Banks and sovereigns: An econometric analysis of an entangled relationship

In this discussion OLS regressions are used to study the factors that influence sovereign yield spreads and domestic bank indeces for a set of euro area countries. The results show that common factors explain changes in bank indeces better than in the yields. Moreover, although there is some country differentiation, a common pattern among all is visible. A contemporary spillover effect between banks and sovereigns emerged after bank bailouts and became stronger with the burst of the sovereign debt crisis. The vicious cycle between the two has contributed to the escalation of spreads and to painful austerity measures.

Is the Basel III Leverage Ratio countercyclical? A study for Portuguese banks

This work analyses how the leverage ratio behaves through the cycle, vis-à-vis other capital ratios. For a sample of the largest Portuguese banks, the Basel III leverage ratio is indeed countercyclical. This result is relevant from a regulatory perspective, since the introduction of a limit on the leverage ratio will function as a restriction in the banks’ balance sheet size, reducing the economic costs associated with the excessive growth of leverage in periods of economic expansion followed by aggressive deleveraging in the downturn. However, one cannot exclude that restrictions on banks’ leverage incentivize its transference to less regulated intermediaries.

Universal banks and corporate control: Evidence from the global syndicated loan market

We investigate the effects of bank control over borrower firms whether by representation on boards of directors or by the holding of shares through bank asset management divisions. Using a large sample of syndicated loans, we find that banks are more likely to act as lead arrangers in loans when they exert some control over the borrower firm. Bank-firm governance links are associated with higher loan spreads during the 2003-2006 credit boom, but lower spreads during the 2007-2008 financial crisis. Additionally, these links mitigate credit rationing effects during the crisis. The results are robust to several methods to correct for the endogeneity of the bank- firm governance link. Our evidence, consistent with intertemporal smoothing of loan rates, suggests there are costs and benefits from banks’ involvement in firm governance.

Geopolymers as infill material for conservation of azulejos

The restoration materials currently used to fill gaps in architectural historical azulejos (e.g. lime or organic resin pastes) usually show serious drawbacks in terms of compatibility, effectiveness and durability. The existing solutions do not fully protect azulejos in outdoor conditions and frequently result in further deterioration. Geopolymers can be a potential solution for azulejo lacunae infill given the chemical-mineralogical similitude to the ceramic body, and also the durability and versatile range of physical properties that can be obtained through the manipulation of their formulation and curing conditions. This work presents and discusses the viability of the use of geopolymeric pastes to fill lacunae in azulejos or to act as “cold” cast ceramic tile surrogates reproducing missing azulejo fragments. The formulation of geopolymers, namely the type of activators, the aluminosilicate source, the amount of water (to meet adequate workability requirements) and curing conditions were studied. The need for post-curing desalination was also considered envisaging their application in the restoration of outdoor architectural historical azulejos frequently exposed to adverse environmental conditions. The possible advantages and disadvantages of the use of geopolymers in the conservation of azulejos are also discussed. Several techniques were used to study the chemical and physical behavior of geopolymers, namely FT-IR, XRD, MIP, SEM-EDS, WDXRF, electrical conductivity, open porosity, bending strength, adhesion strength, water vapour permeability, thermal expansion and hydric expansion. The results indicate that geopolymers are a promising material for restoration of azulejos, exhibiting some properties, such as adhesion to the ceramic substrate, higher than inorganic materials used nowadays, such as aerial lime based pastes.

Going Public: Conservation of Contemporary Artworks. Between Backstage and Frontstage in Contemporary Art Museums

In museum studies and history of art, what happens behind the scenes of museums stays relatively unseen and unspoken about. In the arts, generally speaking, what is dismissed as irrelevant (e.g. the realm of practices) is deliberately detached from what is thought to really matter; theory, discourse, content and meaning. Up till recently, backstage activities such as conservation practices are merely discussed among specialists and museum professionals. Only the outcomes of these discussions are sometimes – if at all – explicitly communicated to a larger public. Studies into the practices of contemporary art conservation however show that practices behind the scenes play an important role in the perpetuation of these artworks. What happens behind the scenes in terms of conservation has, in several ways, important effects on the ongoing life of these artworks in a museum context. Conservation practices, I argue, should therefore become a necessary part of museum studies and history of art. How can the working practices of conservators become more visible and transparent to a diversity of audiences, including researchers? And what does this mean in terms of research methodology?

Comparative analysis of Spanish Banks’ Standalone credit profile

The paper studies the relationship between four differently rated bank’s financial profile and their standalone credit rating issued by Moody’s. The comparative analysis shows an example that despite their pricing power and geographical coverage, larger banks do not necessarily have better credit ratings. Instead, business model and risk appetite seem to be the defining factors of banks’ vulnerability to shocks, such as the Spanish real estate crisis. The risk-return relationship is also identified in the banks’ fundamentals meaning that while expansionary strategy in riskier asset classes enhances margins, it also potentially distorts the credit risk profile.

Basel III: The impact of new capital requirements on profitability of Portuguese Banks

This empirical study aims to explore the impact of increased capital ratio requirements, on the ROE of the Portuguese banking sector. The paper employs both a quantitative- and qualitative approach, with the qualitative approach as the main method of research. The method adopted to conduct the qualitative research was semi structured elite interviews with banking executives. Higher capital requirements decrease the ROE of banks in Portugal, but huge impairments charges, macroeconomic factors and increased costs of deposits are clearly the dominant reasons for the reduced levels of ROE the past years. Among the measures taken to increase capital ratios, reduction of RWAs and non-core assets have been the main focus, but the issuance of CoCos is regarded as the most expensive measure due to high interest payments. However, the CoCos will not have any effect on the ROE in the long term. It is difficult to draw any conclusions on the impact of more equity in the balance sheet on the ROE of Portuguese banks, as many banks currently don’t generate enough money to pay back on shareholders´ investments.

The perfect paint in modern art conservation: a comparative study of 21st century vinyl emulsions

Contemporary painting places, and will continue to place, several questions about its meaning, its chemical nature, its durability and the best way to preserve it. This research aims at putting together comprehensive data on vinyl based paints, including their components, their properties, their aging behavior and their response to selected cleaning products. In this project degradation mechanisms of vinyl binders and formulations used in the 20th and 21st century were studied. Stability over time of selected vinyl polymers was assessed through natural indoor and artificially aging. The objective was to enhance knowledge and understanding of vinyl emulsion formulations and their performance over time. Overall conservation state of pictorial layers namely, adhesion, cohesion and discoloration of selected case studies from the Portuguese artist Julião Sarmento (b.1948) was correlated with the observed molecular level changes studied in laboratory experiments. Sarmento’s paintings were chosen due to conservation concerns (discoloration) on some of his works from the 90’s. Besides, research was carried out to start increasing the knowledge of what can be expected of PVAc based paints in terms of response to conservation treatments namely, surface cleaning. Artificial aging showed that the most recent formulations which are based on a poly(vinyl acetate), poly(vinyl chloride) and polyethylene terpolymer are less stable when compared to some homopolymer formulations. From the four pigments studied, titanium dioxide rutile and a carbon based black proved to be stabilizers for both types of polymer. The mixture lithopone plus calcium carbonate has showed to have a photocatalytic effect on the binders. The studied paintings showed to be in an overall good state of conservation except for the paintings created in the 90’s with white glue and a mixture of white lithoponeand calcium carbonate. Discoloration of this white paint seems to be irreversible and ongoing and is still a major concern. The disapearance of the plasticizer was the only change detected. The current works created by Sarmento are expected to be more stable as they were painted using the rutile titanium dioxide. Immersion/cleaning tests showed that vinyl based paints can be susceptible to water and organic solvents like ethanol as some evidences point to the removal/diffusion of additives from the paint. The observations made point to the need to further proceed in this research field.