Towards a theory of the credit-risk balance sheet (II). The evolution of its structure

This article has an immediate predecessor, upon which it is based and with which readers must necessarily be familiar: Towards a Theory of the Credit-Risk Balance Sheet (Vallverdú, Somoza and Moya, 2006). The Balance Sheet is conceptualised on the basis of the duality of a credit-based transaction; it deals with its theoretical foundations, providing evidence of a causal credit-risk duality, that is, a true causal relationship; its characteristics, properties and its static and dynamic characteristics are analyzed. This article, which provides a logical continuation to the previous one, studies the evolution of the structure of the Credit-Risk Balance Sheet as a consequence of a business¿s dynamics in the credit area. Given the Credit-Risk Balance Sheet of a company at any given time, it attempts to estimate, by means of sequential analysis, its structural evolution, showing its usefulness in the management and control of credit and risk. To do this, it bases itself, with the necessary adaptations, on the by-now classic works of Palomba and Cutolo. The establishment of the corresponding transformation matrices allows one to move from an initial balance sheet structure to a final, future one, to understand its credit-risk situation trends, as well as to make possible its monitoring and control, basic elements in providing support for risk management.

Towards a theory of the credit-risk balance sheet

This article designs what it calls a Credit-Risk Balance Sheet (the risk being that of default by customers), a tool which, in principle, can contribute to revealing, controlling and managing the bad debt risk arising from a company¿s commercial credit, whose amount can represent a significant proportion of both its current and total assets.To construct it, we start from the duality observed in any credit transaction of this nature, whose basic identity can be summed up as Credit = Risk. ¿Credit¿ is granted by a company to its customer, and can be ranked by quality (we suggest the credit scoring system) and ¿risk¿ can either be assumed (interiorised) by the company itself or transferred to third parties (exteriorised).What provides the approach that leads to us being able to talk with confidence of a real Credit-Risk Balance Sheet with its methodological robustness is that the dual vision of the credit transaction is not, as we demonstrate, merely a classificatory duality (a double risk-credit classification of reality) but rather a true causal relationship, that is, a risk-credit causal duality.Once said Credit-Risk Balance Sheet (which bears a certain structural similarity with the classic net asset balance sheet) has been built, and its methodological coherence demonstrated, its properties ¿static and dynamic¿ are studied.Analysis of the temporal evolution of the Credit-Risk Balance Sheet and of its applications will be the object of subsequent works.

Towards a theory of the credit-risk balance sheet (II). The evolution of its structure

This article has an immediate predecessor, upon which it is based and with which readers must necessarily be familiar: Towards a Theory of the Credit-Risk Balance Sheet (Vallverdú, Somoza and Moya, 2006). The Balance Sheet is conceptualised on the basis of the duality of a credit-based transaction; it deals with its theoretical foundations, providing evidence of a causal credit-risk duality, that is, a true causal relationship; its characteristics, properties and its static and dynamic characteristics are analyzed. This article, which provides a logical continuation to the previous one, studies the evolution of the structure of the Credit-Risk Balance Sheet as a consequence of a business¿s dynamics in the credit area. Given the Credit-Risk Balance Sheet of a company at any given time, it attempts to estimate, by means of sequential analysis, its structural evolution, showing its usefulness in the management and control of credit and risk. To do this, it bases itself, with the necessary adaptations, on the by-now classic works of Palomba and Cutolo. The establishment of the corresponding transformation matrices allows one to move from an initial balance sheet structure to a final, future one, to understand its credit-risk situation trends, as well as to make possible its monitoring and control, basic elements in providing support for risk management.

Foliar photochemical processes and carbon metabolism under favourable and adverse winter conditions in a Mediterranean mixed forest, Catalonia (Spain)

Evergreen trees in the Mediterranean region must cope with a wide range of environmental stresses from summer drought to winter cold. The mildness of Mediterranean winters can periodically lead to favourable environmental conditions above the threshold for a positive carbon balance, benefitting evergreen woody species more than deciduous ones. The comparatively lower solar energy input in winter decreases the foliar light saturation point. This leads to a higher susceptibility to photoinhibitory stress especially when chilly (< 12 C) or freezing temperatures (< 0 C) coincide with clear skies and relatively high solar irradiances. Nonetheless, the advantage of evergreen species that are able to photosynthesize all year round where a significant fraction can be attributed to winter months, compensates for the lower carbon uptake during spring and summer in comparison to deciduous species. We investigated the ecophysiological behaviour of three co-occurring mature evergreen tree species (Quercus ilex L., Pinus halepensis Mill., and Arbutus unedo L.). Therefore, we collected twigs from the field during a period of mild winter conditions and after a sudden cold period. After both periods, the state of the photosynthetic machinery was tested in the laboratory by estimating the foliar photosynthetic potential with CO2 response curves in parallel with chlorophyll fluorescence measurements. The studied evergreen tree species benefited strongly from mild winter conditions by exhibiting extraordinarily high photosynthetic potentials. A sudden period of frost, however, negatively affected the photosynthetic apparatus, leading to significant decreases in key physiological parameters such as the maximum carboxylation velocity (Vc,max), the maximum photosynthetic electron transport rate (Jmax), and the optimal fluorometric quantum yield of photosystem II (Fv/Fm). The responses of Vc,max and Jmax were highly species specific, with Q. ilex exhibiting the highest and P. halepensis the lowest reductions. In contrast, the optimal fluorometric quantum yield of photosystem II (Fv/Fm) was significantly lower in A. unedo after the cold period. The leaf position played an important role in Q. ilex showing a stronger winter effect on sunlit leaves in comparison to shaded leaves. Our results generally agreed with the previous classifications of photoinhibition-tolerant (P. halepensis) and photoinhibitionavoiding (Q. ilex) species on the basis of their susceptibility to dynamic photoinhibition, whereas A. unedo was the least tolerant to photoinhibition, which was chronic in this species. Q. ilex and P. halepensis seem to follow contrasting photoprotective strategies. However, they seemed equally successful under the prevailing conditions exhibiting an adaptive advantage over A. unedo. These results show that our understanding of the dynamics of interspecific competition in Mediterranean ecosystems requires consideration of the physiological behaviour during winter which may have important implications for long-term carbon budgets and growth trends.