A Copernican turn in Banking Union urgently needed. CEPS Policy Brief No. 297, July 2013 [is another Brief with no. 297]

Despite broad agreement among central bankers, policy-makers and economists that creation of a ‘Banking Union’ is essential for the survival of the euro, progress in building this union has been painfully slow. This is largely due to the protracted fights over which government will be the payer of last resort when banks fail because of bad loans made in the past. Taking a cue from Copernicus, Thomas Mayer suggests in this new CEPS Policy Brief that the impasse may be broken by turning the whole process on its head. So, instead of trying to move from common bank supervision, over to bank resolution and then on to deposit insurance, he proposes reversing the process by starting with deposit insurance, moving from there to resolution and ending with supervision.

Banking Union: are the EMU design mistakes being repeated? European Policy Brief No. 12, October 2012

This Policy Brief pleads for an unambiguous commitment by eurozone leaders to establishing a Banking Union that is based on all three of its pillars: common supervision, a single bank resolution authority and a joint deposit insurance. There is a clear risk that the EU will agree on common supervision, but subsequently fails to put in place the remaining elements of its Banking Union. By doing so, the EU would make the same mistake as when it designed EMU, namely, creating a system with built-in flaws that risks leading to huge costs and a questioning of the European project as such.

Firmer foundations for a stronger European Banking Union. Bruegel Working Paper 2015/13, November 2015

The move to European Banking Union involving the supervision and resolution of banks at euro-area level was stimulated by the sovereign debt crisis in the euro area in 2012. However, the long-term objective of Banking Union is dealing with intensified cross-border banking.The share of the assets of national banking systems that come from other EU countries was rising before the financial and economic crisis of 2007, but went into decline thereafter in the context of a general retrenchment of international banking. Most recent data, however, suggests the decline has been halted. About 14 percent of the assets of banks in Banking Union come from other EU countries, while about a quarter of the assets of the top 25 banks in the Banking Union are held in other EU countries.While a crisis-prevention framework for the euro area has largely been completed, the crisis-management framework remains incomplete, potentially creating instability. There is no governance mechanism to resolve disputes between different levels of crisis-management agencies, and incentives to promote optimum oversight are lacking. Most importantly, risk-sharing mechanisms do not adequately address the sovereign-bank loop, with a lack of clarity about the divide between bail-in and bail-out.To complete Banking Union, the lender-of-last-resort and deposit insurance functions should move to the euro-area level, breaking the sovereign-bank loop. A fully-fledged single deposit insurance (and resolution) fund should be favoured over a reinsurance scheme for reasons of cost and simplicity.

Financial regulatory transparency: new data and implications for EU policy. Bruegel Policy Brief 2015/20, December 2015

International financial institutions have promoted financial regulatory transparency, or the publication by supervisors of financial industry data. Financial regulatory transparency enhances market stability and increases democratic legitimacy. • We introduce a new index of financial regulatory data transparency: the FRT Index. It measures how countries report to international financial institutions basic macroprudential data about their financial systems.The Index covers 68 high-income and emerging-market economies over 22 years (1990-2011). • We find a number of striking trends over this period. European Union members are generally more opaque than other high-income countries.This finding is especially relevant given efforts to create an EU capital markets union. • Globally, financial regulatory data transparency has increased. However, there is considerable variation. Some countries have become significantlymore transparent, while others have become much more opaque. Reporting tends to decline during financial crises. • We propose that the EU institutions take on a greater role in coordinating and possibly enforcing reporting of bank and non-bank institution data. Similar to the United States, a reporting requirement should be part of any EU general deposit insurance scheme.

Administrations plan to resolve the savings & loan crisis [microform] : hearing before the Committee on Banking, Finance, and Urban Affairs, House of Representatives, One Hundred First Congress, first session, February 23, 1989.

"Serial no. 101-32."

Report.

Report year irregular.

Essays on financial crises

This dissertation analyzes recent financial crises in developed and developing countries. The research emphasizes the effects of institutional factors on the international banking and currency crises and their output losses. ^ Chapter two examines the roles of regulation, supervision, and countries' institutional environment in determining the probability of banking crises for a panel of fifteen developed countries from 1975 to 1998. The results from a multivariate logit model indicated that countries with greater government involvement, less capital standard requirements, and lower lending limits on a single borrower are associated with a higher probability of banking crises. ^ Chapter three studies whether output loss in banking crisis differs in market-based or bank-based financial systems. Using existing banking crisis data for sixty-nine countries during 1970–1999, we investigate whether the underlying financial system affects the output loss. The results show that output losses are more serious in market-based economies than those in bank-based economies. Longer crisis duration tends to increase the output losses in banking crises. Finally, countries with deposit insurance and strict law enforcement have less output losses. ^ Chapter four uses macroeconomic and institutional measures to explain the extent of exchange rate depreciation and the decline in stock prices for emerging countries affected by the Mexican currency crisis of 1994–95. The results show that countries with more government budget deficits, and worse reserve adequacies tend to experience large exchange rate depreciation. The institutional measures do not explain much the extent of both the exchange rate depreciation and the decline in stock prices. ^

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

The medical malpractice insurance "crises" and federal medical malpractice tort reform: Collection and analysis of bills passed by the United States House of Representatives from 1995--2005

There have been three medical malpractice insurance "crises" in the United States over a time spanning roughly the past three decades (Poisson, 2004, p. 759-760). Each crisis is characterized by a number of common features, including rapidly increasing medical malpractice insurance premiums, cancellation of existing insurance policies, and a decreased willingness of insurers to offer or renew medical malpractice insurance policies (Poisson, 2004, p. 759-760). Given the recurrent "crises," many sources argue that medical malpractice insurance coverage has become too expensive a commodity—one that many physicians simply cannot afford (U.S. Department of Health and Human Services [HHS], 2002, p. 1-2; Physician Insurers Association of America [PIAA], 2003, p. 1; Jackiw, 2004, p. 506; Glassman, 2004, p. 417; Padget, 2003, p. 216). ^ The prohibitively high cost of medical liability insurance is said to limit the geographical areas and medical specializations in which physicians are willing to practice. As a result, the high costs of medical liability insurance are ultimately said to affect whether or not people have access to health care services. ^ In an effort to control the medical liability insurance crises—and to preserve or restore peoples' access to health care—every state in the United States has passed "at least some laws designed to reduce medical malpractice premium rates" (GAO, 2003, p.5-6). More recently, however, the United States has witnessed a push to implement federal reform of the medical malpractice tort system. Accordingly, this project focuses on federal medical malpractice tort reform. This project was designed to investigate the following specific question: Do the federal medical malpractice tort reform bills which passed in the House of Representatives between 1995 and 2005 differ in respect to their principle features? To answer this question, the text of the bills, law review articles, and reports from government and private agencies were analyzed. Further, a matrix was compiled to concisely summarize the principle features of the proposed federal medical malpractice tort reform bills. Insight gleaned from this investigation and matrix compilation informs discussion about the potential ramifications of enacting federal medical malpractice tort reform legislation. ^

Proposed small saver deposit instruments [microform] : hearing before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the Committee on Banking, Finance and Urban Affairs, House of Representatives, Ninety-sixth Congress, first session, May 7, 1979.

Reuse of record except for individual research requires license from Congressional Information Service, Inc.

Strengthening unemployment insurance : conclusions of report of the Federal Advisory Council to the Secretary of labor, and the director, Bureau of employment security.

Mimeographed.

Social security rulings on Federal old-age, survivors, disability, health insurance, supplemental security income, and black lung benefits.

Reproduces in full part I of all quarterly issues for the year. The rulings contain precedential case decisions, statements of policy and interpretations of titles II, XVI, and XVIII of the Social security act, title IV of the Federal coal mine health and safety act of 1969, as amended, and related laws.