Insuring for a crisis: deposit insurance and the GFC, the Australian and New Zealand experience

Deposit insurance schemes were an important element in policy responses to the global financial crisis (GFC). There has been considerable debate about the nature and efficacy of such policy measures in alleviating the fallout from financial crises. The GFC highlighted problems associated with deposit insurance schemes including moral hazard, coverage limits, co-insurance, cross border issues and market distortions. Despite these shortcomings, deposit insurance schemes were able to ameliorate the financial panic experienced and reduce contagion. This paper evaluates the Australian and New Zealand experience with deposit insurance introduced in response to the GFC, and compares this to the OECD experience. It reflects on the performance of deposit insurance schemes considered against the attributes of good policy design, and evaluates the specific problems and strengths encountered during the GFC.

Thai hedging practices post-Asian financial crisis

This paper provides survey evidence captured from a sample of 113 respondents to a 2008 questionnaire sent to 344 companies in Thailand. The study examines Thai hedging practices following the Asian Financial Crisis of 1997. Thai companies, like their international counterparts, rely predominantly on matching and forward contracts to hedge transaction exposure. Thai companies, however, appear to be less rigorous when it comes to internal control and supervision of derivative activity. It is recommended that Thai companies improve their risk management practices by putting into place a documented hedging policy, which includes a requirement that senior staff be actively engaged in the risk management activities of the firm.

Debating the international legitimacy of the G20: global policymaking and contemporary international society

There have been growing debates about the legitimacy and the future of the G20 (the Group of Twenty) leaders forum despite this forum playing a prominent role in response to the 2008 Global Financial Crisis. While states within the G20 assert the legitimacy of the G20, states outside the G20 actively question this forum’s legitimacy. This article contends that while the G20 is important to contemporary global governance and efforts to create a common framework of rules for global capitalism, this ongoing debate demonstrates that the legitimacy of the G20 is fundamentally uncertain and problematic because the G20’s membership and connection to existing forms of multilateralism remain contentious. This article contends that G20 leaders need to consider these issues in light of the prevailing expectations of states in contemporary international society.

Economic crisis in Korea and the degraded developmental state

This article analyses the Korean developmental state since the late 1990s, and argues that the state has continued to play a weighty role in the economy. The state guided industrial and financial restructuring after the Asian economic crisis, and intervened to stimulate the economy during the 2008 global financial crisis. In doing so, state elites have displayed a distinctive form of economic leadership that is largely consistent with the developmental state. Rather than focusing predominantly on performance-related indicators of state strength such as growth rates, this article analyses the deeper aspects of the developmental state, specifically its internal functions and its collaboration with business. The article brings politics back into analysis of the developmental state by questioning the assumption that strong economic performance is necessary for the maintenance of close ties between the state and chaebol. Instead, economic performance is better understood as a predictor of patterns of conflict and cooperation. Longstanding ties between the state and big business have endured two significant economic crises, even if the performance of the developmental state has been degraded compared to earlier decades.

Sovereign risk and the impact of crisis: evidence from Latin America

We utilize the default by Argentina in 2001 and the Global Financial Crisis in 2008, as natural experiments, to monitor the complex interactions between sovereign bonds when subjected to endogenous and exogenous shocks. By forming pairs of Latin American sovereign bonds, bundled into similar maturity class, the analysis highlights the complex nature of risk shifting, and the temporal nature of the volatility transmission and sharing mechanisms in the lead up to, and after, a crisis period. The results show that shorter maturity groups and longer maturity groups behave in fundamentally different ways in terms of volatility transmission, while one or two leading countries act as regional benchmarks. The dynamics are consistent with temporal but segmented investor preferences, with the arrival of crisis contributing to a breakdown in the previous relationships. In addition, there is additional economic benefit from utilizing knowledge of the volatility structure underlying the historic transmission channels to improve the portfolio outcomes of market participants.

Decision making to support an integrated infrastructure supply chain industrial ecological approach within public private partnerships

Supply chains are complex adaptive systems for which final performance depends upon numerous interdependent decisions made by numerous firms which synthesise inputs from various resources systems.  The dynamic interdependent behaviour of social, economic, material and informational resource systems within eco-industrial settings that support the built environment life cycle supply chains can be studied at the supply chain level.  The impact of megaprojects is significant and holds promise to explore the impact of decisions on various systems as it combines project and system boundaries.  Megaoprojects considered as major events within systems can produce critical revolutionary impacts on the systems within which they are embedded.  The decisions that are made on megaprojects are central to risk management.  typically major infrastructure projects are procured through a form of public private partnership (PPP).  The core principle of PPP is value for money which refers to the best available outcome attempting to take account of all benefits, costs and risks over the whole life of the procurement.  In this paper the focus is on Australia where there has been considerable acitivity in the use of PPPs.  With recent national infrastucture packages proposed to stimulate the economy due to the global financial crisis, decision modelling on risks is a revelant and critical matter not only in practice but also in the research community.  PPPs encourage the whole-of-lifecycle approach in the procurement and management of public sector assets by transparently recognising the costs and risks associated with the whole life of the required service or facility, thus integrated whole of life supply chains can be considered.  By creating a single point of responsibility for an entire project from inception through operation, a strong incentive is created for thinking about the effects that a design or construction decision will have on the effectiveness and efficiency of managing and maintaining a facility during its operational life.  The decision to procure holistic supply chains becomes a much more viable commercial reality in the PPP environment than previously considered in the usual commercial construction spot transactional approach.  These types of decisions tend to be imprecise, approximate and complex requireing justification and reasoning logic rather than the classical 'truth' logic.  The purpose of this paper is to develop a theoretical decision framework which combines interdependency and multi-values logic for supply chain procurement modelling.

The macroeconomics of sovereign wealth funds

The dramatic growth in sovereign wealth funds (SWFs) has implications which are still emerging for national economies and globally. This paper considers why SWFs have become key international financial institutions for some countries, particularly developing ones. This adds to the literature on second best development strategies (Hausmann and Rodrik 2003), here applying it to SWFs. A macroeconomic approach is taken towards the phenomenon of reserves accumulation and motives for SWFs. These are evaluated in terms of the pattern of balance of payments and inferred trade and exchange policies. The role of SWFs in promoting country growth and international stability is considered in view of the global financial crisis (GFC).

The ethical and policy implications of profiling 'vulnerable' customers

In the shadow of the global financial crisis, the issue of the marketing of credit has become an increasing concern in the past 12 months. Outstanding personal debt in the UK currently stands at £1479 billion and is rising by £1 million every 10.6 min. In Australia, there is currently $44.6 billion worth of outstanding credit card debt, and in the US, $2596 billion was owed on credit cards in 2008. At present, the banking sector utilizes sophisticated research methods to profile consumers, including those who might be considered financially vulnerable. However, the policy frameworks in most industrialized countries do not account for this form of target marketing when considering how to protect vulnerable groups. This paper is an initial attempt to examine the different methods by which profiling is conducted and the policy implications of this sophisticated form of segmentation and targeting. We argue that current consumer policies are inadequate in protecting vulnerable consumers from these marketing techniques, and recent recommendations from the Federal Reserve Bank of the United States, and the Australian Law Reform Commission to allow banks and lenders to ‘pre-screen’ potential customers will exacerbate personal debt levels, rather than reducing them.

Challenges to infrastructure delivery during the economic downturn : a qualitative analysis

Infrastructure plays a key role in creating and maintaining sustainable economic growth and a prosperous community. Infrastructure projects generally require a large amount of capital investment, which motivates involvement from the private sector in the delivery process. The Global Financial Crisis placed enormous pressure on both the public and private sectors, as the ability to borrow money for an extended tenor was greatly reduced. This study adopts a qualitative approach to analyse the challenges facing the delivery of infrastructure projects in an Australian context by considering the impacts of the Global Financial Crisis. It is found that the availability of resources and finance are perceived as the biggest challenges, with resources being more of a concern than finance to interviewees. In addition to these findings, ways in which the private sector can be better involved in the infrastructure delivery is discussed.

Staying healthy : the case of cotton and cane growers in Australia

Farmers and fishers have always been exposed to the vagaries of climate and global economic forces. However, in recent years there has been an accumulation of factors which are having a particularly severe impact upon rural Australia. The global financial crisis has negatively affected commodity prices and the viability of some rural communities is under threat. There is evidence to suggest that climate change is already impacting adversely on many primary producers and their ability to farm using traditional methods. Furthermore, many parts of rural Australia are still experiencing the effects of long-term drought and associated problems. Together, these circumstances can rightly be conceived of as 'difficult times'. Key areas recently identified in a decline in mental health among farmers include: increasing isolation, ongoing drought, increased government regulations, and a widening of the schism between urban and rural Australians. While there is a body of literature on behaviour around illness in the context of the stress of ' difficult times', there is little on preventative behaviours in these circumstances. This chapter reports preliminary findings from an exploratory research projects that investigates the process by which farmers and fishers achieve and maintain good physical and mental health in the context of 'difficult times'. The research takes a multiple case study approach, with five Australian sites, each with a different industry base, representing communities undergoing 'difficult times'. This chapter focuses on two of the sites and data obtained from interviews with farmers in the cotton and sugar industries. It discusses the behavioural choices that they make to maintain good physical health and mental wellbeing. These include choices about nutrition, physical activity, social connections such as participation in community, social or farm-related groups, opportunities for relaxation and regular medical check-ups.

Need to know : lessons from Sino-Australian business negotiators on the importance of guanxi, emotions and generational differences in Chinese negotiation behaviour

The forces of globalisation over the last few decades have created opportunities for intemational business as never before, whilst leaving no organisation immune to competition. With the Global Financial Crisis impacting the world economy, the BRIC economies as a group - Brazil, Russia, India and China, have steadily benefited from continuing growth in 2008 and 2009 (Bhattacharya, Hemerling and Waltermann,2010). Despite China being a key international trading partner for Australia, the number of successful joint ventures and negotiations between the two countries remains limited. A closer examination of the international business interactions between Australia and China is thus urgently needed. When negotiating with the Chinese, Western managers may not always be aware of what they are really negotiating for. To be successful, they have to be equipped with the 'specialised knowledge', a form of 'tacit or implicit knowledge', which comes with experience (Nonaka, 1994, Pavesi, 2003) in communicating and negotiating with their Chinese counterparts. The Chinese way of business negotiation can challenge the logic of Western business thinking. This, coupled with possible generational differences or changes in the Chinese business counterpart's way of doing business, means we must try to understand the business communication and negotiation process from not only the Western but also the Chinese perspective. In particular, in addition to the contextual (Phatak, & Habib, 1996; Risberg, 1997), social (Ghauri, & Fang, 2001), and cognitive factors (George, Gareth, & Gonzalez, 1998) focused on by past researchers, the intangible aspects of negotiation must also be considered. These include trust, reputation, relationship quality (guanxi in the case of the Chinese), and the moods and emotions that shape the processes and outcomes of communication and negotiation (Griffith, 2002; Hartel & Ma, 2006; Ma & Hartel 2005; and Zhao & Krohmer, 2006). This paper reports on a qualitative investigation of the communication processes occurring in negotiations between Australian and Chinese managers and entrepreneurs. The examination is based on a theoretical framework looking at emotions and culture from an affective events theory (AET) perspective. Both interview and focus groups techniques were used. Findings identified guanxi, core to relationship development and maintenance in Chinese culture, together with emotions as major determining factors of negotiation outcomes. Findings also suggest there are generational differences in attitudes among Chinese managers with Gen. X and Gen. Y placing a different emphasis on guanxi in business. These findings suggest that the popular advice to people doing business in China is out of date.

The underpricing of US REIT IPOs : 1996–2010

This study examines the underpricing cost of 123 US REIT IPOs over the period 1996 until June 2010, including the period of the global financial crisis. The study uses OLS multivariate regression to determine some potential factors behind underpricing. The underpricing cost of raising REIT external equity averaged 3.18% using an equal weighting for each of the 123 REIT IPOs. The study finds offer size is positively related to underpricing. A value weighted approach finds that underpricing averages 4.67% and suggests larger offer size is an important determinant for leaving more money on the table. Higher reputation underwriters, the industry differentiated auditor and post offer ownership structure negatively influence underpricing. The study documents declining underpricing over time with the period of 2007–2010 experiencing negative underpricing (overpricing) during the global financial crisis (GFC). Offers during the hot periods of 1997 and 2004 and the office/industrial property type were more highly underpriced. The 10-year treasury interest rate is identified as another significant positive determinant of underpricing.

Defining educational research : a perspective of/on presidential addresses and the Australian Association for Research in Education

This paper is concerned with the definition of the field of educational research and the changing and developing role of the Australian Association for Research in Education (AARE) in representing and constituting this field. The evidence for the argument is derived from AARE Presidential Addresses across its 40-year history. The paper documents the enhanced complexity and diversity of the field over these 40 years, including the emergence of a global educational policy field, theoretical and methodological developments in the social sciences and new research accountabilities such as the Excellence in Research for Australia (ERA) measure. Specifically, the paper suggests that the evidence-based movement in public management and education policy, and the introduction of the ERA, potentially limit and redefine the field of educational research, reducing the usefulness and relevance of educational research to policy makers and practitioners. This arises from a failure to recognise that Education is both a field of research and a field of policy and practice. Located against both developments, the paper argues for a principled eclecticism framed by a reassessment of quality, which can be applied to the huge variety of methodologies, theories, epistemologies and topics legitimately utilised and addressed within the field of educational research. At the same time, the paper argues the need to globalise the educational research imagination and deparochialise educational research. This call is located within a broader argument suggesting the need for a new social imaginary (in a post-neoliberal context of the global financial crisis) to frame educational policy and practice and the contribution that educational theory and research might make to its constitution. In relation to this, the paper considers the difficulties that political representations of such a new imaginary might entail for the President and the Association, given the variety of its membership and huge diversity of its research interests.