The changing landscape of financial markets in Europe, the United States and Japan. Bruegel Working Paper 2013/02, 18 March 2013

We compare the structure of the financial sectors of the EU27, Japan and the United States, looking at a set of 23 indicators. We find a large variation within the European Union in the structure of the financial sector. Using principal components analysis, we identify robust groups of EU countries. One group consists of the eastern European members that entered the EU more recently.These have substantially smaller financial sectors than the old member states. A second group can be classified as market-based (MBEU) and the third group is more bank-based (BBEU). We compare US, MBEU, BBEU, Eastern EU and Japan with the following main results. First, the groups within Europe are geographically related. Second, in many indicators, MBEU countries are closer to the (market-based) US, while BBEU countries more closely resemble Japan. Paradoxically, however, market-based EU countries also have large banking sectors. Banks in market-based countries have larger cross-border assets and liabilities, and derive a larger fraction of their income from fees, rather than interest income, than banks in bank-based countries. Finally, for most indicators, the ordering of groups of countries is quite stable over time, but while the crisis has had no impact on the relative ordering of the groups, it has slightly widened the gap between the US and all EU regions insome respects. We also find that during the crisis, substitution between market-based and bank-based sources of finance occurred in the US, and to a lesser extent in MBEU and BBEU countries.

A Viable Alternative to Basel III Prudential Capital Rules. CEPS Policy Brief No. 291, May 2013

Stefano Micossi argues in this paper that the Basel framework for bank prudential requirements is deeply flawed and that the Basel III revision has failed to correct these flaws, making the system even more complicated, opaque and open to manipulation. In practice, he finds that the present system does not offer regulators and financial markets a reliable capital standard for banks and its divergent implementation in the main jurisdictions of the European Union and the United States has broken the market into special fiefdoms governed by national regulators in response to untoward special interests. The time is ripe to stop tinkering with minor adjustment and revisions in order to rescue the system, because the system cannot be rescued. In response to the current situation, Micossi calls for abandoning reference to risk-weighted assets calculated by banks with their internal risk management models for the determination of banks’ prudential capital, together with the preoccupation with the asset side of banks in correcting for risk exposure. He suggests that the alternative may be provided by a combination of a straight capital ratio and a properly designed deposit insurance system. It is a logical, complete and much less distortive alternative; it would serve better the cause of financial stability as well as the interest of the banks in clear, transparent and level playing field.

An Asian alternative? Russia's chances of making Asia an alternative to relations with the West. OSW Point of View, June 2008

Under Vladimir Putin's rule, Russia consistently and systematically expanded its activity in Asia, establishing closer political contacts with key countries in the region, rebuilding relations with former allies from Soviet times, and strengthening its presence in the Asian markets, in the energy sphere also. These activities were accompanied by intensive Russian propaganda, the message of which was that relations with the West can be restricted in favour of developing closer relations with Asian states. A justified question concerning the Russian Federation's realistic possibilities arises in this context: To what extent can it make Asia an alternative to theWest in geopolitical, economic and energy terms? Can Russia build an anti-Western alliance with Asian states? Is it able to reduce its dependence on the European market by developing its trade with Asia? Is it possible to redirect a substantial portion of Russian energy resource exports onto Asian markets? A presentation of the existing ties between Russia and theWest (here considered as the USA and the EU) will serve as a starting point for answering these questions. The following chapters will analyse Russia's opportunities in Asia in terms of geopolitical issues, the economy and energy

Key Issues and Developments in Farmland Sales Markets in the EU Member States and Candidate Countries. Factor Markets Working Paper No. 12, February 2012

This paper describes recent developments in sales markets of agricultural land in selected member states of the European Union and its candidate countries. Analysis focuses on the importance of the sales market for agricultural land, the average size of transacted plots, and the evolution and magnitude of the land sales prices. The share of agricultural land sold on the market is relatively stable in most of the old member states, with the exception of Finland, the Netherlands and the UK, where a more dynamic market is observed. For the new member states, the sales market for agricultural land is strongly affected by public sales under the ongoing land privatisation programmes, while strong variation prevails in the private sales market. Substantial differences are also observed in both the average size of the transacted plots and the sales prices. For the latter, price regulations partially explain the heterogeneity in the evolution of sales prices.

Does All Fit One Size? An evaluation of the ECB policy response to changing economic conditions in the Euro area member states. ACES Cases No. 2008.1

This paper empirically investigates the extent to which the European Central Bank has responded to evolving economic conditions in its member states as opposed to the euro area as a whole. Based on a forward-looking Taylor rule-type policy reaction function, we conduct counterfactual exercises that compare the monetary policy behavior of the ECB with two alternative hypothetical scenarios: (1) were the euro member states to make individual policy decisions, and (2) were the ECB to respond to the economic conditions of individual members. The results reflect the extent of heterogeneity among the national economies in the monetary union and indicate that the ECB's monetary policy rates have been particularly close to the "counterfactual" interest rates of its largest euro members, as well as of countries with similar economic conditions, which includes Germany, Austria, Belgium and France.

New Approaches, Alternative Avenues and Means of Access to Asylum Procedures for Persons Seeking International Protection. CEPS Liberty and Security in Europe No. 77/ January 2015

This study examines the workings of the Common European Asylum System (CEAS), in order to assess the need and potential for new approaches to ensure access to protection for people seeking it in the EU, including joint processing and distribution of asylum seekers. Rather than advocating the addition of further complexity and coercion to the CEAS, the study proposes a focus on front-line reception and streamlined refugee status determination, in order to mitigate the asylum challenges facing Member States, and vindicate the rights of asylum seekers and refugees according to the EU acquis and international legal standards. Joint processing could contribute to front-line reception and processing capacity, but is no substitute for proper investment in national systems. The Dublin system as currently configured leads inexorably to increasing coercion and detention, and must thus be reconfigured to remove coercion as a principle and ensure consistency with human rights and other fundamental values of the EU.

Pro-American non-alignment. Sweden and Finland develop closer military co-operation with the United States. OSW COMMENTARY NUMBER 205/31.03.2016

Russia’s increasingly aggressive policy and its enhanced military activity in the Nordic-Baltic region has led to revaluations in Sweden’s and Finland’s security and defence policies and a rethinking of the formats of their military co-operation. While remaining outside NATO, the two states have been developing closer bilateral defence co-operation and working more closely with the United States, while at the same time developing co-operation with NATO. Sweden and Finland perceive the United States as the guarantor of regional and European security. From their point of view, the United States is currently the country that has both the necessary military capabilities and the political will to react in the event of a conflict between Russia and NATO in the Nordic-Baltic region, in which both countries would inevitably become involved despite their non-aligned status. For Sweden and Finland, intensified co-operation with the United States offers an alternative to NATO membership, which is currently out of the question for domestic political reasons. Meanwhile, the US has also become increasingly aware of the strategic importance of the two states, which, for the purposes of contingency planning, are in fact an extension of NATO’s north-eastern flank.

On the initiation of boudinage and folding instabilities in layered elasto-visco-plastic solids - Insights from natural microstructures and numerical simulations

The present understanding of the initiation of boudinage and folding structures is based on viscosity contrasts and stress exponents, considering an intrinsically unstable state of the layer. The criterion of localization is believed to be prescribed by geometry-material interactions, which are often encountered in natural structures. An alternative localization phenomenon has been established for ductile materials, in which instability emerges for critical material parameters and loading rates from homogeneous conditions. In this thesis, conditions are sought under which this type of instability prevails and whether localization in geological materials necessarily requires a trigger by geometric imperfections. The relevance of critical deformation conditions, material parameters and the spatial configuration of instabilities are discussed in a geological context. In order to analyze boudinage geometries, a numerical eigenmode analysis is introduced. This method allows determining natural frequencies and wavelengths of a structure and inducing perturbations on these frequencies. In the subsequent coupled thermo-mechanical simulations, using a grain size evolution and end-member flow laws, localization emerges when material softening through grain size sensitive viscous creep sets in. Pinch-and-swell structures evolve along slip lines through a positive feedback between the matrix response and material bifurcations inside the layer, independent from the mesh-discretization length scale. Since boudinage and folding are considered to express the same general instability, both structures should arise independently of the sign of the loading conditions and for identical material parameters. To this end, the link between material to energy instabilities is approached by means of bifurcation analyses of the field equations and finite element simulations of the coupled system of equations. Boudinage and folding structures develop at the same critical energy threshold, where dissipative work by temperature-sensitive creep overcomes the diffusive capacity of the layer. This finding provides basis for a unified theory for strain localization in layered ductile materials. The numerical simulations are compared to natural pinch-and-swell microstructures, tracing the adaption of grain sizes, textures and creep mechanisms in calcite veins. The switch from dislocation to diffusion creep relates to strain-rate weakening, which is induced by dissipated heat from grain size reduction, and marks the onset of continuous necking. The time-dependent sequence uncovers multiple steady states at different time intervals. Microstructurally and mechanically stable conditions are finally expressed in the pinch-and-swell end members. The major outcome of this study is that boudinage and folding can be described as the same coupled energy-mechanical bifurcation, or as one critical energy attractor. This finding allows the derivation of critical deformation conditions and fundamental material parameters directly from localized structures in the field.

Pliocene-Pleistocene stack of globally distributed benthic stable oxygen isotope records

We present a 5.3-Myr stack (the ''LR04'' stack) of benthic d18O records from 57 globally distributed sites aligned by an automated graphic correlation algorithm. This is the first benthic delta18O stack composed of more than three records to extend beyond 850 ka, and we use its improved signal quality to identify 24 new marine isotope stages in the early Pliocene. We also present a new LR04 age model for the Pliocene-Pleistocene derived from tuning the delta18O stack to a simple ice model based on 21 June insolation at 65 N. Stacked sedimentation rates provide additional age model constraints to prevent overtuning. Despite a conservative tuning strategy, the LR04 benthic stack exhibits significant coherency with insolation in the obliquity band throughout the entire 5.3 Myr and in the precession band for more than half of the record. The LR04 stack contains significantly more variance in benthic delta18O than previously published stacks of the late Pleistocene as the result of higher resolution records, a better alignment technique, and a greater percentage of records from the Atlantic. Finally, the relative phases of the stack's 41- and 23-kyr components suggest that the precession component of delta18O from 2.7-1.6 Ma is primarily a deep-water temperature signal and that the phase of d18O precession response changed suddenly at 1.6 Ma.

Stable isotope ratios of epibenthic foraminifer Cibicidoides wuellerstorfi from sediment profile GeoB9526

Studies of temporal changes of ocean circulation and deep-water ventilation often rely on d13C records of epibenthic foraminifer Cibicidoides wuellerstorfi. However, primary productivity related overprints may distort the signal and simulate a chemical age of ambient water mass that is too old and simulates poorly ventilated ambient bottom waters. To further constrain the use of C. wuellerstorfi d13C records from high-productivity areas, we analyzed a 14CAMS-dated gravity core from the upwelling regime off northwest Africa at 12°N. We compare this new record with 37 radiocarbon dated d13C records from the eastern Atlantic Ocean between 45°N and 25°S that are bathed by the same water mass. Only during Heinrich events 1 and 2, when the investigated core site off northwest Africa experienced year-round, sustained deposition of organic matter, the d13C values at this site faithfully record deep-water ventilation states. During times of predominantly seasonal deposition of fresh phytodetritus, however, d13C values were significantly lower than at the reference sites. This underscores that reconstruction of paleocirculation and deep ocean ventilation using C. wuellerstorfi d13C from regions that experienced seasonal phytodetritus deposition needs to be validated by additional proxies that are not affected by local productivity.

Stable carbon isotope record of sediment core Ancora

The standard paradigm that the Paleocene/Eocene thermal maximum (PETM) represents a threshold event intrinsic to Earth's climate and connected in some way with long-term warming has influenced interpretations of the geochemical, climate, and biological perturbations that occurred at this event. As recent high-resolution data have demonstrated that the onset of the event was geologically instantaneous, attempts to account for the event solely through endogenous mechanisms have become increasingly strained. The rapid onset of the event indicates that it was triggered by a catastrophic event which we suggest was most likely a bolide impact. We discuss features of the PETM that require explanation and argue that mechanisms that have previously been proposed either cannot explain all of these features or would require some sort of high-energy trigger. A bolide impact could provide such a trigger and, in the event of a comet impact, could contribute directly to the shape of the carbon isotope curve. We introduce a carbon cycle model that would explain the PETM by global warming following a bolide impact, leading to the oxidation of terrestrial organic carbon stores built up during the late Paleocene. Our intention is to encourage other researchers to seriously consider an impact trigger for the PETM, especially in the absence of plausible alternative mechanisms.

Sea surface temperature and stable isotopes from 9 cores of the Northeastern Atlantic

Temporal and spatial patterns in eastern North Atlantic sea-surface temperatures (SST) were reconstructed for marine isotope stage (MIS) 11c using a submeridional transect of five sediment cores. The SST reconstructions are based on planktic foraminiferal abundances and alkenone indices, and are supported by benthic and planktic stable isotope measurements, as well as by ice-rafted debris content in polar and middle latitudes. Additionally, the larger-scale dynamics of the precipitation regime over northern Africa and the western Mediterranean region was evaluated from iron concentrations in marine sediments off NW Africa and planktic d13C in combination with analysis of planktic foraminiferal abundances down to the species level in the Mediterranean Sea. Compared to the modern situation, it is revealed that during entire MIS 11c sensu stricto (ss), i.e., between 420 and 398 ka according to our age models, a cold SST anomaly in the Nordic seas co-existed with a warm SST anomaly in the middle latitudes and the subtropics, resulting in steeper meridional SST gradients than during the Holocene. Such a SST pattern correlates well with a prevalence of a negative mode of the modern North Atlantic Oscillation. We suggest that our scenario might partly explain the longer duration of wet conditions in the northern Africa during MIS 11c compared to the Holocene.