The Optimal Capital Structure of Banks: Balancing Deposit Insurance, Capital Requirements and Tax-Advantaged Debt

The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its costs (e.g., bankruptcy costs). However, when traditional corporate finance models have been applied to insured financial institutions, the results have generally predicted corner solutions (all equity or all debt) to the capital structure problem. This paper studies the impact and interaction of deposit insurance, capital requirements and tax benefits on a bankÇs choice of optimal capital structure. Using a contingent claims model to value the firm and its associated claims, we find that there exists an interior optimal capital ratio in the presence of deposit insurance, taxes and a minimum fixed capital standard. Banks voluntarily choose to maintain capital in excess of the minimum required in order to balance the risks of insolvency (especially the loss of future tax benefits) against the benefits of additional debt. Because we derive a closed- form solution, our model provides useful insights on several current policy debates including revisions to the regulatory framework for GSEs, tax policy in general and the tax exemption for credit unions.

Productivity Growth and Efficiency in Indian Banking: A Comparison of Public, Private, and Foreign Banks

India's public sector banks (PSBs) are compared unfavorably with their private sector counterparts, domestic and foreign. This comparison rests, for the most part, on financial measures of performance, and such a comparison provides much of the rationale for privatization of PSBs.In this paper, we attempt a comparison between PSBs and their private sector counterparts based on measures of productivity that use quantities of outputs and inputs. We employ two measures of productivity: Tornqvist and Malmquist total factor productivity growth. We attempt these comparisons over the period 1992-2000, comparing PSBs with both domestic private and foreign banks. Out of a total of four comparisons we have made, there are no differences in three cases, PSBs do better in two, and foreign banks in one. To put it differently, PSBs are seen to be at a disadvantage in only one out of six comparisons. It is difficult, therefore, to sustain the proposition that efficiency and productivity have been lower in public sector banks relative to their peers in the private sector.

The Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

This paper considers the performance of banks, domestic and foreign, in Korea prior to, during, and immediately after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their returns on assets and equity as a rule. Several standard findings emerge. For example, equity to assets correlates positively with domestic, but not foreign, bank performance, as measured by the returns on assets and equity, even when the government recapitalized institutions that were performing quite badly. Also, foreign-currency deposits significantly and negatively correlate with domestic Korean bank performance, although only in the post-crisis period for regional banks. In sum, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks.

The Effect of the Asian Financial Crisis on the Performance of Korean Nationwide Banks

The Asian financial crisis spread its effect quickly across a number of countries. Korea faced serious problems in her financial and corporate sectors. This paper considers the performance of Korean nationwide banks before, during, and immediately after the Asian financial crisis. The performance of Korean nationwide banks took a big hit in 1998. Most banks recovered somewhat in 1999 with the notable exception of the further deterioration of Seoul. Several factors possess strong correlations with bank performance. Among other standard findings, equity to assets correlates positively with bank performance, even when the government recapitalized a number of institutions that performed poorly. The Asian crisis did not affect the normal rules of good bank management. The government, however, directly intervened in the banking sector on a large scale to limit the scope of the crisis in the Korean economy.

A stakeholder analysis of the Texas Youth Commission issue for the Texas 80th Legislative Session

The following is a policy analysis based on the Advocacy Coalition Framework by Paul Sabatier. The study question was who were the stakeholders in the legislative process for the issue of the Texas Youth Commission (TYC) overhaul during the Texas 80th Legislative Session. This analysis included the stakeholders identifying characteristics including beliefs and interests, goals and resources, and finally, the winning legislative solutions as embodied in three bills that were passed. The study linked the stakeholders with three bills and expanded on the literature for the stakeholder group of Policy Brokers. The conclusions were that all stakeholders including Youth Advocates, the Policy People and Policy Brokers were effective in advancing legislative solutions to address the need for an agency overhaul of TYC and that the three new policies will be evaluated in the future as either short term change or long-term reforms based on their implementation. ^

Access to oral care --- A systematic review of a continuing public health issue among older adults

Oral health is essential for the general well being of the individual and collectively for the health of the population. Oral health can be maintained by routine dental care and visits to dental professionals, but accessing professional dental care may be a continuing difficulty in vulnerable older adult population. Many older adults are not frequent users of dental care, though oral health is crucial to their well-being and overall health. Access to care is the timely use of personal health services to achieve the best possible health outcomes. ^ Objectives: The aims of this review are to (i) to analyze and elucidate the relationship between socio-economic disparities in gender, ethnicity, poverty status, education and the continuing public issue of access to oral care, (ii) to identify the underlying causes through which these factors can affect access to oral care. This review will provide a knowledgeable basis for development of interventions to provide adequate access to oral care in older adults and implementing policies to ensure access to oral care; through highlighting the various socio economic factors that affect access to oral care among older adults. ^ Methods: This paper used a purposeful review of literature on socioeconomic disparities in access to oral care among older adults. The references considered in this review included all the relevant articles, surveys and reports published in English language, since the year 1985 to 2010, in the United States. The articles selected were scrutinized for relevancy to the topic of access to oral care and which included discussions of the effects of gender, ethnicity, poverty status, educational status in accessing oral care. ^ Results: Evidence confirmed the continuing disparity in access to oral care among older adults. The possible links identified were gender inequality, ethnic differences, income levels and educational differences affecting access to oral care. The underlying causes linking these factors with access to oral care were established. ^ Conclusion: The analysis of the literature review findings supported the prevalence of disparities in gender, ethnicity, income and education with its possible links affecting access to oral care. The underlying causes helped to understand the reasons behind this growing issue of inaccessible oral care. Further research is needed to develop policies and target dental public health efforts towards specific problem areas ensuring equitable access to oral services and consequently, improve the health of older adults.^

Species list of the flora on Banks Island

While engaged in palaeo-botanical and plantgeographical field work on Banks Island, N. W. T. during the summer of 1973, 225 new plants could be recorded for the vicinities of Sachs Harbour, Shoran Lake and Johnson Point; 21 of them were new for Banks Island, 7 for the western Canadian archipelago.