Price Discovery in the Dual-Platform US Treasury Market

Inter-dealer trading in US Treasury securities is almost equally divided between two electronic trading platforms that have only slight differences in terms of their relative liquidity and transparency. BrokerTec is more active in the trading of 2-, 5-, and 10-year T-notes while eSpeed has more active trading in the 30-year bond. Over the period studied, eSpeed provides a more pre-trade transparent platform than BrokerTec. We examine the contribution to ‘price discovery’ of activity in the two platforms using high frequency data. We find that price discovery does not derive equally from the two platforms and that the shares vary across term to maturity. This can be traced to differential trading activities and transparency of the two platforms.

'National Antiquities' and the Law

National museums, housing â??national antiquities', were a nineteenth-century cultural phenomenon throughout Europe. In the United Kingdom, they afforded the Treasury a means of preserving relics of antiquity claimed as treasure trove. While satisfying the desire of the scientific community for the preservation of archaeological finds, and national sentiment in Scotland and Ireland, Treasury practice undermined the British Museum's eponymous mission. This paper traces the development and legal consequences of the Treasury policy of national allocation of treasure trove, including the discussion in the Museums Committee of 1898â??99 of the â??nationality' of objects and artefacts, and considers the potential wider significance of â??national antiquity' in the context of changing constitutional arrangements in the United Kingdom in the 1920s, and in the future.

National and Provincial Influences on Public Sector Pay: Northern Ireland after 1945

This article examines the national and regional pressures in Northern Ireland in the post-war period for parity in public sector pay with the rest of the UK. Northern Ireland had a devolved legislature and government within the UK from 192 1 and was constitutionality in all essentially federal relationship with the rest of the UK. However, the Stormont Government chose to use legislative devolution to minimize policy differences with the rest of the UK. The article highlights the national industrial relations environment as the backdrop for provincial developments in pay setting. It establishes the important role Played by the Social Services Agreement negotiated with the Labour Government at Westminster in triggering the principle of parity in public sector pay in the early post-war years. The principle of pay parity subsequently became a benchmark for regional trade union coercive comparisons in collective bargaining across the devolved public sector. The article highlights the Policy relevance of these developments both to the UK Treasury and to devolved Governments in the UK, as they address the issue of regional public sector pay.

Child Welfare Interventions: Patterns of Social Work Practice

Some 10 years ago one of the authors embarked on a research study examining the potential for social workers to shift from a child protection to a child welfare practice orientation (Spratt, 2000; 2001; Spratt and Callan, 2004). The research reported here develops that work; examining how social workers respond to ‘child care problems’ (CCPs). The results indicate that Northern Irish Health and Social Services Trusts (equivalent to Local Authorities in England and Wales) have responded to social policy goals to balance the protection of a lesser number of children whilst meeting the welfare needs of the greater by reducing the number of referrals designated ‘child protection investigations’ (CPIs) and increasing the number of CCPs. Closer analysis reveals, however, that a filtering system has been developed by social workers to address perceived child protection risks within CCP cases. Paradoxically, this leads to early closure of the more concerning cases, with service provision largely confined to the least concerning. The authors argue that the ways in which social workers balance social policing and supportive functions in practice may indicate possible responses to an increase in referred families anticipated within Every Child Matters (Chief Secretary to the Treasury, 2003).

Accountability and Value for Money in Private Finance Initiative Contracts

Within the context of New Public Management (NPM), successive UK governments have claimed that PFI projects provide more accountability, and arguably, more value for money (VFM) than conventional procurement for the public (HM Treasury 1995, 2000, 2003a and 2003b). However, recent empirical research in the UK on PFI has indicated its potential limitations for accountability and VFM (Broadbent, Gill and Laughlin, 2004; Edwards, Shaoul, Stafford and Arblaster, 2004; Shaoul, 2005; and Ismail and Pendlebury, 2006) albeit these are based on either published accounts or a limited number of key stakeholders. This paper attempts to partially redress this gap in the literature by presenting an interesting case of the impact of PFI on accountability and VFM in Northern Ireland's education sector. The findings of this research, based on forty two interviews with a wide range of key stakeholders, suggest that stakeholders have different and often conflicting expectations and the actual PFI accountability and VFM benefits are much more obfuscated than those claimed in Government publications.

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

Irresponsible Lending?: A Case Study of a U.K. Credit Industry Reform Initiative

There are major concerns about the level of personal borrowing, particularly sourced from credit cards. This paper charts the progress of an initiative to create a Responsible Lending Index (RLI) for the credit industry. The RLI proposed to voluntarily benchmark lending standards and promote best practice within the credit industry by involving suppliers of credit, customer representatives and regulators. However, despite initial support from some banks, consumer bodies and the Chair of the Treasury Select Committee, it failed to gain sufficient support from financial institutions in its original format. The primary reasons for this were related to the complexity of building such a robust index and the banks trade body’s fear of exposing its members to public scrutiny. A revised alternative, the Responsible Lending Initiative, was proposed which took into account these concerns. However, the Association of Payment Clearing Service (APACS), the trade body of the credit industry, then effectively destroyed the proposal. This article describes an attempt to address the challenges in the credit card industry with the initiation of the RLI, reflected in stakeholder discourse and in the context of a wider concern expressed by the involved stakeholders in terms of the need for greater responsibility in the banking industry’s lending practices.

Energy: lessons from devolution

Geraint Ellis and Richard Cowell explain the findings of the ‘Delivering renewable energy under devolution’ project, including some reasons for Scotland’s lead.

The UK has seen massive increases in renewable energy since 1998, with installed capacity growing from 2,600 MW to 12,300 MW in 2011. This has coincided with devolution and it is within Northern Ireland, Scotland and Wales that the greatest increases have been seen.

As devolved administrations now host half of the UK’s renewable energy capacity, their policies are critical to achieving the broader UK targets. This also provides a fascinating insight into what sort of approach works best, and why. This has been the focus of a two-year study, funded by the Economic and Social Research Council, involving universities from across the UK, which indicates that Scotland is leading the way on renewable energy.

All devolved governments have offered significant support to renewable energy but have different degrees of powers in relation to energy. Scotland’s success seems to be based on the centrality of energy issues to current political aspirations, particularly the SNP, but also has cross-party support. The research suggests that the consensus on the importance of renewable energy amongst élite interests in Scotland helps to explain why Scottish governments have been empowered and enabled to make robust use of the powers available.

As it has achieved successful growth in the sector, this too helps cultivate credibility among key business interests and gives increased leverage to its position in policy discussions with the UK Government. Scotland has been more consistent over time in presenting the expansion of renewable energy as a national economic agenda, rather than just an environmental or rural development agenda. The availability of larger, windy, but relatively less contested sites for onshore wind in Scotland has meant that more projects went through central consenting procedures rather than local planning authorities. Its enhanced support for wave and tidal power technologies is also notable. These political conditions have been harder to find in the rest of the UK, making progress a little more uncertain.

Northern Ireland has used its powers (which are more extensive than Scotland’s) to facilitate small-scale renewables and bio-fuel processes, with its liberalised planning regime offering an initial boost to expanding capacity.

This has contrasted with the position in Wales, which has least control over energy but the Welsh Government has adopted a more innovative approach to strategic spatial zoning; this appears to have pulled in a larger volume of onshore wind development interest than could be expected in a comparable region of England. A downside of the Welsh approach appears to be the fact that the concentration of these wind projects in these zones has triggered public opposition and political conflict.

It therefore appears that the powers available to the devolved governments do not seem to determine which country has been able to make greatest headway, with broader political commitments being more significant. Despite this, the research does not conclude that the actions and activities undertaken by the devolved governments are necessarily the most important factors in shaping the development of renewable energy in the UK. This is because devolution is still a relatively new dimension of energy governance in the UK and decisions affecting key drivers for renewable energy investment are still made mainly in Westminster, with the Treasury exercising close budgetary control. In all areas of the UK, grid capacity expansion remains slow to achieve. The major growth in offshore wind to date has been driven mainly by Westminster and cross-UK bodies with the most significant capacity growth being in English territorial waters.

Soft Budget Constraints and Regional Industrial Policy: Reinterpreting the Rise and fall of De Lorean

The rise and fall of De Lorean Motor Cars Limited (DMCL) has been traditionally interpreted as either the result either of John De Lorean’s psychological flaws or as confirming the supposed limitations of activist industrial policy. However, when the episode is examined in greater historical detail, neither of these interpretations are compelling. The reinterpretation outlined here draws on institutional analysis as well as a range of archival sources, much of it previously unreleased. The inefficiencies within the original contractual agreement are highlighted. The lack of credibility associated with this agreement was in turn traceable to the institutional environment (with its associated risk-reward implications) under which industrial policy operated. This environment had a political element - it had been distorted by the Troubles and the resulting fears policymakers had of a cumulative causation relationship between violence and unemployment. Officials in Belfast, against Treasury opposition, advocated state-led entrepreneurship as a policy response.