The Euro as an International Currency: explaining puzzling first evidence from the foreign exchange markets

This paper presents evidence that the bid-ask spreads in euro rates increased relative to the corresponding bid-ask spreads in the German mark (DM) prior to the creation of the currency union. This comes with a decrease in transaction volume in the euro rates relative to the previous DM rates. The starkest example is the DM(euro)/yen rate in which the spread has risen by almost two-thirds while the volume decreased by more than one third. This outcome is surprising because the common currency concentrated market liquidity in fewer external euro rates and higher volume tends to be associated with lower spreads. We propose a microstructure explanation based on a change in the information environment of the FX market. The elimination of many cross currency pairs increased the market transparency for order flow imbalances in the dealership market. It is argued that higher market transparency adversely affects the inventory risk sharing efficiency of the dealership market and induces the observed euro spread increase and transaction volume shortfall.

Benchmark Status in Fixed-Income Asset Markets

What is a benchmark bond? We provide a formal theoretical treatment of this concept that relates endogenously determined benchmark status to the location of price discovery and we derive its implications. We describe a rich but little used econometric technique for identifying the benchmark that is congruent with our theoretical framework. We apply this in the context of the US corporate bond market and to the natural experiment that occurred when benchmark status was contested in the European sovereign bond markets after the introduction of the Euro. We show that France provides the benchmark at most maturities in the Euro-denominated sovereign bond market and that IBM provides the benchmark in the 10 year maturity in the US corporate bond market.

Transparency Proposals for European Sovereign Bond Markets

The debate over the possible extension of transparency regulation in Europe to include sovereign bonds has opened up a number of other issues in need of serious consideration. One such issue is the appropriateness of the entire infrastructure supporting the trading of European sovereign bonds. In recent years sovereign issuers have supported the development of an electronic inter-dealer market but have remained unconcerned with the opacity of dealer-to-customer trading. The degree of segmentation in this market is high relative to what exists in nearly all other financial markets. This paper explores why European sovereign bond markets have developed in such a segmented way and considers how this structure could be altered to improve transparency without adversely affecting liquidity, efficiency or the benefits enjoyed by primary dealers and issuers. It is suggested that the structure of the market could be improved greatly if the largest and most active investors were permitted access to the inter-dealer electronic trading platforms. This would solve a number of market imperfections and increase the proportion of market activity that is conducted in a transparent way. The paper argues that sovereign issuers in Europe have the means to provide incentives that would influence dealers to support reduced segmentation. Some practical examples of how this could be achieved are provided and the potential benefits are outlined.

The pathogenesis of venous thromboembolism in cancer: emerging links with tumour biology.

Venous thromboembolism (VTE) is a frequent complication in individuals with cancer and is considered to be a cause of substantial mortality. Epidemiological studies identify malignancy as an independent VTE risk factor and show that cancer patients are at increased risk of both initial and recurrent VTE events. The risk due to cancer is compounded by the effects of chemotherapy and other treatments. The pathogenesis of cancer-associated VTE is complex involving multiple interactions between tumours and various components of haemostasis. The development of a systemic hypercoagulable state is considered a key pathogenetic feature and is attributed to tumour expression of tissue factor and other procoagulants, activation of vascular cells by tumour-derived cytokines and adhesive interactions between tumour cells and host cells. An increasing body of evidence indicates that the activation of haemostasis in malignant disease contributes to tumour growth and progression by stimulation of intracellular signalling pathways. The interaction of tissue factor, thrombin and other coagulation factors with protease activated receptor (PAR) proteins expressed by tumour cells and host vascular cells leads to the induction of genes related to the processes of angiogenesis, cell survival and cell adhesion and migration.

The emerging role of serine proteases in apoptosis

Unregulated apoptosis can be due to a disruption in the balance and control of both intra- and inter-cellular proteolytic activities leading to various disease states. Many proteases involved in apoptotic processes are yet to be identified; however, several are already well characterized. Caspases traditionally held the predominant role as prime mediators of execution. However, latterly, evidence has accumulated that non-caspases, including calpains, cathepsins, granzymes and the proteasome have roles in mediating and promoting cell death. Increasingly, research is implicating serine proteases within apoptotic processing, particularly in the generation of nuclear events such as condensation, fragmentation and DNA degradation observed in late-stage apoptosis. Serine proteases therefore are emerging as providing additional or alternative therapeutic targets.