Banking sector contingent liabilities and sovereign risk

The global financial crisis has underscored the need to pay attention to contingent government liabilities that could arise from bank failures for sovereign risk management. This paper proposes a simple method to construct a contingent liability index (CLI) for a banking sector that takes into account the size and concentration of the banking system, market expectations of bank defaults, and perceptions of government support to each bank. This method allows us to track potential government liabilities related to bank failures for 32 advanced and emerging economies on a monthly basis from 2006 to 2013. Furthermore, we find that the CLI is a significant determinant of sovereign CDS spreads. Our results suggest that a 1 percentage point increase in the CLI is associated with an increase in sovereign CDS spreads by 24 basis points for advanced economies and 75 basis points for emerging markets on average.

Serosorting may increase the risk of HIV acquisition among men who have sex with men

Background: Serosorting, the practice of seeking to engage in unprotected anal intercourse with partners of the same HIV status as oneself, has been increasing among men who have sex with men. However, the effectiveness of serosorting as a strategy to reduce HIV risk is unclear, especially since it depends on the frequency of HIV testing. Methods: We estimated the relative risk of HIV acquisition associated with serosorting compared with not serosorting by using a mathematical model, informed by detailed behavioral data from a highly studied cohort of gay men. Results: We demonstrate that serosorting is unlikely to be highly beneficial in many populations of men who have sex with men, especially where the prevalence of undiagnosed HIV infections is relatively high. We find that serosorting is only beneficial in reducing the relative risk of HIV transmission if the prevalence of undiagnosed HIV infections is less than ∼20% and ∼40%, in populations of high (70%) and low (20%) treatment rates, respectively, even though treatment reduces the absolute risk of HIV transmission. Serosorting can be expected to lead to increased risk of HIV acquisition in many settings. In settings with low HIV testing rates serosorting can more than double the risk of HIV acquisition. Conclusions: Therefore caution should be taken before endorsing the practice of serosorting. It is very important to continue promotion of frequent HIV testing and condom use, particularly among people at high risk.

Available evidence does not support serosorting as an HIV risk reduction strategy

Recent data highlighted the association between penetration of antiretrovirals in the central nervous system (CNS) and neurocognitive impairment in HIVpositive patients. Existing antiretrovirals have been ranked according to a score of neuropenetration, which was shown to be a predictor of anti-HIVactivity in the CNS and improvement of neurocognitive disorders [1]. Main factors affecting drug penetration are known to be protein binding, lipophilicity and molecular weight [2]. Moreover, active translation by membrane transporters (such as p-glycoprotein) could be a key mechanism of passage [3]. The use of raltegravir (RGV), a novel antiretroviral drug targeted to inhibit the HIV preintegrase complex, is increasing worldwide due to its efficacy and tolerability. However, penetration of RGV in the CNS has not been yet elucidated. In fact, prediction of RGV neuropenetration according to molecular characteristics is controversial. Intermediate protein binding (83%) and large volume of distribution (273 l) could suggest a high distribution beyond extracellular spaces [4]. On the contrary, low lipophilicity (oil/water partition coefficient at pH 7.4 of 2.80) and intermediate molecular weight (482.51 Da) suggest a limited diffusion. Furthermore, in-vitro studies suggest that RGV is substrate of p-glycoprotein, although this efflux pump has not been identified to significantly affect plasma pharmacokinetics [5]. In any case, no data concerning RGV passage into cerebrospinal fluid of animals or humans have yet been published.

The social foundations of risk

Ulrich Beck's argument about risk society emphasises, among other things, the pervasiveness of risk. As a feature of the human condition in the contemporary, globalised, world that distinguishes the present from the past, risk is widespread across society and affects all social strata. While Beck has gestured towards the irregular distribution of contemporary risks, nonetheless he has suggested that traditional structural entities – class and wealth – no longer provide the key interpretive frameworks for the calculation of susceptibility. In short, the tentacles of risk are long and almost no one is out of reach. Yet, while the risk society thesis has generated a large theoretical literature, there is very little in the way of research that marries theorising to original data collection. This paper represents an attempt to address this gap by using empirical data to investigate whether risk is more textured than Beck's account suggests. Focusing on health as a domain of risk, the paper uses data from a national sample survey of the Australian electorate to investigate the extent to which social divisions structure perceptions of risk within the general population. The findings suggest that various aspects of social stratification, such as income, occupation and education, do indeed play a role in shaping perceptions of risk.

Understanding causal relationships between the built and social environment, health and associated behaviours and risk factors

Introduction: Built environment interventions designed to reduce non-communicable diseases and health inequity, complement urban planning agendas focused on creating more ‘liveable’, compact, pedestrian-friendly, less automobile dependent and more socially inclusive cities.However, what constitutes a ‘liveable’ community is not well defined. Moreover, there appears to be a gap between the concept and delivery of ‘liveable’ communities. The recently funded NHMRC Centre of Research Excellence (CRE) in Healthy Liveable Communities established in early 2014, has defined ‘liveability’ from a social determinants of health perspective. Using purpose-designed multilevel longitudinal data sets, it addresses five themes that address key evidence-base gaps for building healthy and liveable communities. The CRE in Healthy Liveable Communities seeks to generate and exchange new knowledge about: 1) measurement of policy-relevant built environment features associated with leading non-communicable disease risk factors (physical activity, obesity) and health outcomes (cardiovascular disease, diabetes) and mental health; 2) causal relationships and thresholds for built environment interventions using data from longitudinal studies and natural experiments; 3) thresholds for built environment interventions; 4) economic benefits of built environment interventions designed to influence health and wellbeing outcomes; and 5) factors, tools, and interventions that facilitate the translation of research into policy and practice. This evidence is critical to inform future policy and practice in health, land use, and transport planning. Moreover, to ensure policy-relevance and facilitate research translation, the CRE in Healthy Liveable Communities builds upon ongoing, and has established new, multi-sector collaborations with national and state policy-makers and practitioners. The symposium will commence with a brief introduction to embed the research within an Australian health and urban planning context, as well as providing an overall outline of the CRE in Healthy Liveable Communities, its structure and team. Next, an overview of the five research themes will be presented. Following these presentations, the Discussant will consider the implications of the research and opportunities for translation and knowledge exchange. Theme 2 will establish whether and to what extent the neighbourhood environment (built and social) is causally related to physical and mental health and associated behaviours and risk factors. In particular, research conducted as part of this theme will use data from large-scale, longitudinal-multilevel studies (HABITAT, RESIDE, AusDiab) to examine relationships that meet causality criteria via statistical methods such as longitudinal mixed-effect and fixed-effect models, multilevel and structural equation models; analyse data on residential preferences to investigate confounding due to neighbourhood self-selection and to use measurement and analysis tools such as propensity score matching and ‘within-person’ change modelling to address confounding; analyse data about individual-level factors that might confound, mediate or modify relationships between the neighbourhood environment and health and well-being (e.g., psychosocial factors, knowledge, perceptions, attitudes, functional status), and; analyse data on both objective neighbourhood characteristics and residents’ perceptions of these objective features to more accurately assess the relative contribution of objective and perceptual factors to outcomes such as health and well-being, physical activity, active transport, obesity, and sedentary behaviour. At the completion of the Theme 2, we will have demonstrated and applied statistical methods appropriate for determining causality and generated evidence about causal relationships between the neighbourhood environment, health, and related outcomes. This will provide planners and policy makers with a more robust (valid and reliable) basis on which to design healthy communities.

Institutional investors, risk/return and corporate governance : practical lessons from the Global Financial Crisis

The global grown in institutional investors means that firms can no longer ignore their influence in capital markets. However, not all institutional investors have the same motives to influence the firms they invest in. Institution investors' ability to influence management depends on the size of their investment and whether they have any business relations with the firm. Using a sample of Australian firms from 2006 to 2008, our empirical results show that the proportion of a company's shares held by institutional investors is positively associated with firm governance ratings, risk and profitability. This study shows that a positive association between risk and return is associated with large active institutional ownership, which we interpret as shareholders with sufficient power to pressure management to increase short-term profits.

Analysis of risk management disclosures by Australian publicly listed companies

In the aftermath of the global financial crisis, effective risk management (RM) and its communication to stakeholders are now considered essential components in corporate governance. However, despite the importance of RM communication, it is still unclear how and to what extent disclosures in financial reports can achieve effective communication of RM activities. The situation is hampered by the paucity of international RM Research that captures institution differences in corporate governance standards. The Australian setting provides an ideal environment in which to examine RM communication because the Australian Securities Exchange (ASX) has since 2007 recommended RM disclosures under its principle-based governance rules. The recommendations are contained in Principle 7 of the Corporate Governance Principles and recommendations (ASX CGPR). Accordingly, to assess the effectiveness of the AXS's RM governance principle, this study examines the nature and extent of RM disclosures reported by major ASX-listed firms. Using a mixed method approach (thematic content analysis and a series of regression analysis) we find widespread divergence in disclosure practices and low conformance with the Principle 7 recommendations. Certain corporate governance mechanisms appear to influence some categories of RM dislcosure but equity risk has surprisingly little explanatory power. These results suggest that the RM disclosures practices observed in the Australian setting may not be meeting the objectives of regulators and the needs of stakeholders.

The value of tail risk hedging in defined contribution plans: What does history tell us

Hedging against tail events in equity markets has been forcefully advocated in the aftermath of recent global financial crisis. Whether this is beneficial to long horizon investors like employees enrolled in defined contribution (DC) plans, however, has been subject to criticism. We conduct historical simulation since 1928 to examine the effectiveness of active and passive tail risk hedging using out of money put options for hypothetical equity portfolios of DC plan participants with 20 years to retirement. Our findings show that the cost of tail hedging exceeds the benefits for a majority of the plan participants during the sample period. However, for a significant number of simulations, hedging result in superior outcomes relative to an unhedged position. Active tail hedging is more effective when employees confront several panic-driven periods characterized by short and sharp market swings in the equity markets over the investment horizon. Passive hedging, on the other hand, proves beneficial when they encounter an extremely rare event like the Great Depression as equity markets go into deep and prolonged decline.

Faster parameter estimation using risk-sensitive filters

In this paper, we propose a risk-sensitive approach to parameter estimation for hidden Markov models (HMMs). The parameter estimation approach considered exploits estimation of various functions of the state, based on model estimates. We propose certain practical suboptimal risk-sensitive filters to estimate the various functions of the state during transients, rather than optimal risk-neutral filters as in earlier studies. The estimates are asymptotically optimal, if asymptotically risk neutral, and can give significantly improved transient performance, which is a very desirable objective for certain engineering applications. To demonstrate the improvement in estimation simulation studies are presented that compare parameter estimation based on risk-sensitive filters with estimation based on risk-neutral filters.

The relationship between 'reasonably practicable'and risk management regulation

This paper examines two concepts which are central to contemporary standard setting in occupational health and safety (OHS) regulation, and explores the differences and similarities between these concepts – the notion of ‘reasonably practicable’ which qualifies the ‘general duties’ and some other provisions in the Australian OHS standards, and the risk management requirements typically found in OHS regulations and approved codes of practice (advisory standards in Queensland).

Outsourcing risk -the regulation of occupational health and safety where subcontractors are employed

The subcontracting out of production tasks and services is not a new phenomenon, but from the late 1970s, and more especially over the last 15years, the practice-now frequently referred to as outsourcing-has grown substantially across a range of industries in most industrialized countries.Recent surveys undertaken in the United States,Europe,and Australia have all identified a rapid increase in outsourcing/subcontracting, especially amongst large private and public sector organizations. The Second Australian Workplace Industrial Relations Survey found that the number of contractors, agency workers, outworkers, and volunteers had increased by almost 40% in the last 5 years to 1997 with contracting out more common in the public sector than the private sector. Outsourcing has become a major tool by which large organizations have sought to increase competitiveness/cut costs, bypass regulatory controls, and secure more flexible employment arrangements.

OHS inspectors and psychosocial risk factors: Evidence from Australia

Legislation giving prominence to psychosocial risk factors at work has changed the role of government occupational health and safety (OHS) inspectors in many countries. Yet little is known about how inspectorates have responded to these changes. Between 2003 and 2007 an Australian study was undertaken on OHS standards, entailing detailed documentary analysis, interviews with 36 inspectorate managers and 89 inspectors, and observations made when researchers accompanied inspectors on 120 typical workplace visits. Our study found that general duty provisions in OHS legislation clearly incorporated psychosocial hazards and inspectorates had introduced guidance material, pursued campaigns and increased interventions in this area. However, the regulatory framework remained narrow (focused on bullying/harassment, occupational violence and work stress) and workplace visits revealed psychosocial hazards as a marginal area of inspectorate activity. These findings were reinforced in interviews. While aware of psychosocial hazards inspectors often saw the issue as problematic due to limited training, resourcing constraints, deficiencies in regulation and fears of victimisation amongst workers. In order to address these problems a number of changes are required that recognize the distinctiveness of psychosocial hazards including their ‘invisibility’. Notable here are revisions to regulation (both general duty provisions and specific codes), the development of comprehensive guidance and assessment tools to be used by inspectors, greater use of procedural enforcement, and enhanced inspectorate resourcing and training. There is also a need to recognize complex inter-linkages between psychosocial hazards and the industrial relations context.

Flood victim’s heartbreak : ‘don’t be complacent about the risk’

"No one had higher stakes in the findings of the Queensland Floods Commission of Inquiry than Grantham father Matthew Keep, whose mother, mother-in-law and baby daughter, Jessica, died at Grantham that terrible day in January. For seven months he has read every statement, submission, running log, disaster management plan and media article available. As he has comforted his grieving wife, Stacy, helped care for his two young children Madison, 5, and Jacob, 4, who amazingly survived the flood, and welcomed a new baby into the family, Matthew has searched for answers for himself and his community. Why were authorities not able to warn people in seven towns in Toowoomba and the Lockyer Valley that the worst flash flooding in at least a century was about to strike, killing 22 people? How could such a sudden and catastrophic flood claim three members of his family within minutes?"

Predicting the likelihood of non-healing : a venous leg ulcer risk assessment tool

This project developed, validated and tested reliability of a risk assessment tool to predict the risk of failure to heal of patients with venous leg ulcers within 24 weeks. The risk assessment tool will allow clinicians to be able to determine realistic outcomes for their patients, promote early healing and potentially avoid weeks of inappropriate therapy. The tool will also assist in addressing specific risk factors and guide decisions on early, alternative, tailored interventions.

Improving treatment for obese women with early stage cancer of the uterus : rationale and design of the levonorgestrel intrauterine device ±Metformin ±weight loss in endometrial cancer (feMME) trial

Purpose Endometrial adenocarcinoma (EC) is the most common gynaecologic cancer. Up to 90% of EC patients are obese which poses a health threat to patients post-treatment. Standard treatment for EC includes hysterectomy, although this has significant side effects for obese women at high risk of surgical complications and for women of childbearing age. This trial investigates the effectiveness of non-surgical or conservative treatment options for obese women with early stage EC. The primary aim is to determine the efficacy of: levonorgestrel intrauterine device (LNG-IUD); with or without metformin (an antidiabetic drug); and with or without a weight loss intervention to achieve a pathological complete response (pCR) in EC at six months from study treatment initiation. The secondary aim is to enhance understanding of the molecular processes and to predict a treatment response by investigating EC biomarkers. Methods An open label, three-armed, randomised, phase-II, multi-centre trial of LNG-IUD ± metformin ± weight loss intervention. 165 participants from 28 centres are randomly assigned in a 3:3:5 ratio to the treatment arms. Clinical, quality of life and health behavioural data will be collected at baseline, six weeks, three and six months. EC biomarkers will be assessed at baseline, three and six months. Conclusions There is limited prospective evidence for conservative treatment for EC. Trial results could benefit patients and reduce health system costs through a reduction in hospitalisations and through lower incidence of adverse events currently observed with standard treatment.