An overall perspective on banking regulation

We survey the theory of banking regulation from the general perspectiveof regulatory theory. Starting by considering the different justificationsof financial intermediation, we proceed to identify the market failuresthat make banking regulation necessary. We then succinctly compare how theanalysis of regulation compares in the domains of banking and industrialorganization. Finally we analyse why a safety net for banks could be partof banking regulation and how it can be structured in an efficient way.

Role and regulation of polyphosphate in leishmania parasites

Le protozoaire unicellulaire Leishmania est l'agent responsable de la leishmaniose, une maladie parasitaire humaine qui se manifeste par des lésions de la peau, se résolvant le plus souvent spontanément, jusqu'à des lésions viscérales fatales. Le parasite est transmis de l'insecte à l'hôte mammifère lors d'un repas sanguin de la mouche des sables et y réside respectivement sous formes extra- et intracellulaires. On estime que cette maladie touche environ 12 millions de personnes dans 98 pays. Etant donné que les médicaments disponibles à ce jour sont faiblement efficaces et/ou hautement toxiques, il est indispensable de consolider les connaissances sur le fonctionnement et la survie du parasite pour pouvoir développer de nouvelles stratégies de traitements et de préventions. Tous les organismes vivants, dont Leishmania, contiennent du polyphopshate (polyP). Cette molécule chargée négativement est constituée de trois jusqu'à plusieurs centaines de résidus de phosphates reliées par des liaisons à haute énergie. Le polyP sert donc de source d'énergie et de réservoir de phosphate; dans certaines espèces, il joue aussi un rôle dans l'adaptation au stress et la virulence de pathogènes. Ceci nous a amené à étudier le rôle du polyP dans le parasite Leishmania. L'enzyme responsable de la synthèse de polyP a été identifié récemment dans la levure : il s'agit de la chaperone de transport vacuolaire 4 (Vtc4). Nous avons identifié un homologue de Vtc4 chez les Trypanosomatidae, et avons donc décidé d'examiner sa fonction dans le métabolisme du polyP chez Leishmania. En éliminant l'expression de Vtc4 chez L. major et L. guyanensis, nous avons pu démontrer qu'il est indispensable pour la production de polyP chez Leishmania. De plus, nous avons constaté que ces parasites possèdent des chaînes de polyP allant de trois jusqu'à environ 300 résidus de phosphate. Le taux de polyP dans la cellule est précisément régulé et varie entre un très haut niveau durant la phase proliférative des promastigotes à un niveau bas en phase stationnaire tardive, alors que l'expression de Vtc4p reste stable. Dans les amastigotes intracellulaires, seulement des petites quantités de polyP et de Vtc4p sont détectées. En outre, l'absence de Vc4p et de polyP n'a pas d'effet significatif sur les infections in vivo de souris, ce qui indique que le polyP n'est pas nécessaire au développement de la leishmaniose. Ceci suggère que Vtc4p n 'est pas une bonne cible pour le développement de nouveaux traitements contre Leishmania. "Néanmoins, la présence du polyP favorise fortement la survie du parasite suite à un choc de température (37°C) et aide ainsi à sa persistance intracellulaire pendant les premiers jours d'infection de macrophages. En résumé, nos résultats indiquent que si le polyP a peu d'importance pendant l'infection et le développement de la leishmaniose chez la souris, il est par contre crucial pour l'adaptation à des situations de stress comme l'augmentation de la température. Le fait que le polyP a été conservé dans tous les organismes durant l'évolution suggère toutefois que cette molécule joue un rôle fondamental. Etant donné que l'absence de polyP n'a pas d'effet sur la survie des amastigotes, il pourrait être plus important dans la forme promastigote infectant la mouche des sables. - The unicellular protozoan parasite Leishmania is the causative agent of the human disease leishmaniasis, which can range from self-healing skin lesions to fatal visceral lesions. The parasite is transmitted from the insect vector to the mammalian host when the sand fly takes its blood meal and exists in an extra- and an intracellular form, respectively. The disease is estimated to affect 12 million people in 98 countries and currently available drug treatments are of relatively low potency and/or high toxicity. Thus, investigating parasite survival mechanisms and parasite adaptation to the two host environments contributes to the general understanding of Leishmania propagation and might therefore help to develop future treatments or preventions. All living cells, including Leishmania, contain a negatively charged polymer of a few up to several hundred phosphate residues. These so-called polyphosphates (polyPs) serve as an energy source and phosphate reservoir. In some organisms, polyP is also involved in adaptation to stresses and virulence of pathogens. Therefore we were interested in investigating the importance of polyP in Leishmania parasites. Recently, an eukaryotic enzyme responsible for polyP synthesis has been identified as the vacuolar transporter chaperone 4 (Vtc4) in yeast. We, and others, found a Vtc4 homologue in trypanosomatids and decided to examine its potential function in polyP metabolism. By generating VTC4 knock-out cell lines in L. major and Vtc4 knock-down cell lines in L. guyanensis, we were able to demonstrate that Vtc4p is responsible for the total amount of cellular polyP. We also observed that Leishmania polyP chain length ranges from a few up to around 300 residues and that its level is tightly regulated. PolyP abundance is highest during the logarithmic proliferating phase of promastigotes and decreases in the stationary phase, while Vtc4 protein expression remains stable during both phases. In the intracellular amastigote form, only low amounts of polyP and Vtc4p were detectable. Furthermore, absence of Vtc4p and polyP did not have a significant effect on in vivo mouse infections, indicating that polyP is not necessary for Leishmania disease progression. This suggests that Vtc4p would be a poor drug target against Leishmania infection. However, presence of the polymer strongly supported parasite survival during heat shock (37°C) and thereby promoted intracellular persistence during the first days of macrophage infections. Taken together, we found that polyP has little importance in Leishmania {in vivo) infection but that it plays a crucial role during adaptation to stress, such as heat shock. Given that polyP has been preciously conserved in all organisms during evolution it seems to play a fundamental role. Since absence of polyP does not affect amastigote survival, it might be significant for promastigote existence in the sand fly vector.

Entry regulation and intersectoral reallocation

We study how restrictions on firm entry affect intersectoral factor reallocation when openeconomies experience global economic shocks. In our theoretical framework, countries trade freelyin a range of differentiated sectors that are subject to country-specific and global shocks. Entryrestrictions are modeled as an upper bound on the introduction of new differentiated goods followingshocks. Prices and quantities adjust to clear international goods markets, and wages adjustto clear national labor markets. We show that in general equilibrium, countries with tighter entryrestrictions see less factor reallocation compared to the frictionless benchmark. In our empiricalwork, we compare sectoral employment reallocation across countries in the 1980s and 1990s withproxies for frictionless benchmark reallocation. Our results indicate that the gap between actualand frictionless reallocation is greater in countries where it takes longer to start a firm.

Eotaxin-1 (CCL11) up-regulation in tears during seasonal allergic conjunctivitis.

PURPOSE: To compare in-season eotaxin-1 levels in tears of patients suffering from seasonal allergic conjunctivitis (SAC) with (1) tears of normal subjects and (2) tears of SAC patients out of season. METHODS: Tears of 11 SAC patients and six control volunteers were collected during the pollen season. Tears of five SAC patients showing a strong sensitivity to grass pollen (skin-prick tests and specific serum IgE) were collected both in season and out of season. ELISA measured eotaxin-1 level. RESULTS: Eotaxin-1 concentration in tears of SAC patients [2,100+/-503 (SEM) pg/ml] and normal subjects (1,193+/-176 pg/ml) were significantly different (P=0.0049). Regarding allergic patients, the clinical score (sum of five allergic criteria) was significantly different in season and out of season (P=0.0043) as was also the case with eotaxin-1 concentration (P=0.024). CONCLUSIONS: The eotaxin-1 concentration in tears of patients showing hay fever could confirm a diagnosis of seasonal ocular allergy.

Regulation of inflammasome activity.

Summary Interleukin-1beta (IL-1beta) is a potent inflammatory cytokine, which is implicated in acute and chronic inflammatory disorders. The activity of IL-1beta is regulated by the proteolytic cleavage of its inactive precursor resulting in the mature, bioactive form of the cytokine. Cleavage of the IL-1beta precursor is performed by the cysteine protease caspase-1, which is activated within protein complexes termed 'inflammasomes'. To date, four distinct inflammasomes have been described, based on different core receptors capable of initiating complex formation. Both the host and invading pathogens need to control IL-1beta production and this can be achieved by regulating inflammasome activity. However, we have, as yet, little understanding of the mechanisms of this regulation. In particular the negative feedbacks, which are critical for the host to limit collateral damage of the inflammatory response, remain largely unexplored. Recent exciting findings in this field have given us an insight into the potential of this research area in terms of opening up new therapeutic avenues for inflammatory disorders.

Regulation and opportunism: How much activism do we need?

This paper analyzes the current trend towards firms self-regulation as opposed to the formal regulation of a negative externality. Firms respond to increasing activism in the market(conscious consumers that take into account the external effects of their purchase) by providing more socially responsible goods. However, because regulation is the outcome of a political process, an increase in activism might imply an inefficiently higher externality level. This may happen when a majority of non-activist consumers collectively free-ride on conscious consumers. By determining a softer than optimal regulation, they benefit from the behavior of firms, yet they have access to cheaper (although less efficient) goods.

Regulation of catecholamine release and tyrosine hydroxylase in human adrenal chromaffin cells by interleukin-1beta: role of neuropeptide Y and nitric oxide.

Adrenal chromaffin cells synthesize and secrete catecholamines and neuropeptides that may regulate hormonal and paracrine signaling in stress and also during inflammation. The aim of our work was to study the role of the cytokine interleukin-1beta (IL-1beta) on catecholamine release and synthesis from primary cell cultures of human adrenal chromaffin cells. The effect of IL-1beta on neuropeptide Y (NPY) release and the intracellular pathways involved in catecholamine release evoked by IL-1beta and NPY were also investigated. We observed that IL-1beta increases the release of NPY, norepinephrine (NE), and epinephrine (EP) from human chromaffin cells. Moreover, the immunoneutralization of released NPY inhibits catecholamine release evoked by IL-1beta. Moreover, IL-1beta regulates catecholamine synthesis as the inhibition of tyrosine hydroxylase decreases IL-1beta-evoked catecholamine release and the cytokine induces tyrosine hydroxylase Ser40 phosphorylation. Moreover, IL-1beta induces catecholamine release by a mitogen-activated protein kinase (MAPK)-dependent mechanism, and by nitric oxide synthase activation. Furthermore, MAPK, protein kinase C (PKC), protein kinase A (PKA), and nitric oxide (NO) production are involved in catecholamine release evoked by NPY. Using human chromaffin cells, our data suggest that IL-1beta, NPY, and nitric oxide (NO) may contribute to a regulatory loop between the immune and the adrenal systems, and this is relevant in pathological conditions such as infection, trauma, stress, or in hypertension.

Asymmetric effects of monetary policy in the US: Positive vs. negative or big vs. small?

This paper reconsiders the empirical evidence on the asymmetricoutput effects of monetary policy. Asymmetric effects is a common feature ofmany theoretical models, and there are many different versions of suchasymmetries. We concentrate on the distinctions between positive andnegative money-supply changes, big and small changes in money-supply, andpossible combinations of the two asymmetries. Earlier research has foundempirical evidence in favor of the former of these in US data. Using M1 asthe monetary variable we find evidence in favor of neutrality of big shocksand non-neutrality of small shocks. The results may, however, be affected bystructual instability of M1 demand. Thus, we substitute M1 with the federalfunds rate. In these data we find that only small negative shocks affectreal aggregate activity. The results are interpreted in terms of menu-costmodels.

Optimal regulation of a fully insured deposit banking system

We analyze risk sensitive incentive compatible deposit insurancein the presence of private information when the market value of depositinsurance can be determined using Merton's (1997) formula. We show that,under the assumption that transferring funds from taxpayers to financialinstitutions has a social cost, the optimal regulation combines differentlevels of capital requirements combined with decreasing premia on depositinsurance. On the other hand, it is never efficient to require the banksto hold riskless assets, so that narrow banking is not efficient. Finally,chartering banks is necessary in order to decrease the cost of asymmetricinformation.

Designing institutions for financial stability: Regulation and supervision by objective for the Euro area

In this paper, we discuss pros and cons ofdifferent models for financial market regulationand supervision and we present a proposal forthe re-organisation of regulatory and supervisoryagencies in the Euro Area. Our arguments areconsistent with both new theories and effectivebehaviour of financial intermediaries inindustrialized countries. Our proposed architecturefor financial market regulation is based on theassignment of different objectives or "finalities"to different authorities, both at the domesticand the European level. According to thisperspective, the three objectives of supervision- microeconomic stability, investor protectionand proper behaviour, efficiency and competition- should be assigned to three distinct Europeanauthorities, each one at the centre of a Europeansystem of financial regulators and supervisorsspecialized in overseeing the entire financialmarket with respect to a single regulatoryobjective and regardless of the subjective natureof the intermediaries. Each system should bestructured and organized similarly to the EuropeanSystem of Central Banks and work in connectionwith the central bank which would remain theinstitution responsible for price and macroeconomicstability. We suggest a plausible path to buildour 4-peak regulatory architecture in the Euro area.

Regulation of the expression of Fit insect toxin locus genes in the root-associated biocontrol pseudomonad CHA0

The root-colonizing Pseudomonas fluorescens strain CHA0 is a biocontrol agent of soil-borne plant diseases caused by fungal and oomycete pathogens. Remarkably, this plant-beneficial pseudomonad is also endowed with potent insecticidal activity that depends on the production of a large protein toxin termed Fit (for P. fluorescens insecticidal toxin). In our present work, the genomic locus encoding the P. fluorescens insect toxin is subjected to a detailed molecular analysis. The Fit toxin gene fitD is flanked upstream by the fitABC genes and downstream by the fitE gene that encode the ABC transporter, membrane fusion, and outer membrane efflux components of a type I protein secretion system predicted to function in toxin export. The fitF, fitG, and fitH genes located downstream of fitE code for regulatory proteins having domain structures typical of signal transduction histidine kinases, LysR-type transcriptional regulators, and response regulators, respectively. The role of these insect toxin locus-associated control elements is being investigated with mutants defective for the regulatory genes and with GFP-based reporter fusions to putative promoter regions upstream of the transporter genes fitA and fitE, the toxin gene fitD, and the regulatory genes fitF and fitH. Our preliminary findings suggest that the three regulators interact with known global regulators of biocontrol factor expression to control Fit toxin expression and secretion.

Quality safeguards and regulation of online pharmacies

Using econometric evidence, this article confirms that distribution ofmedicines online is split into two market segments of very diversequality, and identifies the factors that drive quality and qualityassurance in this activity. Unlike fraudulent, rogue, websites, whichoffer scant guarantees and usually sell just a few medicines withoutprescription, online pharmacies offering insurance coverage and linkedto conventional pharmacies typically sell a wholerange of drugs, require third-party medical prescriptions and provideabundant information to patients. It is shown that, where onlinepharmacies are allowed to act legally, market forces enhance quality,as private insurers require professional standards, and specialized thirdparties make a business of certifying them. Furthermore, older onlinepharmacies and those running conventional operations offer higherquality, probably because of reputational investments. Overall, this evidence supports licensing online pharmacies, especiallyconsidering that prohibiting them is ineffective against fraudulent sites.

Full insurance, asymmetric information and genetic testing

This paper extends previous resuls on optimal insurance trading in the presence of a stock market that allows continuous asset trading and substantial personal heterogeneity, and applies those results in a context of asymmetric informationwith references to the role of genetic testing in insurance markets.We find a novel and surprising result under symmetric information:agents may optimally prefer to purchase full insurance despitethe presence of unfairly priced insurance contracts, and other assets which are correlated with insurance.Asymmetric information has a Hirschleifer-type effect whichcan be solved by suspending insurance trading. Nevertheless,agents can attain their first best allocations, which suggeststhat the practice of restricting insurance not to be contingenton genetic tests can be efficient.

Research joint ventures and optimal R&D policy with asymmetric information

When to allow Research Joint Ventures (RJVs) or not is an importantinstrument in the development of an optimal R&D policy. Theregulator, however, is unlikely to know all the relevant informationto regulate R&D optimally. The extent to which there existappropriability problems between the firms is one such variable thatis private information to the firms in the industry. In a duopolysetting we analyze the characteristics of a second-best R&D policywhere the government can either allow RJVs or not and give lump-sumsubsidies to the parties involved. The second-best R&D policy withoutsubsidies will either block some welfare improving RJVs or allow somewelfare reducing ones. With lump-sum subsidies, the second-best policytrades off the expected subsidy cost with allowing welfare decreasingRJVs or blocking welfare increasing ones.

Corporate finance and the monetary transmission mechanism

This paper analyzes the transmission mechanisms of monetarypolicy in a general equilibrium model of securities marketsand banking with asymmetric information. Banks' optimal asset/liability policy is such that in equilibrium capital adequacy constraints are always binding. Asymmetric information about banks' net worth adds a cost to outside equity capital, which limits the extent to which banks can relax their capital constraint. In this context monetarypolicy does not affect bank lending through changes in bank liquidity. Rather, it has the effect of changing theaggregate composition of financing by firms. The model also produces multiple equilibria, one of which displays all the features of a "credit crunch". Thus, monetary policy can also have large effects when it induces a shift from one equilibrium to the other.