Holding Shareholders to Account: British Banking Stability and Contingent Capital

This chapter seeks to explain the relative stability of the British banking system in terms of its capital structure. From 1826 joint-stock banking was allowed, but shareholder liability was jointly and severally unlimited. Limited liability banks were allowed from 1857–8, but these banks issued partly paid shares with an obligation on shareholders to subscribe for uncalled capital. Contingent capital meant that shareholders and managers would suffer losses in the event of failure and this discouraged risk shifting at the expense of note-holders and depositors. Although individual banks collapsed, the failure rate of banks (in terms of number or capital) did not reach a critical level—10 per cent—beyond which the payments system might have been threatened. This chapter argues that agency problems and systemic risk rose after the abolition of contingent share capital in 1958 and the deregulation of the banking sector in the 1970s.

Regulatory Change and Capital Adjustment of US Credit Unions

We investigate the determinants of US credit union capital-to-assets ratios, before and after the implementation of the current capital adequacy regulatory framework in 2000. Capitalization varies pro-cyclically, and until the financial crisis credit unions classified as adequately capitalized or below followed a faster adjustment path than well capitalized credit unions. This pattern was reversed, however, in the aftermath of the crisis. The introduction of the PCA regulatory regime achieved a reduction in the proportion of credit unions classified as adequately capitalized or below that continued until the onset of the crisis. Since the crisis, the speed of recovery of credit unions in this category following an adverse capitalization shock was sharply reduced.

A study protocol for a pilot randomised trial of a structured education programme for the self-management of type 2 diabetes for adults with intellectual disabilities

BACKGROUND: The need for structured education programmes for type 2 diabetes is a high priority for many governments around the world. One such national education programme in the United Kingdom is the DESMOND Programme, which has been shown to be robust and effective for patients in general. However, these programmes are not generally targeted to people with intellectual disabilities (ID), and robust evidence on their effects for this population is lacking. We have adapted the DESMOND Programme for people with ID and type 2 diabetes to produce an amended programme known as DESMOND-ID. This protocol is for a pilot trial to determine whether a large-scale randomised trial is feasible, to test if DESMOND-ID is more effective than usual care in adults with ID for self-management of their type 2 diabetes, in particular as a means to reduce glycated haemoglobin (Hb1Ac), improve psychological wellbeing and quality of life and promote a healthier lifestyle. This protocol describes the rationale, methods, proposed analysis plan and organisational and administrative details.

METHODS/DESIGN: This trial is a two arm, individually randomised, pilot trial for adults with ID and type 2 diabetes, and their family and/or paid carers. It compares the DESMOND-ID programme with usual care. Approximately 36 adults with mild to moderate ID will be recruited from three countries in the United Kingdom. Family and/or paid carers may also participate in the study. Participants will be randomly assigned to one of two conditions using a secure computerised system with robust allocation concealment. A range of data will be collected from the adults with ID (biomedical, psychosocial and self-management strategies) and from their carers. Focus groups with all the participants will assess the acceptability of the intervention and the trial.

DISCUSSION: The lack of appropriate structured education programmes and educational materials for this population leads to secondary health conditions and may lead to premature deaths. There are significant benefits to be gained globally, if structured education programmes are adapted and shown to be successful for people with ID and other cognitive impairments.

TRIAL REGISTRATION: Registered with International Standard Randomised Controlled Trial (identifier: ISRCTN93185560 ) on 10 November 2014.

Capital Markets Union and ending short-termism: lessons from the European Commission's public consultation

The European Commission’s initiative to establish a Capital Markets Union is in sharp conflict with the more radical goals of downsizing significantly certain financial activities and firms that have become too-big-to-fail and too-big-to-govern and of ending or at least drastically limiting extreme speculation and short-termism in finance and the real economy in order to increase financial stability. The recent public consultation on the Commission’s Green Paper Building a Capital Markets Union gives evidence of how weak such demands are compared to calls for deeper capital markets with more ‘shadow banking’ and rebuilding (sound) securitisation. The consultation is an example of how framing the problem and the refined better regulation agenda influence post-crisis financial reregulation and help to marginalize more radical ideas demanding a return to a more traditional banking model and transforming finance back to serving the real economy.