Tough love for sinners in the eurozone banking union. CEPS Commentary, 1 July 2013

The ministers of finance and the economy of the eurozone have now agreed on the main features of a new ESM instrument for the direct recapitalisation of euro area banks (Eurogroup, 2013) and on a framework for the recovery and resolution of credit institutions (Council of the European Union, 2013). However, as Stefano Micossi explains in this Commentary, the text that has come out of the frantic late-night negotiations in the Ecofin Council seems to leave unwelcome uncertainty as to the real scope of the new rules in the different national jurisdictions, while the lack of depositor preference in the bail-in pecking order may result in destabilisation. The proposed system appears not only highly intrusive but it also places a considerable burden of aid to the failing institution on the member state, raising doubts about its ability to “break the vicious circle between banks and sovereigns”.

Completing the Banking Union: Deposit Insurance. CEPS Policy Brief No. 335, 3 December 2015

It is generally agreed that a Banking Union should have common or ‘single’ institutions responsible for carrying out three basic functions: supervision, resolution and deposit insurance. So far, however, agreement has been reached in the EU on only the first two of these functions. The Commission has now presented its proposal on how to complete the Banking Union with a European Deposit Insurance Scheme (EDIS). It is an innovative and courageous proposal. It is courageous because it will clearly be very controversial in a number of member states (especially Germany) and it is innovative because it proposes a three-stage process, starting with re-insurance, then switching to co-insurance and finally to full direct insurance of deposits via a ‘single’ Deposit Insurance Fund (DIF). This final stage should be reached in 2024, which is also the date at which the Single Resolution Fund (SRF) will become the only source of financing for bank resolution. The Commission’s proposal calls for integrating the decision-making for EDIS into the decision-making entity for the SRF, namely the existing Single Resolution Board (SRB). This makes sense if one views resolution and deposit insurance as two highly interlinked dimensions of dealing with banks in trouble. In this view the two dimensions should be bundled into one institution – and one suspects that over time the two funds (the SRF and the DIF) could be merged into one. This Policy Brief argues that re-insurance should not be considered as a transitory phase, but could also provide a solution for the long run. ‘Experience rating’ could be used to ensure a proper pricing of risk and to protect the interests of the depositors in countries with safer banking systems. Moreover, EDIS should have a decision-making structure separate from and independent of the SRM, since it has mainly a macroeconomic function.

Diagnosis of Organizational Soft Problems in a Peruvian Financial Institution by Systemic Thinking

Managing financial institutions in an underdeveloped economic context has become a real challenge nowadays. In order to reach the organization`s planned goals, they have to deal with structural, behavioral and informational problems. From the systemic point of view, this situation gets even worse when the company does not present organizational boundaries and a cohesive identification for their stakeholders. Thus, European countries have some special financial lines in order to help the development of micro credit in Latin communities in an attempt to help the local economy. However, institutions like Caixa dos Andes in Peru present management problems when dealing with this complexity. Based on this, how can the systemic eye help in the diagnosis of soft problems of a Peruvian financial company? This study aims to diagnose soft problems of a Peruvian financial company based on soft variables like identity, communication and autonomy and also intends to identify possible ways to redesign its basic framework. The (VSM--Viable System Model) method from Beer (1967), applied in this diagnostic study, was used in a practical way as a management tool for organizations` analysis and planning. By describing the VSM`s five systems, the creation of a systemic vision or a total vision is possible, showing the organization`s complexity from the inside. Some company`s soft problems like double control, inefficient use of physical and human resources, low information flows, slowness, etc. The VSM presented an organizational diagnosis indicating effective solutions that do integrate its five systems.

Peritonectomy for Peritoneal Carcinomatosis: Long-Term Outcomes from a Single Brazilian Institution

The objective of this study was to evaluate the long-term outcomes of a single institution, Hospital Sirio-Libanes in SA o pound Paulo, Brazil, regarding the treatment of peritoneal carcinomatosis. Between October 2002 and October 2006, 46 consecutive patients were treated with radical cytoreduction and hyperthermic peritoneal chemotherapy. There were 21 patients with peritoneal surface malignancy (PSM) from colorectal origin (among whom 8 had an appendiceal primary), 15 with ovarian carcinomas, 2 with primary peritoneal mesotheliomas, and 8 with other cancers. The median age was 49 years (range 18-77 years). All patients were followed for a median of 20 months. Demographic data, tumor histology, the peritoneal carcinomatosis index (PCI), operative procedures (extension of resection, lymphadenectomy), and hyperthermic intraperitoneal chemotherapy (HIPEC) characteristics (drugs, temperature, duration) were prospectively recorded. Perioperative mortality and morbidity and the long-term outcome were assessed. Complete cytoreduction was achieved in 45 patients. The median PCI was 11, and the mean operating time was 17 h. There were no procedure-related deaths, but major morbidity was observed in 52% and included fistulas, abscesses, and hematologic complications. The overall Kaplan-Meier 4-year estimated survival was 56%. Among patients with PSM from colorectal carcinoma, the estimated 3-year survival was 70%. Nine (42%) patients had a recurrence, three with peritoneal disease. The median disease-free-interval was 16 months. The ovarian cancer patients had an estimated 4-year survival rate of 75% and median disease-free survival duration of 21 months. Cytoreductive surgery with HIPEC may improve survival of selected patients with peritoneal carcinomatosis, with acceptable morbidity.

Chondrosarcoma of Bone Lessons From 46 Operated Cases in a Single Institution

Background Bone chondrosarcomas are rare malignant tumors that have variable biologic behavior, and their treatment is controversial. For low-grade tumors, there is no consensus on whether intralesional en bloc resections are the best treatment. Questions/purposes We therefore compared patients with Grade 1 and Grade 2 primary central chondrosarcomas to (1) determine difference in survival and (2) local recurrence rates; and (3) determine any association of histological grade with some clinical and demographic characteristics. Methods We retrospectively reviewed 46 patients with grade 1 and 2 chondrosarcomas. There were 25 men and 21 women with a mean age of 43 years (range, 17-79 years). Minimum followup was 32 months (mean, 99 months; range, 32-312 months) for the patients who remained alive in the end of the study. Twenty-three of the tumors were intracompartmental (Enneking A); of these, 19 were Grade 1 and 4 were Grade 2. Twenty-three tumors were extracompartmental (Enneking B); of these, 4 were Grade 1 and 19 were Grade 2. Twenty-five patients underwent intralesional resection, 18 had wide resection, and three had amputations. Results The overall survival rate was 94% and the disease-free survival rate was 90%. Among the 23 Grade 1 tumors, we observed six local recurrences and none of these patients died; among the 23 Grade 2 tumors, 10 recurred and two patients died. Local recurrence negatively influenced survival. Conclusions For lesions with radiographic characteristics of intracompartmental Grade 1 chondrosarcoma, we believe intralesional resection followed by electrocauterization and cement is the best treatment. When the imaging suggests aggressive (Grade 2 or 3) chondrosarcoma, then wide resection is promptly indicated.

Perinatal outcome of fetal atrioventricular block - One-hundred-sixteen cases from a single institution

Background-Fetal atrioventricular (AV) block is an uncommon lesion with significant mortality. Because of the rarity of this disorder, the natural course, extensive evaluation of untreated fetuses, and late follow-up remain unclear. Methods and Results-Of the 116 consecutive cases of fetal AV block studied from 1988 to 2006, only 1 was terminated, and 75% were live births. Fifty-nine cases of AV block were associated with major structural heart disease, mainly left atrial isomerism (n = 40), with only 26% of neonatal survivors. Of the 57 fetuses with normal cardiac anatomy, 41 (72%) were positive for maternal antinuclear antibodies, and 32 of these seropositive mothers did not receive any treatment. This untreated group had live-birth and 1-year infant survival rates of 93% and 90%, respectively. Five fetuses from seronegative mothers showed regression to sinus rhythm during pregnancy. The presence of major structural heart disease, hydrops, an atrial rate <= 120 bpm, and a ventricular rate <= 55 bpm were identified as risk factors for mortality. Logistic regression analysis of the whole group showed that the presence of structural heart disease was the only independent predictor of death (P < 0.001). Conclusions-This long-term study confirms that fetal AV block has a poor outcome when associated with structural heart disease and that spontaneous regression of AV block is possible in seronegative forms. The survival rate of >90% of our untreated patients with isolated forms of AV block raises concerns about any decision to intervene with immunosuppressive agents.

Open-economy central banking: Explaining Australia's recommitment to central bank independence

Why do governments offload major instruments such as monetary policy to an independent central bank? This article answers this question in relation to the Australian case, a case which reflects wider global developments. The article challenges the methodology of quantitative approaches to explaining central bank independence and instead argues that a model of 'embedded statism' is the most fruitful explanatory approach.

Single institution outcomes of treatment of severe aplastic anaemia

Background: In severe aplastic anaemia, the treatment of choice for young patients with a human leucocyte antigen-matched sibling is now established as allogeneic bone marrow transplantation (BMT). In older patients and in those without a matched sibling donor, immunosuppressive therapy is the usual first option. 'Alternative' marrow donors are emerging as an option for those without a matched sibling donor. Aims: To review 10 years of local experience in treating severe aplastic anaemia with BMT and immunosuppressive therapy with emphasis on long-term outcomes. Methods: A retrospective analysis was performed of all patients with severe aplastic anaemia presenting to the Royal Brisbane and Royal Children's Hos- pitals between 1989 and 1999. Data were abstracted regarding patient demographics, pretreatment characteristics and outcome measures, including response rates, overall survival and long-term complications. Results: Twenty-seven consecutive patients were identified, 12 treated with immunosuppression alone and 15 with BMT. In these two groups, transfusion independence was attained in 25% and 100%, respectively, with overall survival being 36% and 100%, respectively. Those treated with immunosuppression were significantly older (median 41.5 versus 22 years, P = 0.008). Long-term survivors of either treatment had extremely low morbidity. Three patients carried pregnancies to term post-transplant. Three patients received alternative donor BMT with correspondingly excellent survival. Conclusions: Patients treated with allogeneic BMT for severe aplastic anaemia enjoyed extremely good long-term survival and minimal morbidity. Patients treated with immunosuppressive therapy had a poorer outcome reflecting their older age and different usage of therapies over the past decade. Optimal treatment strategies for severe aplastic anaemia remain to be determined.

The Limits of Rational Choice: New Institutionalism in the Test Bed of Central Banking Politics in Australia

This paper tests the explanatory capacities of different versions of new institutionalism by examining the Australian case of a general transition in central banking practice and monetary politics: namely, the increased emphasis on low inflation and central bank independence. Standard versions of rational choice institutionalism largely dominate the literature on the politics of central banking, but this approach (here termed RC1) fails to account for Australian empirics. RC1 has a tendency to establish actor preferences exogenously to the analysis; actors' motives are also assumed a priori; actor's preferences are depicted in relatively static, ahistorical terms. And there is the tendency, even a methodological requirement, to assume relatively simple motives and preference sets among actors, in part because of the game theoretic nature of RC1 reasoning. It is possible to build a more accurate rational choice model by re-specifying and essentially updating the context, incentives and choice sets that have driven rational choice in this case. Enter RC2. However, this move subtly introduces methodological shifts and new theoretical challenges. By contrast, historical institutionalism uses an inductive methodology. Compared with deduction, it is arguably better able to deal with complexity and nuance. It also utilises a dynamic, historical approach, and specifies (dynamically) endogenous preference formation by interpretive actors. Historical institutionalism is also able to more easily incorporate a wider set of key explanatory variables and incorporate wider social aggregates. Hence, it is argued that historical institutionalism is the preferred explanatory theory and methodology in this case.

Factores determinantes do nível de divulgação sobre instrumentos derivados de acordo com as recomendações do Basel Committee on Banking Supervision e da Organisation of Securities Commissions - evidência empírica no sector bancário português

Este estudo analisa o nível de divulgação sobre instrumentos derivados e seus factores determinantes nas entidades bancárias portuguesas. Para o efeito, foi utilizado um índice de divulgação, baseado nas recomendações emitidas pelo Basel Committee on Banking Supervision e pela Organisation of Securities Commissions, e analisados os Relatórios & Contas anuais, individuais, relativos a 2009. Conclui-se que o número de empresas que apresenta informação sobre a utilização de instrumentos derivados é bastante elevado, mas o valor médio de divulgação apresentado é bastante reduzido. Identificam-se, como factores determinantes do nível de divulgação, o tamanho da empresa, a qualidade do auditor externo e o facto de a empresa ter procedido a um aumento de capital durante o exercício económico em análise.

Grau de cumprimento com as recomendações do Basel Committee on Banking Supervision e da Organisation of Securities Commissions, sobre divulgação de informação relacionada com instrumentos derivados - evidência empírica no sector bancário português

This study analyzes the level of disclosure on derivatives, in accordance with the recommendations issued by the Basel Committee on Banking Supervision and the Organization of Securities Commission, by Portuguese banks. We have analyzed individual annual reports related to 2009, using a disclosure index based on those recommendations. We concluded that the number of companies that provides information about derivative instruments is quite high, but the average value of disclosure is very low. The information disclosed more frequently is that related to general aspects, followed by information related to accounting and valuation methods.

Estudo do grau de cumprimento com as recomendações do Basel Committee on Banking Supervision e da Organisation of Securities Commissions, sobre divulgação de informação relacionada com instrumentos derivados, pelas entidades portuguesas pertencentes ao sector bancário

Este estudo analisa o nível de divulgação sobre instrumentos derivados, de acordo com as recomendações emitidas pelo Basel Committee on Banking Supervision e pela Organisation of Securities Commissions, pelas entidades bancárias portuguesas. Para o efeito, foi utilizado um índice de divulgação e analisados os Relatórios & Contas anuais, individuais, relativos a 2009. Conclui-se que o número de empresas que apresenta informação sobre a utilização de instrumentos derivados é bastante elevado, mas o valor médio de divulgação apresentado é bastante reduzido. A informação mais divulgada é a relativa a informações gerais, seguida da informação relacionada com contabilidade e métodos de avaliação.