The pricing of deposit insurance in the presence of systematic risk

Based on the Merton (1977) put option framework, we develop a deposit insurance pricing model that incorporates asset correlations, a measurement for the systematic risk of a bank, to account for the risk of joint bank failures. Estimates from our model suggest that actuarially fair risk-based deposit insurance that considers only individual bank failure risk is underpriced, leaving insurance providers exposed to net losses. Our estimates also capture the size premium where big banks are priced with higher deposit insurance than small banks. This result is particularly relevant to the current regulatory concerns on big banks that are too-big-to-fail. Above all, our approach provides a unifying framework for integrating risk-based deposit insurance with risk-based Basel capital requirements.

Cold rolling mill thickness control using the cascade-correlation neural network

The improvements in thickness accuracy of a steel strip produced by a tandem cold-roIling mill are of substantial interest to the steel industry. In this paper, we designed a direct model-reference adaptive control (MRAC)  scheme that exploits the natural level of excitation existing in the closed-loop with a dynamically constructed cascade-correlation neural network (CCNN) as a controller for cold roIling mill thickness control. Simulation results show that the combination of a such a direct MRAC scheme and the dynamically constructed CCNN significantly improves the thickness accuracy in the presence of disturbances and noise in comparison with to the conventional PID controllers.

Mortgages and bonds: the asset management practices of Australian life insurers to 1960

Recent studies of the experience of the British life insurance industry indicate that a period of transition, and the development of more diversified investment strategies, began in the interwar period. Australian life insurers lagged behind their British counterparts in the introduction of such strategies. This paper investigates why this was the case. It argues that in the Australian market there was both a lack of opportunity and incentive to broaden asset portfolios. However, this did not mean that asset management practices did not advance. Australian life offices became progressively more sophisticated in their approach to portfolio management during this period. Developments in the interwar period provided a grounding for post-war expansion into the equity market.

Order of question presentation and correlation between judgments of comparative and own risk

Unrealistic optimism is often assessed using a single question asking for an estimate of comparative risk. However, it has been proposed that individuals treat such a question essentially as though it were only about their own risk. This proposal leads to the prediction that, when the questions about own risk and comparative risk are asked in sequence, the correlation between the resulting estimates should be lower if the question about own risk comes first than if the question about comparative risk comes first. This prediction was tested using a student sample (N=68). Participants answered the two types of question in sequence, with order of presentation being counterbalanced. Results were in accord with the prediction. Possible reasons are advanced for individuals' answering questions about comparative risk as if the questions concerned their own risk.

Motor unit synchronization measured by cross-correlation is not influenced by short-term strength training of a hand muscle

The purpose of the study was to quantify the strength of motor unit synchronization and coherence from pairs of concurrently active motor units before and after short-term (4–8 weeks) strength training of the left first dorsal interosseous (FDI) muscle. Five subjects (age 24.8 ± 4.3 years) performed a training protocol three times/week that consisted of six sets of ten maximal isometric index finger abductions, whereas three subjects (age 27.3 ± 6.7 years) acted as controls. Motor unit activity was recorded from pairs of intramuscular electrodes in the FDI muscle with two separate motor unit recording sessions obtained before and after strength training (trained group) or after 4 weeks of normal daily activities that did not involve training (control group). The training intervention resulted in a 54% (45.2 ± 8.3 to 69.5 ± 13.8 N, P = 0.001) increase in maximal index finger abduction force, whereas there was no change in strength in the control group. A total of 163 motor unit pairs (198 single motor units) were examined in both subject groups, with 52 motor unit pairs obtained from 10 recording sessions before training and 51 motor unit pairs from 10 recording sessions after training. Using the cross-correlation procedure, there was no change in the strength of motor unit synchronization following strength training (common input strength index; 0.71 ± 0.41 to 0.67 ± 0.43 pulses/s). Furthermore, motor unit coherence z scores at low (0–10 Hz; 3.9 ± 0.3 before to 4.4 ± 0.4 after) or high (10–30 Hz; 1.7 ± 0.1 before to 1.9 ± 0.1 after) frequencies were not influenced by strength training. These motor unit data indicate that increases in strength following several weeks of training a hand muscle are not accompanied by changes in motor unit synchronization or coherence, suggesting that these features of correlated motor unit activity are not important in the expression of muscle strength.

Compositional dynamics of a commercial wine fermentation using two-dimensional FTIR correlation analysis

We have demonstrated that compositional changes occurring during a commercial red wine fermentation can be effectively monitored using FTIR spectroscopy and modelled with the aid of two-dimensional correlation techniques. This study represents a novel application of two-dimensional spectroscopy and showed that the reaction rates for the conversion of fructose and glucose to alcohol were different, with the latter being more rapid. The use of a simple three-component model serves to aid interpretation of the data and the results obtained confirm the value of two-dimensional FTIR correlation spectroscopy as a chemometric tool which has considerable potential for process monitoring.

The Permian-Triassic Boundary Stratigraphic Set: characteristics and correlation

Eased on field observations and compilation of data, a new stratigraphic concept, herein named the Permian-Triassic boundary stratigraphic set (PTBST), is proposed. The PTBST consists of, in ascending order, beds of claystone, limestone (or marl) and claystone. This boundary stratigraphic
set has been recognized at many sections in the Yangtze region of South China, with laterally stable lithological characters, the same or comparable biotas, comparable radiometric ages, and identical or similar magnetostratigraphic and chemostratigraphic signals. Therefore, the PTBST marks an isochronous unit and can serve as an important and effective marker set for regional and global correlations.
The important index fossils for the lowermost Triassic, Hindeodus parvus or Claraia, may be diachronous in their first occurrences with respect to the base of the PTBST and, therefore, should not be used as an exclusive indicator for the beginning of the Triassic. Rather more attention should
be paid to events, succession of events and/or event surfaces, which would potentially provide a more precise tool for high-resolution stratigraphic division and correlation.

The future of Victoria's greatest asset : the coast. An independent review of the Coastal Management Act 1995 after ten years of operation

This report is in essence a critique of the Victorian Coastal Management Act 1995 (VCMA), followed by recommendations for improving the Act and its implementation. The author recognises that of course the Coastal Management Act 1995 is far from the sole piece of legislation or element of governance for Victorian coastal planning and management (see Wescott, 1988.1990,1993,1995, Birrell,1994). But the Act is the leading element of Victorian coastal governance and hence an analysis and critique of its operation after ten years, and recommendations for improvements to the Act, should enhance future coastal planning and management.

Correlation between optical and SEM measurements of wool cortical cell size

Wool fibres consist of micro to nano scale protein constituents that could be used for innovative applications. While techniques for extracting these constituents or making wool fibres into organic powders have been developed, effectively dispersing the particles and accurately determining their size has been difficult in practice. In this study, an ultrasonic method was employed to disperse cortical cells extracted from wool fibres into an
immersion oil or ethanol. Specimens of the cortical cells were then observed under optical microscopy and scanning electron microscopy, respectively. Cell length and maximum cell diameter were measured to quantify the cell size. The results suggest significant discrepancies exist in the cortical cell size obtained from the two different measurement techniques. The maximum diameter of wool cortical cells obtained from the optical microscope was much larger than that from the scanning electron microscope, while the length was much shorter. A correction factor is given so that cortical cell size obtained from the two measurement techniques can be compared.