Predicting the past: Understanding the causes of bank distress in the Netherlands in the 1920s

Why do some banks fail in financial crises while others survive? This article answers this question by analysing the effect of the Dutch financial crisis of the 1920s on 142 banks, of which 33 failed. We find that choices of balance sheet composition and product market strategy made in the lead-up to the crisis had a significant impact on banks’ subsequent chances of experiencing distress. We document that high-risk banks – those operating highly-leveraged portfolios and attracting large quantities of deposits – were more likely to fail. Branching and international activities also increased banks’ default probabilities. We measure the effects of board interlocks, which have been characterized in the extant literature as contributing to the Dutch crisis. We find that boards mattered: failing banks had smaller boards, shared directors with smaller and very profitable banks and had a lower concentration of interlocking directorates in non-financial firms.

The rise of the digital citizen-stakeholder: rebalancing multistakeholder governance

The principle feature in the evolution of the internet has been its ever growing reach to include old and young, rich and poor. The internet’s ever encroaching presence has transported it from our desktop to our pocket and into our glasses. This is illustrated in the Internet Society Questionnaire on Multistakeholder Governance, which found the main factors affecting change in the Internet governance landscape were more users online from more countries and the influence of the internet over daily life. The omnipresence of the internet is self- perpetuating; its usefulness grows with every new user and every new piece of data uploaded. The advent of social media and the creation of a virtual presence for each of us, even when we are not physically present or ‘logged on’, means we are fast approaching the point where we are all connected, to everyone else, all the time. We have moved far beyond the point where governments can claim to represent our views which evolve constantly rather than being measured in electoral cycles.
The shift, which has seen citizens as creators of content rather than consumers of it, has undermined the centralist view of democracy and created an environment of wiki democracy or crowd sourced democracy. This is at the heart of what is generally known as Web 2.0, and widely considered to be a positive, democratising force. However, we argue, there are worrying elements here too. Government does not always deliver on the promise of the networked society as it involves citizens and others in the process of government. Also a number of key internet companies have emerged as powerful intermediaries harnessing the efforts of the many, and re- using and re-selling the products and data of content providers in the Web 2.0 environment. A discourse about openness and transparency has been offered as a democratising rationale but much of this masks an uneven relationship where the value of online activity flows not to the creators of content but to those who own the channels of communication and the metadata that they produce.
In this context the state is just one stakeholder in the mix of influencers and opinion formers impacting on our behaviours, and indeed our ideas of what is public. The question of what it means to create or own something, and how all these new relationships to be ordered and governed are subject to fundamental change. While government can often appear slow, unwieldy and even irrelevant in much of this context, there remains a need for some sort of political control to deal with the challenges that technology creates but cannot by itself control. In order for the internet to continue to evolve successfully both technically and socially it is critical that the multistakeholder nature of internet governance be understood and acknowledged, and perhaps to an extent, re- balanced. Stakeholders can no longer be classified in the broad headings of government, private sector and civil society, and their roles seen as some sort of benign and open co-production. Each user of the internet has a stake in its efficacy and each by their presence and participation is contributing to the experience, positive or negative of other users as well as to the commercial success or otherwise of various online service providers. However stakeholders have neither an equal role nor an equal share. The unequal relationship between the providers of content and those who simple package up and transmit that content - while harvesting the valuable data thus produced - needs to be addressed. Arguably this suggests a role for government that involves it moving beyond simply celebrating and facilitating the on- going technological revolution. This paper reviews the shifting landscape of stakeholders and their contribution to the efficacy of the internet. It will look to critically evaluate the primacy of the individual as the key stakeholder and their supposed developing empowerment within the ever growing sea of data. It also looks at the role of individuals in wider governance roles. Governments in a number of jurisdictions have sought to engage, consult or empower citizens through technology but in general these attempts have had little appeal. Citizens have been too busy engaging, consulting and empowering each other to pay much attention to what their governments are up to. George Orwell’s view of the future has not come to pass; in fact the internet has insured the opposite scenario has come to pass. There is no big brother but we are all looking over each other’s shoulder all the time, while at the same time a number of big corporations are capturing and selling all this collective endeavour back to us.

Electoral Systems, Ethnic Cleavages, and Experience with Democracy

Recent studies show the effects of electoral systems and ethnic cleavages on the number of parties in emerging democracies differ from those effects observed in more established democracies. Building on recent arguments maintaining the quality of democracy improves with experience, we argue the reason for the differences in the findings between established and emerging democracies is that the effects of these variables on the number of parties differ according to a country’s experience with elections. To test this argument, we analyse party system fragmentation in 89 established and emerging democracies and the conditioning effects experience with elections have on the effects of district magnitude, ethnic cleavages, and variables relating to the presidential party system. The results show the effects of institutional and social cleavage variables differ substantially between emerging and established democracies, but these effects begin to approximate those seen in more established democracies with additional experience with elections.

Perspectives on the Future of Public Private Partnership in the UK

During the past two decades the UK has played a leading position in the development and application of Public Private Partnership (PPP) based infrastructure procurement through its Private Finance Initiative model. This model had been developed during the last years of the Major Government and expanded during the early years of the Blair Government. The banking and economic crisis of 2007-09 has created major challenges to the use of PPP in the UK, making the sustainability of past levels of PPP investment and the future direction of PPP based infrastructure procurement in that country uncertain. This chapter summarises key developments in UK PPP up to the crisis; reviews the economic issues that have led up to the crisis; discusses the immediate impact of the crisis on the UK PFI and PPP market together with the transition arrangements that were put into to place by the Brown government; and, lastly, looks at recent initiatives taken by Cameron’s Conservative-Liberal Coalition Government under the designation of Private Finance 2 (PF2).

Recurrence of Philadelphia chromosome-positive leukemia in donor cells after bone marrow transplantation for chronic granulocytic leukemia

Allogeneic bone marrow transplantation has been shown to be a very effective therapy for Chronic Granulocytic Leukemia with long term disease free survivals in excess of 60%. Relapse rates remain low at 15% following histocompatible sibling transplants and lower rates following matched unrelated donor grafts. Relapse rates however, are higher if BMT is carried out in transformation or blast crisis. Leukemic relapse in donor cells following transplantation for CGL is a rare event. The occurrence of donor leukemia however, may be under reported as accurate and sensitive investigation of the origin of relapsed leukemia following BMT requires DNA based technologies. A possible mechanism of donor leukemia in CGL is transfection of donor cells with the chimeric gene which is unique to this disease. It is possible that the malignant cells found in transformed or blast crisis of CGL may have a greater potential to transfect donor haematopoietic material. Careful evaluation of the incidence of donor leukemia using molecular biology methods may elucidate the frequency of this event following BMT for CGL.

Portuguese Citizens’ Support for Democracy: 40 Years after the Carnation Revolution

Forty years after the Carnation Revolution, the relatively young Portuguese democracy is experiencing dramatically low levels of public specific support for democracy. This article tests the leverage of demand-side and supply-side accounts to explain differentials in public satisfaction with democracy. Through ordinary least squares regression analyses that draw on the unique data of the ‘Barometer 40 Years of Democracy in Portugal (2014)’, this articles shows that age cohort, identification with extreme parties, evaluation of the country’s political past, and economic performance are strong correlates of citizens’ specific support for democracy

Introduction: the impact of the 'War on Terror' on executive–legislative relations: a global perspective

In democratic polities, constitutional equilibria or balances of power between the executive and the legislature shift over time. Normative and empirical political theorists have long recognised that war, civil unrest, economic and political crises, terrorist attacks, and other events strengthen the power of the executive, disrupt and threaten constitutional politics, and damage democratic institutions: crises require swift action and executives are thought to be more capable than parliaments and legislatures of taking such actions. The terrorist attacks on New York and Washington on 11 September 2001 and the ensuing so-called 'war on terror' declared by President Bush clearly constituted a crisis, not only in the United States but also in other political systems, in part because of the US's hegemonic position in defining and shaping many other states' foreign and domestic policies. Dicey, Schmitt, and Rossiter suggest that critical events and political crises inevitably trigger the concentration of (emergency) powers in the hands of the executive. Aristotle and Machiavelli questioned the inevitability of this process. This article and the articles that follow in this Special Issue utilise empirical evidence, through the use of case studies of the United States, the United Kingdom, Russia, Australia, Israel, Italy and Indonesia, to address this debate. Specifically, the issue explores to what extent the external shock or crisis of 9/11 (and other terrorist attacks) and the ensuing 'war on terror' significantly changed the balance of executive-legislative relations from t (before the crisis) to t+1 (after the crisis) in these political systems, all of which were the targets of actual or foiled terrorist attacks. The most significant findings are that the shock of 9/11 and the 'war on terror' elicited varied responses by national executives and legislatures/parliaments and thus the balance of executive-legislative relations in different political systems; that, therefore, executive-legislative relations are positive rather than zero-sum; and that domestic political contexts conditioned these institutional responses.

Introduction: Guinea-Bissau Today - The Irrelevance of the State and the Permanence of Change

African Studies Review, Volume 52, Number 2, pp. 35–

Work ethic and the legacies of political regimes

This article studies the cross-country differences in work ethic and claims that different political regimes transmitted different work ethics that still persist today. Using the World Values Survey and starting our political regime analysis in 1900, we find that Democratic regimes promote more effectively work relevance and competitiveness than Autocratic and Anocratic regimes, and that the political regime history of the country is more important than the present level of democracy. Moreover, we prove that this differences were transmitted through generations by parents, who optimally choose what work ethic to transmit taking into account their own values.

A Legislator under Surveillance: The Creation and Implementation of Swiss Banking Legislation 1910-1934

This paper analyses how banking regulation was introduced in Switzerland - one of the world's most prominent financial centres - which remained in place until the beginning of the twenty-first century. It shows that the law adopted on 8 November 1934 is a perfect example of capture of the regulator by the regulated. Essentially a political response in the context of the economic crisis of the 1930s, it largely reflected the interests of banking circles by limiting the intervention of the State as much as possible. The introduction of the new legislation was facilitated by the temporary weakness of Swiss banking circles, as they depended on the State to delay or prevent the collapse of many major credit institutions. They did not manage to derail the law as they had two decades earlier when they scuppered the federal bill on banks drawn up between 1914 and 1916. But this time they were better organized and more united, and intervened all the more effectively in the legislative process itself. The 1934 law is thus distinctive in that it made no structural changes to the architecture of the financial centre but merely codified its practices through flexible legislation meant to reassure the public. The law was aimed less at controlling banking activity than at keeping - thanks to skilfully calibrated political concessions - the State from having to intervene more directly in the internal management of banks or in the fixing of interest rates and the export of capital.

Bringing Zombies Back to Life: An Autoethnographical Exploration of Alienation and Political Dis/Engagement in Emerging Adulthood Within Late-Stage Capitalism

In this thesis, by employing an autoethnographic methodology, I am exploring why certain understandings, or assemblages, of political engagement come to have greater meaning in my life and why other assemblages may be more hidden and thus fail to contribute substantially to the meaning of political in my life. Using immanent, Marxist and post-Marxist theories, as well as a zombie narrative, the study will contextualize the movement of assemblages in my life within late-stage capitalism which is juxtaposed with the zombie apocalypse. The placement and displacement of certain understandings of the political within my life will be theorized within the crisis of constituent power that is revealed in an immanent framework. Furthermore, the crisis of the constituent in late-stage capitalism creates new forms of radical alienation which will also be examined. By exploring my own struggles in becoming political I will theorize why political disengagement in emerging adulthood appears to be increasing, as well as possibilities for new forms of political engagement in a late-stage capitalist context.

The Myth of Demonetarization of Gold

The aim of this paper is to discuss the crisis of the international financial system and the necessity of reforming it by new anchor or benchmark for the international currency, a money-commodity. The need for understanding the definition of a numéraire is a first necessity. Although most economists reject any connection between money and a particular commodity (gold) – because of the existence of legal tender money in every country – it will be shown that it is equivalent to reduce the real space to an abstract number (usually assumed 1) in order to postulate that money is neutral. This is sheer nonsense. It will also be shown that the concept of fiat money or state money does not preclude the existence of commodity money. This paper is divided in four sections. The first section analyses the definition and meaning of a numéraire for the international currency and the justification for a variable standard of value. In the second section, the market value of the US dollar is analysed by looking at new forms of value -the derivative products- the dollar as a safe haven, and the role of SDRs in reforming the international monetary system. In the third and fourth sections, empirical evidence concerning the most recent period of the financial crisis is presented and an econometric model is specified to fit those data. After estimating many different specifications of the model –linear stepwise regression, simultaneous regression with GMM estimator, error correction model- the main econometric result is that there is a one to one correspondence between the price of gold and the value of the US dollar. Indeed, the variance of the price of gold is mainly explained by the Euro exchange rate defined with respect to the US dollar, the inflation rate and negatively influenced by the Dow Jones index and the interest rate.

Choosing the Lesser of Two Evils: Explaining Multinational Banking Groups’ Push for Supranational Oversight in the EU

European Union Series

Financial crisis: theory and practice

In the last 50 years, we have had approximately 40 events with characteristics related to financial crisis. The most severe crisis was in 1929, when the financial markets plummet and the US gross domestic product decline in more than 30 percent. Recently some years ago, a new crisis developed in the United States, but instantly caused consequences and effects in the rest of the world. This new economic and financial crisis has increased the interest and motivation for the academic community, professors and researchers, to understand the causes and effects of the crisis, to learn from it. This is the one of the main reasons for the compilation of this book, which begins with a meeting of a group of IAFI researchers from the University of Barcelona, where researchers form Mexico and Spain, explain causes and consequences of the crisis of 2007. For that reason, we believed this set of chapters related to methodologies, applications and theories, would conveniently explained the characteristics and events of the past and future financial crisis This book consists in 3 main sections, the first one called "State of the Art and current situation", the second named "Econometric applications to estimate crisis time periods" , and the third one "Solutions to diminish the effects of the crisis". The first section explains the current point of view of many research papers related to financial crisis, it has 2 chapters. In the first one, it describe and analyzes the models that historically have been used to explain financial crisis, furthermore, it proposes to used alternative methodologies such as Fuzzy Cognitive Maps. On the other hand , Chapter 2 , explains the characteristics and details of the 2007 crisis from the US perspective and its comparison to 1929 crisis, presenting some effects in Mexico and Latin America. The second section presents two econometric applications to estimate possible crisis periods. For this matter, Chapter 3, studies 3 Latin-American countries: Argentina, Brazil and Peru in the 1994 crisis and estimates the multifractal characteristics to identify financial and economic distress. Chapter 4 explains the crisis situations in Argentina (2001), Mexico (1994) and the recent one in the United States (2007) and its effects in other countries through a financial series methodology related to the stock market. The last section shows an alternative to prevent the effects of the crisis. The first chapter explains the financial stability effects through the financial system regulation and some globalization standards. Chapter 6, study the benefits of the Investor activism and a way to protect personal and national wealth to face the financial crisis risks.