Regulatory reform and productivity change in Indian banking

This paper examines the impact of regulatory reform on productivity growth and its components for Indian banks in 1992-2009. We estimate parametric and non-parametric efficiency frontiers, followed by Divisia and Malmquist indexes of Total Factor Productivity respectively. To account for technology heterogeneity among ownership types we utilise a metafrontier approach. Results are consistent across methodologies and show sustained productivity growth, driven mainly by technological progress. Furthermore, results indicate that different ownership types react differently to changes in the operating environment. The position of foreign banks becomes increasingly dominant and their production technology becomes the best practice in the industry.

What processes drive the ocean heat transport?

The ocean contributes to regulating the Earth’s climate through its ability to transport heat from the equator to the poles. In this study we use long simulations of an ocean model to investigate whether the heat transport is carried primarily by wind-driven gyres or whether it is dominated by deep circulations associated with abyssal mixing and high latitude convection. The heat transport is computed as a function of temperature classes. In the Pacific and Indian ocean, the bulk of the heat transport is associated with wind-driven gyres confined to the thermocline. In the Atlantic, the thermocline gyres account for only 40% of the total heat transport. The remaining 60% is associated with a circulation reaching down to cold waters below the thermocline. Using a series of sensitivity experiments, we show that this deep heat transport is primarily set by the strength and patterns of surface winds and only secondarily by diabatic processes at high latitudes in the North Atlantic. Abyssal mixing below 2000 m has hardly any impact on ocean heat transport. A major implication is that the role of the ocean in regulating Earth’s climate strongly depends on how surface winds change across different climates in both hemispheres at low and high latitudes.

The vertical structure of ocean heat transport

One of the most important contributions the ocean makes to Earth's climate is through its poleward heat transport: about 1.5 PW or more than 30% of that accomplished by the ocean-atmosphere system (Trenberth and Caron, 2001). Recently, concern has arisen over whether global warming could affect this heat transport (Watson et al., 2001), for example, reducing high latitude convection and triggering a collapse of the deep overturning circulation (Rahmstorf, 1995). While the consequences of abrupt changes in oceanic circulation should be of concern, we argue that the attention devoted to deep circulations is disproportionate to their role in heat transport. For this purpose, we introduce a heat function which identifies the contribution to the heat transport by different components of the oceanic circulation. A new view of the ocean emerges in which a shallow surface intensified circulation dominates the poleward heat transport.

The mirror neuron system as revealed through neonatal imitation: presence from birth, predictive power, and evidence of plasticity

There is strong evidence that neonates imitate previously unseen behaviors. These behaviors are predominantly used in social interactions, demonstrating neonates’ ability and motivation to engage with others. Research on neonatal imitation can provide a wealth of information about the early mirror neuron system (MNS): namely, its functional characteristics, its plasticity from birth, and its relation to skills later in development. Though numerous studies document the existence of neonatal imitation in the laboratory, little is known about its natural occurrence during parent-infant interactions and its plasticity as a consequence of experience. We review these critical aspects of imitation, which we argue are necessary for understanding the early action-perception system. We address common criticisms and misunderstandings about neonatal imitation and discuss methodological differences among studies. Recent work reveals that individual differences in neonatal imitation positively correlate with later social, cognitive, and motor development. We propose that such variation in neonatal imitation could reflect important individual differences of the MNS. Although postnatal experience is not necessary for imitation, we present evidence that neonatal imitation is influenced by experience in the first week of life.

Does milk consumption contribute to cardiometabolic health and overall diet quality?

Although milk consumption is recommended in most dietary guidelines around the world, its contribution to overall diet quality remains a matter of debate in the scientific community as well as in the public. This paper summarizes the discussion among experts in the field on the place of milk in a balanced, healthy diet. The evidence to date suggests at least a neutral effect of milk intake on health outcomes. The possibility that milk intake is simply a marker of higher nutritional quality diets cannot be ruled out. This review also identifies a number of key research gaps pertaining to the impact of milk consumption on health. These need to be addressed to better inform future dietary guidelines.

Post-crisis regulatory reforms and bank performance: lessons from Asia

Based on a large dataset from eight Asian economies, we test the impact of post-crisis regulatory reforms on the performance of depository institutions in countries at different levels of financial development. We allow for technological heterogeneity and estimate a set of country-level stochastic cost frontiers followed by a deterministic bootstrapped meta-frontier to evaluate cost efficiency and cost technology. Our results support the view that liberalization policies have a positive impact on bank performance, while the reverse is true for prudential regulation policies. The removal of activities restrictions, bank privatization and foreign bank entry have a positive and significant impact on technological progress and cost efficiency. In contrast, prudential policies, which aim to protect the banking sector from excessive risk-taking, tend to adversely affect banks cost efficiency but not cost technology.

The impact of deregulation and re-regulation on bank efficiency: evidence from Asia

Following the 1997 crisis, banking sector reforms in Asia have been characterised by the emphasis on prudential regulation, associated with increased financial liberalisation. Using a panel data set of commercial banks from eight major Asian economies over the period 2001-2010, this study explores how the coexistence of liberalisation and prudential regulation affects banks’ cost characteristics. Given the presence of heterogeneity of technologies across countries, we use a stochastic frontier approach followed by the estimation of a deterministic meta-frontier to provide ‘true’ estimates of bank cost efficiency measures. Our results show that the liberalization of bank interest rates and the increase in foreign banks' presence have had a positive and significant impact on technological progress and cost efficiency. On the other hand, we find that prudential regulation might adversely affect bank cost performance. When designing an optimal regulatory framework, policy makers should combine policies which aim to foster financial stability without hindering financial intermediation.