Stress testing credit risk: the Great Depression scenario

By employing Moody’s corporate default and rating transition data spanning the last 90 years we explore how much capital banks should hold against their corporate loan portfolios to withstand historical stress scenarios. Specifically, we will focus on the worst case scenario over the observation period, the Great Depression. We find that migration risk and the length of the investment horizon are critical factors when determining bank capital needs in a crisis. We show that capital may need to rise more than three times when the horizon is increased from 1 year, as required by current and future regulation, to 3 years. Increases are still important but of a lower magnitude when migration risk is introduced in the analysis. Further, we find that the new bank capital requirements under the so-called Basel 3 agreement would enable banks to absorb Great Depression-style losses. But, such losses would dent regulatory capital considerably and far beyond the capital buffers that have been proposed to ensure that banks survive crisis periods without government support.

"Just as fragments are part of a vessel": a translation into medieval Occitan of the life of Alexander the Great

This article examines a 14th-c. translation into Old Occitan prose of a late-antique life of Alexander the Great: Justin’s Epitome of the 'Historia Philippicae' of Pompeius Trogus. The article argues that it is the work of translators whose knowledge of pagan Latin materials was incomplete and whose use of their native tongue rested on non-literary bases. This text has not been edited before, and examining its uneven treatment of its source provides important new insights into the work of translators in the later Middle Ages. In conclusion, the article suggests some new approaches to the understanding of translation as a process of reconstruction and adaptation.

English Contract Law and the Great War: the development of a doctrine of frustration

This article examines changes that occurred in English contract law as a result of the demands made upon Great Britain by the Great War. The focus is on the development of the doctrine of frustration in English law. In particular, it is argued that the development of the doctrine of frustration was fashioned from internal legal forces in the form of both existing case law and emergency legislation in response to the demands placed upon the nation by a global war. The way in which the doctrine of frustration developed during the Great War arose as a direct result of the way in which Britain chose to meet the logistical demands created by the way it fought the Great War.