Banking crises: The impact of financial liberalization

This paper intends to study whether financial liberalization tends to increase the likelihood of systemic banking crises. I used a sample of 79 countries with data spanning from 1973 to 2005 to run a panel probit model. I found that, if anything, financial liberalization as measured across seven different dimensions tends to decrease the probability of occurrence of a systemic banking crisis. I went further and did several robustness tests – used a conditional probit model, tested for different durations of liberalization impact and reduced the sample by considering only the first crisis event for each country. Main results still verified, proving the results’ robustness.

Financial depth, stock markets and economic growth in the EU-15 countries

The aim of this paper is to assess the impact of financial depth on economic growth in the EU-15 countries from 1970 until 2012, using the two-step System GMM estimator. Even though it might be expected a positive impact, the results show it is negative and sometimes even negative and statistically significant. Among the reasons presented for this, the existence of banking crises seems to better explain these results. In tranquil periods, financial deepening appears to have a positive impact, whereas in banking crises it is persistently negative and statistically significant. Also, after an assessment of the impact of stock markets on economic growth, it appears that more developed countries in the EU-15 have an economy more reliant on this segment of the financial system rather than in bank intermediation.

Graph usage in financial reports: Evidence from Portuguese listed companies

When assessing investment options, investors focus on the graphs of annual reports, despite lack of auditing. If poorly constructed, graphs distort perceptions and lead to inaccurate decisions. This study examines graph usage in all the companies listed on Euronext Lisbon in 2013. The findings suggest that graphs are common in the annual reports of Portuguese companies and that, while there is no evidence of Selectivity Distortion, both Measurement and Orientation Distortions are pervasive. The study recommends the auditing of financial graphs, and urges preparers and users of annual reports to be wary of the possibility of graph distortion.

Reporting Income Taxes in the Banking Sector In Angola - Accounting, Tax Regulation and Financial Reporting Evidences

This research provides an insight into income taxes reporting in Angola, based on hand collected data from the annual reports of banks. Empirical studies on Angolan companies are scarce, in part due to the limited access to data. The results show that income taxes’ reporting has improved over the years 2010-2013, becoming more reliable and understandable. The Angolan Government is boosting the economic growth through tax benefits in the investment in public debt, which cause a reduction in the banks’ effective tax rate. The new income tax law will reduce the statutory tax rate from 2015 onwards and change the taxable income, resulting in shifting the focus to promoting private investment.

Why aren't brand names regognized as intangible assets in the financial Statements? A study of the subjectivity of brand valuation

The goal of this paper is to determine and to quantify how subjective brand valuation is. To do so, we review the different valuation methods and apply the Hirose model to a sample of 20 US companies from the technology sector. Even if the results vary in function of the rankings we choose as a comparison, we may identify the trend that brands are usually overvalued in those rankings. It explains why internally generated goodwill (which includes brand names) is not recognized as an intangible asset in the financial statements.

Smart machines in day-to-day financial management:

Starting from Novabase’s challenge to launch in the UK Millennials a personal financial advisor mobile application, this work project aims to build a planning model to frame a business side of a launch strategy for mobile application in similar market and category. This study culminates on the design of SPOSTAC planning model. The created framework is intended to effectively and efficiently plan a launch strategy, being structured based on seven sequential elements: Situation, Product, Objectives, Strategy, Tactics, Action, and Control.

`When I'm sixty-four': old age, family values, and private financial transfers

Private financial transfers are becoming more and more important as ageing levels increase in Europe, with elders acting as both givers and receivers. Our study is divided in two main parts. In the first part we analyse the determinants of private financial transfers, using the Survey of Health, Ageing, and Retirement in Europe (SHARE). In the second part we analyse the importance of family values for these transfers, combining SHARE with European Values Study. We show that family functions as the main agent of private transfers. We conclude that family values drive financial transfers, mainly gifts provided by elderly individuals. We find that receipts by old-aged people are more related with need cases, such as illness and poorness; moreover, for these particular cases, family network plays a very important role, working as a safety net.

Banco BPI SA financial institutions

Equity research report

Transparency in financial reporting by European Foundations

The increasing role of the European Foundations, urges for more transparency. The prevalent accounting frameworks in which they operate and report their activities are mostly based on national laws. This lack of harmonization, limits comparison between European foundations. Thus, this Work Project analyzes the current financial reporting by European foundations, and evaluates the similarities, differences and data availability between countries. The research provides evidence about little information available, deficiency in the financial reporting, within and between countries. The research recommends the need to ensure uniformity by providing a clear definition for public-benefit purpose, harmonization of laws and financial reporting.

Biomedical risk assessment as an aid for smoking cessation.

BACKGROUND: A possible strategy for increasing smoking cessation rates could be to provide smokers who have contact with healthcare systems with feedback on the biomedical or potential future effects of smoking, e.g. measurement of exhaled carbon monoxide (CO), lung function, or genetic susceptibility to lung cancer. OBJECTIVES: To determine the efficacy of biomedical risk assessment provided in addition to various levels of counselling, as a contributing aid to smoking cessation. SEARCH STRATEGY: We systematically searched the Cochrane Collaboration Tobacco Addiction Group Specialized Register, Cochrane Central Register of Controlled Trials 2008 Issue 4, MEDLINE (1966 to January 2009), and EMBASE (1980 to January 2009). We combined methodological terms with terms related to smoking cessation counselling and biomedical measurements. SELECTION CRITERIA: Inclusion criteria were: a randomized controlled trial design; subjects participating in smoking cessation interventions; interventions based on a biomedical test to increase motivation to quit; control groups receiving all other components of intervention; an outcome of smoking cessation rate at least six months after the start of the intervention. DATA COLLECTION AND ANALYSIS: Two assessors independently conducted data extraction on each paper, with disagreements resolved by consensus. Results were expressed as a relative risk (RR) for smoking cessation with 95% confidence intervals (CI). Where appropriate a pooled effect was estimated using a Mantel-Haenszel fixed effect method. MAIN RESULTS: We included eleven trials using a variety of biomedical tests. Two pairs of trials had sufficiently similar recruitment, setting and interventions to calculate a pooled effect; there was no evidence that CO measurement in primary care (RR 1.06, 95% CI 0.85 to 1.32) or spirometry in primary care (RR 1.18, 95% CI 0.77 to 1.81) increased cessation rates. We did not pool the other seven trials. One trial in primary care detected a significant benefit of lung age feedback after spirometry (RR 2.12; 95% CI 1.24 to 3.62). One trial that used ultrasonography of carotid and femoral arteries and photographs of plaques detected a benefit (RR 2.77; 95% CI 1.04 to 7.41) but enrolled a population of light smokers. Five trials failed to detect evidence of a significant effect. One of these tested CO feedback alone and CO + genetic susceptibility as two different intervention; none of the three possible comparisons detected significant effects. Three others used a combination of CO and spirometry feedback in different settings, and one tested for a genetic marker. AUTHORS' CONCLUSIONS: There is little evidence about the effects of most types of biomedical tests for risk assessment. Spirometry combined with an interpretation of the results in terms of 'lung age' had a significant effect in a single good quality trial. Mixed quality evidence does not support the hypothesis that other types of biomedical risk assessment increase smoking cessation in comparison to standard treatment. Only two pairs of studies were similar enough in term of recruitment, setting, and intervention to allow meta-analysis.

Three essays on the psychology of investment and financial markets

Préface My thesis consists of three essays where I consider equilibrium asset prices and investment strategies when the market is likely to experience crashes and possibly sharp windfalls. Although each part is written as an independent and self contained article, the papers share a common behavioral approach in representing investors preferences regarding to extremal returns. Investors utility is defined over their relative performance rather than over their final wealth position, a method first proposed by Markowitz (1952b) and by Kahneman and Tversky (1979), that I extend to incorporate preferences over extremal outcomes. With the failure of the traditional expected utility models in reproducing the observed stylized features of financial markets, the Prospect theory of Kahneman and Tversky (1979) offered the first significant alternative to the expected utility paradigm by considering that people focus on gains and losses rather than on final positions. Under this setting, Barberis, Huang, and Santos (2000) and McQueen and Vorkink (2004) were able to build a representative agent optimization model which solution reproduced some of the observed risk premium and excess volatility. The research in behavioral finance is relatively new and its potential still to explore. The three essays composing my thesis propose to use and extend this setting to study investors behavior and investment strategies in a market where crashes and sharp windfalls are likely to occur. In the first paper, the preferences of a representative agent, relative to time varying positive and negative extremal thresholds are modelled and estimated. A new utility function that conciliates between expected utility maximization and tail-related performance measures is proposed. The model estimation shows that the representative agent preferences reveals a significant level of crash aversion and lottery-pursuit. Assuming a single risky asset economy the proposed specification is able to reproduce some of the distributional features exhibited by financial return series. The second part proposes and illustrates a preference-based asset allocation model taking into account investors crash aversion. Using the skewed t distribution, optimal allocations are characterized as a resulting tradeoff between the distribution four moments. The specification highlights the preference for odd moments and the aversion for even moments. Qualitatively, optimal portfolios are analyzed in terms of firm characteristics and in a setting that reflects real-time asset allocation, a systematic over-performance is obtained compared to the aggregate stock market. Finally, in my third article, dynamic option-based investment strategies are derived and illustrated for investors presenting downside loss aversion. The problem is solved in closed form when the stock market exhibits stochastic volatility and jumps. The specification of downside loss averse utility functions allows corresponding terminal wealth profiles to be expressed as options on the stochastic discount factor contingent on the loss aversion level. Therefore dynamic strategies reduce to the replicating portfolio using exchange traded and well selected options, and the risky stock.

Financial impact of introducing the Swiss-DRG reimbursement system on potentially avoidable readmissions at a university hospital.

QUESTION UNDER STUDY: Thirty-day readmissions can be classified as potentially avoidable (PARs) or not avoidable (NARs) by following a specific algorithm (SQLape®). We wanted to assess the financial impact of the Swiss-DRG system, which regroups some readmissions occurring within 18 days after discharge within the initial hospital stay, on PARs at our hospital. METHODS: First, PARs were identified from all hospitalisations recorded in 2011 at our university hospital. Second, 2012 Swiss-DRG readmission rules were applied, regrouped readmissions (RR) were identified, and their financial impact computed. Third, RRs were classified as potentially avoidable (PARRs), not avoidable (NARRs), and others causes (OCRRs). Characteristics of PARR patients and stays were retrieved, and the financial impact of PARRS was computed. RESULTS: A total of 36,777 hospitalisations were recorded in 2011, of which 3,140 were considered as readmissions (8.5%): 1,470 PARs (46.8%) and 1,733 NARs (53.2%). The 2012 Swiss-DRG rules would have resulted in 910 RRs (2.5% of hospitalisations, 29% of readmissions): 395 PARRs (43% of RR), 181 NARRs (20%), and 334 OCRRs (37%). Loss in reimbursement would have amounted to CHF 3.157 million (0.6% of total reimbursement). As many as 95% of the 395 PARR patients lived at home. In total, 28% of PARRs occurred within 3 days after discharge, and 58% lasted less than 5 days; 79% of the patients were discharged home again. Loss in reimbursement would amount to CHF 1.771 million. CONCLUSION: PARs represent a sizeable number of 30-day readmissions, as do PARRs of 18-day RRs in the 2012 Swiss DRG system. They should be the focus of attention, as the PARRs represent an avoidable loss in reimbursement.

Biomedical risk assessment as an aid for smoking cessation.

BACKGROUND: A possible strategy for increasing smoking cessation rates could be to provide smokers who have contact with healthcare systems with feedback on the biomedical or potential future effects of smoking, e.g. measurement of exhaled carbon monoxide (CO), lung function, or genetic susceptibility to lung cancer. We reviewed systematically data on smoking cessation rates from controlled trials that used biomedical risk assessment and feedback. OBJECTIVES: To determine the efficacy of biomedical risk assessment provided in addition to various levels of counselling, as a contributing aid to smoking cessation. SEARCH STRATEGY: We systematically searched he Cochrane Collaboration Tobacco Addiction Group Specialized Register, Cochrane Central Register of Controlled Trials (CENTRAL), MEDLINE (1966 to 2004), and EMBASE (1980 to 2004). We combined methodological terms with terms related to smoking cessation counselling and biomedical measurements. SELECTION CRITERIA: Inclusion criteria were: a randomized controlled trial design; subjects participating in smoking cessation interventions; interventions based on a biomedical test to increase motivation to quit; control groups receiving all other components of intervention; an outcome of smoking cessation rate at least six months after the start of the intervention. DATA COLLECTION AND ANALYSIS: Two assessors independently conducted data extraction on each paper, with disagreements resolved by consensus. MAIN RESULTS: From 4049 retrieved references, we selected 170 for full text assessment. We retained eight trials for data extraction and analysis. One of the eight used CO alone and CO + Genetic Susceptibility as two different intervention groups, giving rise to three possible comparisons. Three of the trials isolated the effect of exhaled CO on smoking cessation rates resulting in the following odds ratios (ORs) and 95% confidence intervals (95% CI): 0.73 (0.38 to 1.39), 0.93 (0.62 to 1.41), and 1.18 (0.84 to 1.64). Combining CO measurement with genetic susceptibility gave an OR of 0.58 (0.29 to 1.19). Exhaled CO measurement and spirometry were used together in three trials, resulting in the following ORs (95% CI): 0.6 (0.25 to 1.46), 2.45 (0.73 to 8.25), and 3.50 (0.88 to 13.92). Spirometry results alone were used in one other trial with an OR of 1.21 (0.60 to 2.42).Two trials used other motivational feedback measures, with an OR of 0.80 (0.39 to 1.65) for genetic susceptibility to lung cancer alone, and 3.15 (1.06 to 9.31) for ultrasonography of carotid and femoral arteries performed in light smokers (average 10 to 12 cigarettes a day). AUTHORS' CONCLUSIONS: Due to the scarcity of evidence of sufficient quality, we can make no definitive statements about the effectiveness of biomedical risk assessment as an aid for smoking cessation. Current evidence of lower quality does not however support the hypothesis that biomedical risk assessment increases smoking cessation in comparison with standard treatment. Only two studies were similar enough in term of recruitment, setting, and intervention to allow pooling of data and meta-analysis.