Banks and the Racial Patterning of Homicide: A Study of Chicago Neighborhoods

While bank investment is a driving force behind neighborhood viability, few studies have directly examined the effects of bank loan practices on neighborhood crime rates. This paper proposes that residential bank loan policies help explain the higher rates of homicide in minority neighborhoods in Chicago compared to white neighborhoods. It finds that black and Latino neighborhoods would experience fewer homicides if more financial capital were infused into these neighborhoods. These findings suggest that neighborhoods are shaped profoundly by the decisions of external economic actors.

Integrating Islamic Positions into European Public Discourse: The Paradigmatic Example of Tariq Ramadan

As the continuing relevance of religion to secular European societies garners increasing recognition, the question remains of which religious positions may assume a public role, with Islam at the center of many debates. This article complements the ongoing theoretical debate with a detailed case study analyzing the major works of Islamic scholar and public intellectual Tariq Ramadan. I show that in the last two decades Ramadan significantly modified his views on Islam and European societies. I argue that these adjustments were interdependent, and as such paradigmatically illustrate that the integration of Islamic positions into public discourse depends on shifts in the understanding of both concepts.

Anke von Kügelgen on Contemporary Islamic Thought

Anke von Kügelgen joins Peter to discuss developments over the last century or so, including attitudes towards past thinkers like Avicenna, Averroes and Ibn Taymiyya. This interview is based on research conducted to write a forthcoming book on Philosophy in the Islamic world in the 19th and 20th centuries, to be co-edited by Prof von Kügelgen together Professor Ulrich Rudolph, and Michael Frey as redactor. It will be the fourth volume of a German Overview of the whole history of philosophy in the Islamic world (Grundriss der Geschichte der Philosophie in der islamischen Welt, published by Schwabe Verlag in Basel). Prof von Kügelgen would like to recognize the contribution of her collaborators: her main partner for the philosophy in the Arab speaking countries is Sarhan Dhouib, originally from Tunesia, now at the University of Kassel. For Muslim Southasia, she is working with Jan Peter Hartung from the SOAS in London, and for Iran, Reza Hajatpour, Katajun Amirpur and Roman Seidel who are all at present at German Universities. The part on Philosophy in the Ottoman Empire is written by Sait Özervarlı from the Yildiz Teknik Universitesi in Istanbul and for Turkey by Christoph Herzog from the University of Bamberg.

Stories of banks and bankers

by Frederick Martin

The Optimal Capital Structure of Banks: Balancing Deposit Insurance, Capital Requirements and Tax-Advantaged Debt

The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its costs (e.g., bankruptcy costs). However, when traditional corporate finance models have been applied to insured financial institutions, the results have generally predicted corner solutions (all equity or all debt) to the capital structure problem. This paper studies the impact and interaction of deposit insurance, capital requirements and tax benefits on a bankÇs choice of optimal capital structure. Using a contingent claims model to value the firm and its associated claims, we find that there exists an interior optimal capital ratio in the presence of deposit insurance, taxes and a minimum fixed capital standard. Banks voluntarily choose to maintain capital in excess of the minimum required in order to balance the risks of insolvency (especially the loss of future tax benefits) against the benefits of additional debt. Because we derive a closed- form solution, our model provides useful insights on several current policy debates including revisions to the regulatory framework for GSEs, tax policy in general and the tax exemption for credit unions.