Iowa Department of Commerce - Credit Union Division, Agency Performance Plan, 2007

Annual Report, Agency Performance Plan

Health risk behaviors in adolescents with chronic conditions

OBJECTIVE: The objective of this study was to compare the frequency of risk behaviors and to measure the extent of co-occurrence of these behaviors in chronically ill and healthy adolescents. METHODS: Data were drawn from the 2002 Swiss Multicenter Adolescent Survey on Health database, a nationally representative survey of 7548 adolescents in postmandatory school aged 16 to 20 years. There were 760 subjects who reported a chronic illness and/or a disability. The comparison group consisted of 6493 subjects who answered negatively to both questions. We defined 8 risk behaviors: daily smoking, alcohol misuse, current cannabis use, current use of any other illegal drug, early sexual debut, eating disorder, violent acts, and antisocial acts. We analyzed each behavior and the sum of behaviors, controlling for age, gender, academic track, parents' education level, depression, and health status. Results are given as adjusted odds ratios using the comparison group as the reference category. RESULTS: Youth with a chronic condition were more likely to smoke daily, to be current cannabis users, and to have performed violent or antisocial acts. Youth with a chronic condition were also more likely to report 3 or >or=4 risk behaviors. CONCLUSIONS: These results indicate that having a chronic condition carries additional risks for engaging in health risk behaviors and emphasize the importance of health risk screening and preventive counseling for young people in general and among those suffering from chronic conditions in particular.

Credit card debt puzzles

Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an 'accountant-shopper'framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework canactually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers.

The credit ratings game

The spectacular failure of top-rated structured finance products has broughtrenewed attention to the conflicts of interest of Credit Rating Agencies (CRAs). We modelboth the CRA conflict of understating credit risk to attract more business, and the issuerconflict of purchasing only the most favorable ratings (issuer shopping), and examine theeffectiveness of a number of proposed regulatory solutions of CRAs. We find that CRAs aremore prone to inflate ratings when there is a larger fraction of naive investors in the marketwho take ratings at face value, or when CRA expected reputation costs are lower. To theextent that in booms the fraction of naive investors is higher, and the reputation risk forCRAs of getting caught understating credit risk is lower, our model predicts that CRAs aremore likely to understate credit risk in booms than in recessions. We also show that, due toissuer shopping, competition among CRAs in a duopoly is less efficient (conditional on thesame equilibrium CRA rating policy) than having a monopoly CRA, in terms of both totalex-ante surplus and investor surplus. Allowing tranching decreases total surplus further.We argue that regulatory intervention requiring upfront payments for rating services (beforeCRAs propose a rating to the issuer) combined with mandatory disclosure of any ratingproduced by CRAs can substantially mitigate the con.icts of interest of both CRAs andissuers.

Macroprudential policy, countercyclical bank capital buffers and credit supply: Evidence from the Spanish dynamic provisioning experiments

We analyze the impact of countercyclical capital buffers held by banks on the supplyof credit to firms and their subsequent performance. Spain introduced dynamicprovisioning unrelated to specific bank loan losses in 2000 and modified its formulaparameters in 2005 and 2008. In each case, individual banks were impacteddifferently. The resultant bank-specific shocks to capital buffers, coupled withcomprehensive bank-, firm-, loan-, and loan application-level data, allow us toidentify its impact on the supply of credit and on real activity. Our estimates showthat countercyclical dynamic provisioning smooths cycles in the supply of credit andin bad times upholds firm financing and performance.

Credit lines: The other side of corporate liquidity

In this paper we offer the first large sample evidence on the availability and usage ofcredit lines in U.S. public corporations and use it to re-examine the existing findings oncorporate liquidity. We show that the availability of credit lines is widespread and thataverage undrawn credit is of the same order of magnitude as cash holdings. We test thetrade-off theory of liquidity according to which firms target an optimum level of liquidity,computed as the sum of cash and undrawn credit lines. We provide support for the existenceof a liquidity target, but also show that the reasons why firms hold cash and credit linesare very different. While the precautionary motive explains well cash holdings, the optimumlevel of credit lines appears to be driven by the restrictions imposed by the credit line itself,in terms of stated purpose and covenants. In support to these findings, credit line drawdownsare associated with capital expenditures, acquisitions, and working capital.

Endogenous credit cycles

I develop an overlapping-generations framework in which changes in lending standards generateendogenous cycles. In my economy, entrepreneurs who are privately informed about thequality of their projects need to borrow funds. Intermediaries screen entrepreneurs both throughthe amount of investment undertaken and through the level of entrepreneurial net worth.I show that endogenous regime switches in financial contracts from pooling to separatingand vice-versa may generate fluctuations even in the absence of exogenous shocks. Whenthe economy is in the pooling (separating) regime, lending standards seem lax ( tight ) andinvestment is high (low). Differently from the existing literature, my model does not requireentrepreneurial net worth to be counter cyclycal or inconsequential for determining aggregateinvestment.

Relative and absolute reliability of the clinical version of the Narrow Path Walking Test (NPWT) under single and dual task conditions.

Decline in gait stability has been associated with increased fall risk in older adults. Reliable and clinically feasible methods of gait instability assessment are needed. This study evaluated the relative and absolute reliability and concurrent validity of the testing procedure of the clinical version of the Narrow Path Walking Test (NPWT) under single task (ST) and dual task (DT) conditions. Thirty independent community-dwelling older adults (65-87 years) were tested twice. Participants were instructed to walk within the 6-m narrow path without stepping out. Trial time, number of steps, trial velocity, number of step errors, and number of cognitive task errors were determined. Intraclass correlation coefficients (ICCs) were calculated as indices of agreement, and a graphic approach called "mountain plot" was applied to help interpret the direction and magnitude of disagreements between testing procedures. Smallest detectable change and smallest real difference (SRD) were computed to determine clinically relevant improvement at group and individual levels, respectively. Concurrent validity was assessed using Performance Oriented Mobility Assessment Tool (POMA) and the Short Physical Performance Battery (SPPB). Test-retest agreement (ICC1,2) varied from 0.77 to 0.92 in ST and from 0.78 to 0.92 in DT conditions, with no apparent systematic differences between testing procedures demonstrated by the mountain plot graphs. Smallest detectable change and smallest real change were small for motor task performance and larger for cognitive errors. Significant correlations were observed for trial velocity and trial time with POMA and SPPB. The present results indicate that the NPWT testing procedure is highly reliable and reproducible.

Boundedly rational credit cycles

We propose an evolutionary model of a credit market. We show that theeconomy exhibits credit cycles. The model predicts dynamics which are consistent with some evidence about the Great Depression. Real shocks triggerepisodes of credit--crunch which are observed in the process of adjustmenttowards the post shock equilibrium.

Credit constraints in general equilibrium: Experimental results

Our work attempts to investigate the influence of credit tightness orexpansion on activity and relative prices in a multimarket set-up. We report on somedouble- auction, two-market experiments where subjects had to satisfy an inequalityinvolving the use of credit. The experiments display two regimes, characterizedby high and low credit availability. The critical value of credit at the commonboundary of the two regimes has a compelling interpretation as the maximal credituse at the Arrow-Debreu equilibrium of the abstract economy naturally associatedto our experimental environment. Our main results are that changes in theavailability of credit: (a): have minor and unsystematic effects on quantitiesand relative prices in the high-credit regime, (b): have substantial effects, bothon quantities and relative prices, in the low-credit regime.

Interbank liquidity crunch and the firm credit crunch: Evidence from the 2007-2009 crisis

We study the credit supply effects of the unexpected freeze of the Europeaninterbank market, using exhaustive Portuguese loan-level data. We find thatbanks that rely more on interbank borrowing before the crisis decrease theircredit supply more during the crisis. The credit supply reduction is stronger forfirms that are smaller, with weaker banking relationships. Small firms cannotcompensate the credit crunch with other sources of debt. Furthermore, theimpact of illiquidity on the credit crunch is stronger for less solvent banks.Finally, there are no overall positive effects of central bank liquidity, but higherhoarding of liquidity.

Influence of male nutritional conditions on the performance and alimentary selection of wild females of Anastrepha obliqua (Macquart)(Diptera, Tephritidae)

Influence of male nutritional conditions on the performance and alimentary selection of wild females of Anastrepha obliqua (Macquart) (Diptera, Tephritidae). The behavior of A. obliqua females is regulated by endogenous and exogenous factors and among these the presence of males. Experiments were carried out to investigate whether the presence of males and their nutritional condition may affect the behavior of self-selection feeding and the performance of A. obliqua females. Females were sorted in groups containing yeast-deprived females and males, and non-yeast-deprived females and males. The females were maintained apart from the males by a transparent plastic screen. Several yeast and sucrose combinations were offered to the females in a single diet block or in separate blocks. Ingestion, egg production, longevity and diet efficiency were determined. The non-yeast-deprived males positively influenced the females performance when the latter were fed with yeast and sucrose in distinct diet blocks. Performance was better in the groups without males and with yeast-deprived males where the females could not select the nutrient proportions (yeast and sucrose in a single diet block).