). Prior studies of risk in PPPs have investigated ‘what’ risks are allocated and to ‘whom’, that is to the public or the private sector. The purpose of this study is to examine ‘how’ and ‘why’ PPP risks are diffused by their financiers. Design/methodology/approach This study focuses on the financial structure of PPPs and on their financiers. Empirical evidence comes from interviews conducted with equity and debt financiers. Findings The findings show that the financial structure of the deals generates risk aversion in both debt and equity financiers and that the need to attract affordable finance leads to risk diffusion through a network of companies using various means that include contractual mitigation through insurance, performance support guarantees, interest rate swaps and inflation hedges. Because of the complexity this process generates, both procurers and suppliers need expensive expert advice. The risk aversion and diffusion and the consequent need for advice add cost to the projects impacting on the government’s economic argument for risk transfer. Limitations and implications The empirical work covers the private finance initiative (PFI) type of PPP arrangements and therefore the risk diffusion mechanisms may not be generalisable to other forms of PPP, especially those that do not involve the use of high leverage or private finance. Moreover, the scope of this research is limited to exploring the diffusion of risk in the private sector. Further research is needed on how risk is diffused in other settings and on the value for money implication of risk diffusion in PPP contracts. Originality/value The expectation inherent in PPP is that the private sector will better manage those risks allocated to it and because private capital is at risk, financiers will perform due diligence with the ultimate outcome that only viable projects will proceed. This paper presents empirical evidence that raises questions about these expectations. Key words: public private partnership, risk management, diffusion, private finance initiative, financiers

Successful but Unappealing: Fifteen Years of Workplace Partnership in Ireland:Special Issue: Partnership, Collaboration and Mutual Gains

This paper presents the first comprehensive review and assessment of Ireland's influential 15-year experiment with workplace partnership. The paper reviews the outcomes of workplace partnership and explains the limited adoption of partnership in the private and public sectors, drawing on the authors' experiences as participants in policy initiatives concerned with promoting partnership in the workplace. Although the promotion of partnership was to the fore in public policy between the late 1990s to the onset of the recession and successful outcomes were reported for the main stakeholders where partnerships were established, the paper explains why the concept nevertheless remained largely unappealing across the private and public sectors.

Evaluation of a partnership between primary and secondary care providing an accessible Level 1 sexual health service in the community

Comprehensive testing for asymptomatic sexually transmitted infections in Northern Ireland has traditionally been provided by genitourinary medicine clinics. As patient demand for services has increased while budgets have remained limited, there has been increasing difficulty in accommodating this demand. In May 2013, the newly commissioned specialist Sexual Health service in the South Eastern Trust sought to pilot a new model of care working alongside a GP partnership of 12 practices. A training programme to enable GPs and practice nurses to deliver Level 1 sexual health care to heterosexual patients aged >16 years, in accordance with the standards of BASHH, was developed. A comprehensive care pathway and dedicated community health advisor supported this new model with close liaison between primary and secondary care. Testing for Chlamydia, gonorrhoea, HIV and syphilis was offered. The aims of the pilot were achieved, namely to provide accessible, cost-effective sexual health care within a framework of robust clinical governance. Furthermore, it uncovered a high positivity rate for Chlamydia, especially in young men attending their general practice, and demonstrated a high level of patient satisfaction. Moreover the capacity of secondary care to deliver Levels 2 and 3 services was increased.

Education for global citizenship in Scotland: reciprocal partnership or politics of benevolence?

Links between schools in the United Kingdom and partner schools in developing countries are an increasingly popular approach to teaching global citizenship. This study addresses the limited empirical research to date on the influence of such links on pupils' learning and understanding. Following an overview of the curricular theme of global citizenship in the Scottish curriculum and in the context of a partnership between Scotland and Malawi, challenges and potential pitfalls of teaching global citizenship are illustrated by the voices of pupils at four schools. Data is analysed through the themes of knowledge and understanding, concerns about fairness, and giving and helping. We reflect on whether our study indicates the intended reciprocal partnership or a 'politics of benevolence'.