Residential property loans and bank performance during property price booms: evidence from Europe

Understanding the performance of banks is of the utmost importance due to the impact the sector may have on economic growth and financial stability. Residential mortgage loans constitute a large proportion of the portfolio of many banks and are one of the key assets in the determination of their performance. Using a dynamic panel model, we analyse the impact of residential mortgage loans on bank profitability and risk, based on a sample of 555 banks in the European Union (EU-15), over the period from 1995 to 2008. We find that an increase in residential mortgage loans seems to improve bank’s performance in terms of both profitability and credit risk in good market, pre-financial crisis, conditions. These findings may aid in explaining why banks rush to lend to property during booms because of the positive effect it has on performance. The results also show that credit risk and profitability are lower during the upturn in the residential property cycle.

Thermodynamic analysis of snowball Earth hysteresis experiment: Efficiency, entropy production and irreversibility

We present an extensive thermodynamic analysis of a hysteresis experiment performed on a simplified yet Earth-like climate model. We slowly vary the solar constant by 20% around the present value and detect that for a large range of values of the solar constant the realization of snowball or of regular climate conditions depends on the history of the system. Using recent results on the global climate thermodynamics, we show that the two regimes feature radically different properties. The efficiency of the climate machine monotonically increases with decreasing solar constant in present climate conditions, whereas the opposite takes place in snowball conditions. Instead, entropy production is monotonically increasing with the solar constant in both branches of climate conditions, and its value is about four times larger in the warm branch than in the corresponding cold state. Finally, the degree of irreversibility of the system, measured as the fraction of excess entropy production due to irreversible heat transport processes, is much higher in the warm climate conditions, with an explosive growth in the upper range of the considered values of solar constants. Whereas in the cold climate regime a dominating role is played by changes in the meridional albedo contrast, in the warm climate regime changes in the intensity of latent heat fluxes are crucial for determining the observed properties. This substantiates the importance of addressing correctly the variations of the hydrological cycle in a changing climate. An interpretation of the climate transitions at the tipping points based upon macro-scale thermodynamic properties is also proposed. Our results support the adoption of a new generation of diagnostic tools based on the second law of thermodynamics for auditing climate models and outline a set of parametrizations to be used in conceptual and intermediate-complexity models or for the reconstruction of the past climate conditions. Copyright © 2010 Royal Meteorological Society

Lumbricus terrestris L. does not impact on the remediation efficiency of compost and biochar amendments

The aim of this study was to test the impact of compost and Biochar, with or without earthworms, on the mobility and availability of metals, and on the growth of grass to re-vegetate contaminated soil from the Parys Mountain mining site, Anglesey. We also determined if the addition of earthworms compromises remediation efforts. In a laboratory experiment, contaminated soil (1343 mg Cu kg−1, 2511 mg Pb kg−1 and 262 mg Zn kg−1) was remediated with compost and/or Biochar. After 77 days Lumbricus terrestris L. earthworms were added to the treatment remediated with both compost and Biochar, and left for 28 days. L. terrestris was not able to survive in the Biochar, compost or unamended treatments. A germination and growth bioassay, using Agrostis capillaris (Common Bent) was then run on all treatments for 28 days. The combination of Biochar and compost decreased water soluble Cu (from 5.6 to 0.2 mg kg−1), Pb (0.17 to less than 0.007 mg kg−1) and Zn (3.3 to 0.05 mg kg−1) in the contaminated soil and increased the pH from 2.7 to 6.6. The addition of L. terrestris to this treatment had no effect on the concentration of the water soluble metals in the remediated soil. The compost was the only treatment that resulted in germination and growth of A. capillaris suitable for re-vegetation purposes. However, the combination of compost, Biochar (with or without L. terrestris) produced the lowest concentrations of Cu (8 mg kg−1) and Zn (36 mg kg−1) in the aboveground biomass, lower than the compost treatment (15 mgCu kg−1 and 126 mgZn kg−1). The addition of Biochar and compost both separately and as co-amendments was effective in reducing the mobility and availability of metals. The addition of L. terrestris did not re-mobilise previously sequestered metals.

Varieties of capitalism and investments in human capital

This paper explores the relationship between national institutional archetypes and investments in training and development. A recent trend within the literature on comparative capitalism has been to explore the nature and extent of heterogeneity within the coordinated market economies (CMEs) of Europe. Based on a review of the existing comparative literature on training and development, and comparative firm-level survey evidence of differences in training and development practices, we both support and critique existing country clusters and argue for a more nuanced and flexible categorization.

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.

Influence of earthworm Eisenia fetida on removal efficiency of N and P in vertical flow constructed wetland.

This study investigates biomass, density, photosynthetic activity, and accumulation of nitrogen (N) and phosphorus (P) in three wetland plants (Canna indica, Typha augustifolia, and Phragmites austrail) in response to the introduction of the earthworm Eisenia fetida into a constructed wetland. The removal efficiency of N and P in constructed wetlands were also investigated. Results showed that the photosynthetic rate (P n), transpiration rate (T r), and stomatal conductance (S cond) of C. indica and P. austrail were (p < 0.05) significantly higher when earthworms were present. The addition of E. fetida increased the N uptake value by above-ground of C. indica, T. augustifolia, and P. australis by 185, 216, and 108 %, respectively; and its P uptake value increased by 300, 355, and 211 %, respectively. Earthworms could enhance photosynthetic activity, density, and biomass of wetland plants in constructed wetland, resulting in the higher N and P uptake. The addition of E. fetida into constructed wetland increased the removal efficiency of TN and TP by 10 and 7 %, respectively. The addition of earthworms into vertical flow constructed wetland increased the removal efficiency of TN and TP, which was related to higher photosynthetic activity and N and P uptake. The addition of earthworms into vertical flow constructed wetland and plant harvests could be the significantly sustainable N and P removal strategy

State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Price discovery of credit spreads in tranquil and crisis periods

In this paper we investigate the price discovery process in single-name credit spreads obtained from bond, credit default swap (CDS), equity and equity option prices. We analyse short term price discovery by modelling daily changes in credit spreads in the four markets with a vector autoregressive model (VAR). We also look at price discovery in the long run with a vector error correction model (VECM). We find that in the short term the option market clearly leads the other markets in the sub-prime crisis (2007-2009). During the less severe sovereign debt crisis (2009-2012) and the pre-crisis period, options are still important but CDSs become more prominent. In the long run, deviations from the equilibrium relationship with the option market still lead to adjustments in the credit spreads observed or implied from other markets. However, options no longer dominate price discovery in any of the periods considered. Our findings have implications for traders, credit risk managers and financial regulators.

Options for support to agriculture and food security under climate change

Agriculture and food security are key sectors for intervention under climate change. Agricultural production is highly vulnerable even to 2C (low-end) predictions for global mean temperatures in 2100, with major implications for rural poverty and for both rural and urban food security. Agriculture also presents untapped opportunities for mitigation, given the large land area under crops and rangeland, and the additional mitigation potential of aquaculture. This paper presents a summary of current knowledge on options to support farmers, particularly smallholder farmers, in achieving food security through agriculture under climate change. Actions towards adaptation fall into two broad overlapping areas: (1) accelerated adaptation to progressive climate change over decadal time scales, for example integrated packages of technology, agronomy and policy options for farmers and food systems, and (2) better management of agricultural risks associated with increasing climate variability and extreme events, for example improved climate information services and safety nets. Maximization of agriculture’s mitigation potential will require investments in technological innovation and agricultural intensification linked to increased efficiency of inputs, and creation of incentives and monitoring systems that are inclusive of smallholder farmers. Food systems faced with climate change need urgent, broad-based action in spite of uncertainties.

Estimating technical efficiency of Australian dairy farms using alternative frontier methodologies

Technical efficiency is estimated and examined for a cross-section of Australian dairy farms using various frontier methodologies; Bayesian and Classical stochastic frontiers, and Data Envelopment Analysis. The results indicate technical inefficiency is present in the sample data. Also identified are statistical differences between the point estimates of technical efficiency generated by the various methodologies. However, the rank of farm level technical efficiency is statistically invariant to the estimation technique employed. Finally, when confidence/credible intervals of technical efficiency are compared significant overlap is found for many of the farms' intervals for all frontier methods employed. The results indicate that the choice of estimation methodology may matter, but the explanatory power of all frontier methods is significantly weaker when interval estimate of technical efficiency is examined.

Heterotic and seed rate effects on nitrogen efficiencies in wheat

Four field experiments over 2 years investigated whether wheat hybrids had higher nitrogen-use efficiency (NUE) than their parents over a range of seed rates and different N regimes. There was little heterosis for total N in the above-ground biomass (NYt), but there was high-parent heterosis for grain N yields (NYg) in two of the hybrids, Hyno Esta and Hyno Rista, associated with greater nitrogen harvest index (NHI). Overall, the hybrids did not significantly increase the total dry matter produced per unit N in the above-ground crop (NUtE(t)), but did increase the grain dry matter per unit N in the above ground crop (NUtE(g)). The improvement in NUtE(g) was at the partial detriment of grain N concentration. Heterosis for grain NYg in Hyno Esta was lower at zero-N, suggesting that it did not achieve higher yields through more efficient capture or utilization of N. The greater NHI in Hyno Esta appeared to be facilitated by both greater N uptake, and remobilization of N from vegetative tissues, after anthesis. The response of N efficiency and uptake to seed rate was dependent on N supply and season. Where N fertilizer was applied, N uptake over time was slower at the lower seed rates, but where N was withheld N capture at the lowest seed rate soon approached the N capture of the higher seed rates. During grain filling, the rate of accumulation of N into the grain increased with seed rate and the duration of N accumulation decreased with seed rate. With N applied, N yields increased to all asymptote with seed rate, when N was withheld there was little response of N yields to seed rate. In 2002, N utilization efficiency (NUtE(t) and NUtE(g)) also increased asymptotically with seed rate, but in 2003 seed rate had little effect on N utilization efficiency. When nitrogen fertilizer had not been applied, NHI consistently decreased with increasing seed rate. The timing of N application made little difference to NUE, NY, or NUtE.

Water uptake and use by morphologically contrasting maize/pea cultivars in sole and intercrops in temperate conditions

Growth and water use of sole crops and intercrops of morphologically contrasting maize and pea cultivars were measured in two years. The maize cultivars were Nancis with erectophile and Sophy with planophile leaves and the pea cultivars Maro a leafy pea and Princess a semi-leafless pea. In the first part of the season water use was lower for sole maize but intercrops and sole pea used similar amounts of water. By 90 days after sowing, when peas had matured, all crops had used similar amounts of water. Maize had slightly greater water use efficiency than peas. Cultivars Nancis and Princess tended to have greater water use efficiency than Sophy and Maro respectively. Intercrops produced more dry matter than sole crops and therefore had consistently greater water use efficiencies.

Comparison of white metal and resin socket terminations for wire ropes

Previously the authors have presented both theoretical and experimental work discussing the operating mechanism of a wire rope held in a tapered socket by means of a cast resin cone. The work reported here extends the investigation to address the question of whether the same socket fabricated with white metal operates in the same manner. To date, previous investigations have compared the operational efficiency of resin and white metal in terms of both strength and/or fatigue endurance. Some other work has analysed the operation of resin sockets or specific cast metal terminations. This paper seeks to draw the results from this work together, and, in addition to a theoretical analysis, presents experimental data obtained from a direct comparison of the operation mechanism for the same sockets filled with resin or white metal. Results show that white metal terminations have a very different distribution of stresses along the length of the socket basket from resin terminations, and a smaller but still significant amount of socket draw. For both types of termination the socket draw develops high frictional gripping forces which can transfer the load from the rope to the socket. The different stress distributions mean that the consequences of termination fabrication defects may not be the same for resin and white metal terminations.