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.

‘Nudging’ energy users: regulatory measures to address the risk of aggregate peak demand in European electricity markets

For decades regulators in the energy sector have focused on facilitating the maximisation of energy supply in order to meet demand through liberalisation and removal of market barriers. The debate on climate change has emphasised a new type of risk in the balance between energy demand and supply: excessively high energy demand brings about significantly negative environmental and economic impacts. This is because if a vast number of users is consuming electricity at the same time, energy suppliers have to activate dirty old power plants with higher greenhouse gas emissions and higher system costs. The creation of a Europe-wide electricity market requires a systematic investigation into the risk of aggregate peak demand. This paper draws on the e-Living Time-Use Survey database to assess the risk of aggregate peak residential electricity demand for European energy markets. Findings highlight in which countries and for what activities the risk of aggregate peak demand is greater. The discussion highlights which approaches energy regulators have started considering to convince users about the risks of consuming too much energy during peak times. These include ‘nudging’ approaches such as the roll-out of smart meters, incentives for shifting the timing of energy consumption, differentiated time-of-use tariffs, regulatory financial incentives and consumption data sharing at the community level.

The integration of proteomics and systems approaches to map regulatory mechanisms underpinning platelet function.

Platelets in the circulation are triggered by vascular damage to activate, aggregate and form a thrombus that prevents excessive blood loss. Platelet activation is stringently regulated by intracellular signalling cascades, which when activated inappropriately lead to myocardial infarction and stroke. Strategies to address platelet dysfunction have included proteomics approaches which have lead to the discovery of a number of novel regulatory proteins of potential therapeutic value. Global analysis of platelet proteomes may enhance the outcome of these studies by arranging this information in a contextual manner that recapitulates established signalling complexes and predicts novel regulatory processes. Platelet signalling networks have already begun to be exploited with interrogation of protein datasets using in silico methodologies that locate functionally feasible protein clusters for subsequent biochemical validation. Characterization of these biological systems through analysis of spatial and temporal organization of component proteins is developing alongside advances in the proteomics field. This focused review highlights advances in platelet proteomics data mining approaches that complement the emerging systems biology field. We have also highlighted nucleated cell types as key examples that can inform platelet research. Therapeutic translation of these modern approaches to understanding platelet regulatory mechanisms will enable the development of novel anti-thrombotic strategies.

Cross-country effects of regulatory capital arbitrage

One reason for the recent asset price bubbles in many developed countries could be regulatory capital arbitrage. Regulatory and legal changes can help traditional banks to move their assets off their balance sheets into the lightly regulated shadows and thus enable regulatory arbitrage through the securitized sector. This paper adopts a global vector autoregression (GVAR) methodology to assess the effects of regulatory capital arbitrage on equity prices, house prices and economic activity across 11 OECD countries/ regions. A counterfactual experiment disentangles the effects of regulatory arbitrage following a change in the net capital rule for investment banks in April 2004 and the adoption of the Basel II Accord in June 2004. The results provide evidence for the existence of an international finance multiplier, with about half of the countries overshooting U.S. impulse responses. The counterfactual shows that regulatory arbitrage via the U.S. securitized sector may enhance the cross-country reallocation of capital from housing markets towards equity markets.

Do phytoplankton communities evolve through a self-regulatory abundance-diversity relationship?

A small group of phytoplankton species that produce toxic or allelopathic chemicals has a significant effect on plankton dynamics in marine ecosystems. The species of non-toxic phytoplankton, which are large in number, are affected by the toxin-allelopathy of those species. By analysis of the abundance data of marine phytoplankton collected from the North-West coast of the Bay of Bengal, an empirical relationship between the abundance of the potential toxin-producing species and the species diversity of the non-toxic phytoplankton is formulated. A change-point analysis demonstrates that the diversity of non-toxic phytoplankton increases with the increase of toxic species up to a certain level. However, for a massive increase of the toxin-producing species the diversity of phytoplankton at species level reduces gradually. Following the results, a deterministic relationship between the abundance of toxic phytoplankton and the diversity of non-toxic phytoplankton is developed. The abundance–diversity relationship develops a unimodal pathway through which the abundance of toxic species regulates the diversity of phytoplankton. These results contribute to the current understanding of the coexistence and biodiversity of phytoplankton, the top-down vs. bottom-up debate, and to that of abundance–diversity relationship in marine ecosystems.

Regulatory hotspots are associated with plant gene expression under varying soil phosphorus supply in Brassica rapa

Gene expression is a quantitative trait that can be mapped genetically in structured populations to identify expression quantitative trait loci (eQTL). Genes and regulatory networks underlying complex traits can subsequently be inferred. Using a recently released genome sequence, we have defined cis- and trans-eQTL and their environmental response to low phosphorus (P) availability within a complex plant genome and found hotspots of trans-eQTL within the genome. Interval mapping, using P supply as a covariate, revealed 18,876 eQTL. trans-eQTL hotspots occurred on chromosomes A06 and A01 within Brassica rapa; these were enriched with P metabolism-related Gene Ontology terms (A06) as well as chloroplast-and photosynthesis-related terms (A01). We have also attributed heritability components to measures of gene expression across environments, allowing the identification of novel gene expression markers and gene expression changes associated with low P availability. Informative gene expression markers were used to map eQTL and P use efficiency-related QTL. Genes responsive to P supply had large environmental and heritable variance components. Regulatory loci and genes associated with P use efficiency identified through eQTL analysis are potential targets for further characterization and may have potential for crop improvement.

The role of Investment Management Systems in regulatory compliance: a Post-Financial Crisis study of displacement mechanisms

The financial crisis of 2007–2009 and the resultant pressures exerted on policymakers to prevent future crises have precipitated coordinated regulatory responses globally. A key focus of the new wave of regulation is to ensure the removal of practices now deemed problematic with new controls for conducting transactions and maintaining holdings. There is increasing pressure on organizations to retire manual processes and adopt core systems, such as Investment Management Systems (IMS). These systems facilitate trading and ensure transactions are compliant by transcribing regulatory requirements into automated rules and applying them to trades. The motivation of this study is to explore the extent to which such systems may enable the alteration of previously embedded practices. We researched implementations of an IMS at eight global financial organizations and found that overall the IMS encourages responsible trading through surveillance, monitoring and the automation of regulatory rules and that such systems are likely to become further embedded within financial organizations. We found evidence that some older practices persisted. Our study suggests that the institutionalization of technology-induced compliant behaviour is still uncertain.

e-Government as a regulatory response to the financial crisis: the case of the UK

This paper seeks to discuss EU policies relating to securities markets, created in the wake of the financial crisis and how ICT and specifically e-Government can be utilised within this context. This study utilises the UK as a basis for our discussion. The recent financial crisis has caused a change of perspective in relation to government services and polices. The regulation of the financial sector has been heavily criticised and so is undergoing radical change in the UK and the rest of Europe. New regulatory bodies are being defined with more focus on taking a risk-based system-wide approach to regulating the financial sector. This approach aims to prevent financial institutions becoming too big to fail and thus require massive government bail outs. In addition, a new wave of EU regulation is in the wind to update risk management practices and to further protect investors. This paper discusses the reasons for the financial crisis and the UK’s past and future regulatory landscape. The current and future approach and strategies adopted by the UK’s financial regulators are reviewed as is the lifecycle of EU Directives. The regulatory responses to the crisis are discussed and upcoming regulatory hotspots identified. Discussion of these issues provides the context for our evaluation of the role e-Government and ICT in improving the regulatory system. We identify several processes, which are elementary for regulatory compliance and discuss how ICT is elementary in their implementation. The processes considered include those required for internal control and monitoring, risk management, record keeping and disclosure to regulatory bodies. We find these processes offer an excellent opportunity to adopt an e-Government approach to improve services to both regulated businesses and individual investors through the benefits derived from a more effective and efficient regulatory system.

IS capabilities for supporting post crisis regulatory compliance

The financial crisis of 2007-2009, has precipitated large scale regulatory change. Financial organizations are faced with implementing new regulations of considerable breadth and depth. Firms are faced with engaging in complex and costly change management programs at a time when profits are diminished. Furthermore, investors are becoming increasingly focused on compliance are seeking to ensure that organizations can demonstrate robust compliance practices as part of their due diligence process .The role of IS in underpinning stable, is paramount. IS allows the stable and consistent controls for meeting regulations in order to ensure long term effective compliance. Consequently, our study explores the IS capabilities which support the post crisis regulatory landscape. We identify eight key capabilities: Managing Internal Controls, Measuring Monitoring and Reporting Transactions, IS Development and Procurement, Managing Third Parties, Sharing and Selecting Best Practice, IS Leadership, Data Management and Enabling Cultural Change.

The role of rules-based compliance systems in the new EU regulatory landscape: perspectives of institutional change and agency

The financial crisis of 2007-2009 and the subsequent reaction of the G20 have created a new global regulatory landscape. Within the EU, change of regulatory institutions is ongoing. The research objective of this study is to understand how institutional changes to the EU regulatory landscape may affect corresponding institutionalized operational practices within financial organizations and to understand the role of agency within this process. Our motivation is to provide insight into these changes from an operational management perspective, as well as to test Thelen and Mahoney?s (2010) modes of institutional change. Consequently, the study researched implementations of an Investment Management System with a rules-based compliance module within financial organizations. The research consulted compliance and risk managers, as well as systems experts. The study suggests that prescriptive regulations are likely to create isomorphic configurations of rules-based compliance systems, which consequently will enable the institutionalization of associated compliance practices. The study reveals the ability of some agents within financial organizations to control the impact of regulatory institutions, not directly, but through the systems and processes they adopt to meet requirements. Furthermore, the research highlights the boundaries and relationships between each mode of change as future avenues of research.