The information content of REIT credit rating actions and transparency

We examine the short-run and long-run price reaction of equity REIT shares following credit rating actions, testing the transparency of the REIT structure. Generally, the economic effect on the stock price is subdued for both upgrades and downgrades compared to prior literature examining the broader U.S. equity market. An examination of trading volume revealed a significant increase in trading in reaction to downgrade credit rating changes, with a more subdued response to upgrades. The findings support the notion that REITs are more publicly forthcoming about the expectation of positive news in comparison to negative news.

The credit relationship between Henry III and merchants of Douai and Ypres, 1247-70

This article looks at an important but neglected aspect of medieval sovereign debt, namely ‘accounts payable’ owed by the Crown to merchants and employees. It focuses on the unusually well-documented relationship between Henry III, King of England between 1216 and 1272, and Flemish merchants from the towns of Douai and Ypres, who provided cloth on credit to the royal wardrobe. From the surviving royal documents, we reconstruct the credit advanced to the royal wardrobe by the merchants of Ypres and Douai for each year between 1247 and 1270, together with the king's repayment history. The interactions between the king and the merchants are then analysed. The insights from this analysis are applied to the historical data to explain the trading decisions made by the merchants during this period, as well as why the strategies of the Yprois sometimes differed from those of the Douaissiens.

Credit risk in covered bonds

Covered bonds are a promising alternative for prime mortgage securitization. In this paper, we explore risk premia in the covered bond market and particularly investigate whether and how credit risk is priced. In extant literature, yield spreads between high-quality covered bonds and government bonds are often interpreted as pure liquidity premia. In contrast, we show that although liquidity is important, it is not the exclusive risk factor. Using a hand-collected data set of cover pool information, we find that the credit quality of the cover assets is an important determinant of covered bond yield spreads. This effect is particularly strong in times of financial turmoil and has a significant influence on the issuer's refinancing cost.

A bank lending channel or a credit supply shock?

Shifts in credit supply could have a bearing on house prices e.g. through financial innovations and changes in regulation independently of the existence of a bank lending channel of monetary policy. This paper assesses the responses of US house prices to an exogenous credit supply shock and compares them with the effects from variations in credit supply associated with a bank lending channel. The contribution of the study is twofold. First, innovations in credit supply are identified using a mortgage mix variable, thereby accounting for the market-based financial intermediaries. As a robustness check a survey variable of bank lending standards for mortgage loans is also used. Second, the policy-induced credit supply effect on house prices is disentangled and compared with the effect from an exogenous credit supply shock. It is shown that in the first 3 years credit supply shocks affect house prices exogenously rather than through the bank lending channel. Monetary policy has still a large impact on house prices, even when the bank lending channel is ‘turned off’.

Default perception of high-speed motion

When human observers are exposed to even slight motion signals followed by brief visual transients—stimuli containing no detectable coherent motion signals—they perceive large and salient illusory jumps. This novel effect, which we call “high phi”, challenges well-entrenched assumptions about the perception of motion, namely the minimal-motion principle and the breakdown of coherent motion perception with steps above an upper limit. Our experiments with transients such as texture randomization or contrast reversal show that the magnitude of the jump depends on spatial frequency and transient duration, but not on the speed of the inducing motion signals, and the direction of the jump depends on the duration of the inducer. Jump magnitude is robust across jump directions and different types of transient. In addition, when a texture is actually displaced by a large step beyond dmax, a breakdown of coherent motion perception is expected, but in the presence of an inducer observers again perceive coherent displacements at or just above dmax. In sum, across a large variety of stimuli, we find that when incoherent motion noise is preceded by a small bias, instead of perceiving little or no motion, as suggested by the minimal-motion principle, observers perceive jumps whose amplitude closely follows their own dmax limits.

Mind wandering away from pain dynamically engages antinociceptive and default mode brain networks

Human minds often wander away from their immediate sensory environment. It remains unknown whether such mind wandering is unsystematic or whether it lawfully relates to an individual’s tendency to attend to salient stimuli such as pain and their associated brain structure/function. Studies of pain–cognition interactions typically examine explicit manipulation of attention rather than spontaneous mind wandering. Here we sought to better represent natural fluctuations in pain in daily life, so we assessed behavioral and neural aspects of spontaneous disengagement of attention from pain. We found that an individual’s tendency to attend to pain related to the disruptive effect of pain on his or her cognitive task performance. Next, we linked behavioral findings to neural networks with strikingly convergent evidence from functional magnetic resonance imaging during pain coupled with thought probes of mind wandering, dynamic resting state activity fluctuations, and diffusion MRI. We found that (i) pain-induced default mode network (DMN) deactivations were attenuated during mind wandering away from pain; (ii) functional connectivity fluctuations between the DMN and periaqueductal gray (PAG) dynamically tracked spontaneous attention away from pain; and (iii) across individuals, stronger PAG–DMN structural connectivity and more dynamic resting state PAG–DMN functional connectivity were associated with the tendency to mind wander away from pain. These data demonstrate that individual tendencies to mind wander away from pain, in the absence of explicit manipulation, are subserved by functional and structural connectivity within and between default mode and antinociceptive descending modulation networks.

The effects of corporate social performance on the cost of corporate debt and credit ratings

This study investigates the differential impact that various dimensions of corporate social performance have on the pricing of corporate debt as well as the assessment of the credit quality of specific bond issues. The empirical analysis, based on an extensive longitudinal data set, suggests that overall, good performance is rewarded and corporate social transgressions are penalized through lower and higher corporate bond yield spreads, respectively. Similar conclusions can be drawn when focusing on either the bond rating assigned to a specific debt issue or the probability of it being considered to be an asset of speculative grade.

Foreign credit: travel writing and authenticity in the dutch translation of The memoirs and travels of Mauritius Augustus, Count de Benyowsky (1790)

This article explores the translation and reception of the Memoirs and Travels (1790) of Count Mauritius Augustus Benyowsky (1746-86) in the Netherlands, and examines the complications, tensions and problems that transfer between a major and a more minor European language involves. I analyse how the Dutch translator Petrus Loosjes Adriaanszoon positioned himself as a mediator between these very different source and target cultures and ask how he dealt with the problems of plausibility and ‘credit’ which had beleaguered the reception of the Memoirs and Travels from the outset. In this article I am concerned to restore minority languages to the discussion of how travel literature circulated in Western Europe at the close of the eighteenth century and to demonstrate how major/minor language translation was central to the construction of Dutch-language culture in the Low Countries in this period.