Developing “Best Practices” for bankers’ pay in line with Basel III

This paper proposes hybrid capital securities as a significant part of senior bank executive incentive compensation in light of Basel III, a new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision. The committee developed Basel III in a response to the deficiencies in financial regulation brought about by the global financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The hybrid bank capital securities we propose for bank executives’ compensation are preferred shares and subordinated debt that the June 2004 Basel II regulatory framework recognised as other admissible forms of capital. The past two decades have witnessed dramatic increase in performance-related pay in the banking industry. Stakeholders such as shareholders, debtholders and regulators criticise traditional cash and equity-based compensation for encouraging bank executives’ excessive risk taking and short-termism, which has resulted in the failure of risk management in high profile banks during the global financial crisis. Paying compensation in the form of hybrid bank capital securities may align the interests of executives with those of stakeholders and help banks regain their reputation for prudence after years of aggressive risk-taking. Additionally, banks are desperately seeking to raise capital in order to bolster balance sheets damaged by the ongoing credit crisis. Tapping their own senior employees with large incentive compensation packages may be a viable additional source of capital that is politically acceptable in times of large-scale bailouts of the financial sector and economically wise as it aligns the interests of the executives with the need for a stable financial system.

Assessing and understanding the impact of stratospheric dynamics and variability on the earth system

Advances in weather and climate research have demonstrated the role of the stratosphere in the Earth system across a wide range of temporal and spatial scales. Stratospheric ozone loss has been identified as a key driver of Southern Hemisphere tropospheric circulation trends, affecting ocean currents and carbon uptake, sea ice, and possibly even the Antarctic ice sheets. Stratospheric variability has also been shown to affect short term and seasonal forecasts, connecting the tropics and midlatitudes and guiding storm track dynamics. The two-way interactions between the stratosphere and the Earth system have motivated the World Climate Research Programme's (WCRP) Stratospheric Processes and Their Role in Climate (SPARC) DynVar activity to investigate the impact of stratospheric dynamics and variability on climate. This assessment will be made possible by two new multi-model datasets. First, roughly 10 models with a well resolved stratosphere are participating in the Coupled Model Intercomparison Project 5 (CMIP5), providing the first multi-model ensemble of climate simulations coupled from the stratopause to the sea floor. Second, the Stratosphere Historical Forecasting Project (SHFP) of WCRP's Climate Variability and predictability (CLIVAR) program is forming a multi-model set of seasonal hindcasts with stratosphere resolving models, revealing the impact of both stratospheric initial conditions and dynamics on intraseasonal prediction. The CMIP5 and SHFP model-data sets will offer an unprecedented opportunity to understand the role of the stratosphere in the natural and forced variability of the Earth system and to determine whether incorporating knowledge of the middle atmosphere improves seasonal forecasts and climate projections. Capsule New modeling efforts will provide unprecedented opportunities to harness our knowledge of the stratosphere to improve weather and climate prediction.

Altering peptide fibrillization by polymer conjugation

A strategy is presented that exploits the ability of synthetic polymers of different nature to disturb the strong selfassembly capabilities of amyloid based β-sheet forming peptides. Following a convergent approach, the peptides of interest were synthesized via solid-phase peptide synthesis (SPPS) and the polymers via reversible addition−fragmentation chain transfer (RAFT) polymerization, followed by a copper(I) catalyzed azide− alkyne cycloaddition (CuAAC) to generate the desired peptide− polymer conjugates. This study focuses on a modified version of the core sequence of the β-amyloid peptide (Aβ), Aβ(16−20) (KLVFF). The influence of attaching short poly(Nisopropylacrylamide) and poly(hydroxyethylacrylate) to the peptide sequences on the self-assembly properties of the hybrid materials were studied via infrared spectroscopy, TEM, circular dichroism and SAXS. The findings indicate that attaching these polymers disturbs the strong self-assembly properties of the biomolecules to a certain degree and permits to influence the aggregation of the peptides based on their β-sheets forming abilities. This study presents an innovative route toward targeted and controlled assembly of amyloid-like fibers to drive the formation of polymeric nanomaterials.

Host–guest supramolecular interactions in the coordination compounds of 4,4′-azobis(pyridine) with MnX2(X = NCS–, NCNCN–, and PF6–): structural analyses and theoretical study

Three new Mn(II) coordination compounds {[Mn(NCNCN)2(azpy)]·0.5azpy}n (1), {[Mn(NCS)2(azpy)(CH3OH)2]·azpy}n (2), and [Mn(azpy)2(H2O)4][Mn(azpy)(H2O)5]·4PF6·H2O·5.5azpy (3) (where azpy = 4,4'-azobis-(pyridine)) have been synthesized by self-assembly of the primary ligands, dicyanamide, thiocyanate, and hexafluorophosphate, respectively, together with azpy as the secondary spacer. All three complexes were characterized by elemental analyses, IR spectroscopy, thermal analyses, and single crystal X-ray crystallography. The structural analyses reveal that complex 1 forms a two-dimensional (2D) grid sheet motif These sheets assemble to form a microporous framework that incorporates coordination-free azpy by host-guest pi center dot center dot center dot pi. and C-H center dot center dot center dot N hydrogen bonding interactions. Complex 2 features azpy bridged one-dimensional (ID) chains of centrosymmetric [Mn(NCS)(2)(CH3OH)(2)} units which form a 2D porous sheet via a CH3 center dot center dot center dot pi supramolecular interaction. A guest azpy molecule is incorporated within the pores by strong H-bonding interactions. Complex 3 affords a 0-D motif with two monomeric Mn(II) units in the asymmetric unit. There exist pi center dot center dot center dot pi, anion center dot center dot center dot pi, and strong hydrogen bonding interactions between the azpy, water, and the anions. Density functional theory (DFT) calculations, at the M06/6-31+G* level of theory, are used to characterize a great variety of interactions that explicitly show the importance of host-guest supramolecular interactions for the stabilization of coordination compounds and creation of the fascinating three-dimensional (3D) architecture of the title compounds.

Self-assembled arginine-coated peptide nanosheets in water

The surfactant-like peptide (Ala)6(Arg) is found to self-assemble into 3 nm-thick sheets in aqueous solution. Scanning transmission electron microscopy measurements of mass per unit area indicate a layer structure based on antiparallel dimers. At higher concentration the sheets wrap into unprecedented ultrathin helical ribbon and nanotube architectures.

Cross-country effects of regulatory capital arbitrage

One reason for the recent asset price bubbles in many developed countries could be regulatory capital arbitrage. Regulatory and legal changes can help traditional banks to move their assets off their balance sheets into the lightly regulated shadows and thus enable regulatory arbitrage through the securitized sector. This paper adopts a global vector autoregression (GVAR) methodology to assess the effects of regulatory capital arbitrage on equity prices, house prices and economic activity across 11 OECD countries/ regions. A counterfactual experiment disentangles the effects of regulatory arbitrage following a change in the net capital rule for investment banks in April 2004 and the adoption of the Basel II Accord in June 2004. The results provide evidence for the existence of an international finance multiplier, with about half of the countries overshooting U.S. impulse responses. The counterfactual shows that regulatory arbitrage via the U.S. securitized sector may enhance the cross-country reallocation of capital from housing markets towards equity markets.

High-latitude climate sensitivity to ice-sheet forcing over the last 120kyr

Interpretation of ice-core records is currently limited by paucity of modelling at adequate temporal and spatial resolutions. Several key questions relate to mechanisms of polar amplification and inter-hemispheric coupling on glacial/interglacial timescales. Here, we present the first results from a large set of global ocean–atmosphere climate model ‘snap-shot’ simulations covering the last 120 000 years using the Hadley Centre climate model (HadCM3) at up to 1 kyr temporal resolution. Two sets of simulations were performed in order to examine the roles of orbit and greenhouse gases versus ice-sheet forcing of orbital-scale climate change. A series of idealised Heinrich events were also simulated, but no changes to aerosols or vegetation were prescribed. This paper focuses on high latitudes and inter-hemispheric linkages. The simulations reproduce polar temperature trends well compared to ice-core reconstructions, although the magnitude is underestimated. Polar amplification varies with obliquity, but this variability is dampened by including variations in land ice coverage, while the overall amplification factor increases. The relatively constant amplification of Antarctic temperatures (with ice-sheet forcing included) suggests it is possible to use Antarctic temperature reconstructions to estimate global changes (which are roughly half the magnitude). Atlantic Ocean overturning circulation varies considerably only with the introduction of Northern Hemisphere ice sheets, but only weakens in the North Atlantic in the deep glacial, when ocean–sea-ice feedbacks result in the movement of the region of deep convection to lower latitudes and with the introduction of freshwater to the surface North Atlantic in order to simulate Heinrich events.

Impact of oceanic processes on the carbon cycle during the last termination

During the last termination (from ~18 000 years ago to ~9000 years ago), the climate significantly warmed and the ice sheets melted. Simultaneously, atmospheric CO2 increased from ~190 ppm to ~260 ppm. Although this CO2 rise plays an important role in the deglacial warming, the reasons for its evolution are difficult to explain. Only box models have been used to run transient simulations of this carbon cycle transition, but by forcing the model with data constrained scenarios of the evolution of temperature, sea level, sea ice, NADW formation, Southern Ocean vertical mixing and biological carbon pump. More complex models (including GCMs) have investigated some of these mechanisms but they have only been used to try and explain LGM versus present day steady-state climates. In this study we use a coupled climate-carbon model of intermediate complexity to explore the role of three oceanic processes in transient simulations: the sinking of brines, stratification-dependent diffusion and iron fertilization. Carbonate compensation is accounted for in these simulations. We show that neither iron fertilization nor the sinking of brines alone can account for the evolution of CO2, and that only the combination of the sinking of brines and interactive diffusion can simultaneously simulate the increase in deep Southern Ocean δ13C. The scenario that agrees best with the data takes into account all mechanisms and favours a rapid cessation of the sinking of brines around 18 000 years ago, when the Antarctic ice sheet extent was at its maximum. In this scenario, we make the hypothesis that sea ice formation was then shifted to the open ocean where the salty water is quickly mixed with fresher water, which prevents deep sinking of salty water and therefore breaks down the deep stratification and releases carbon from the abyss. Based on this scenario, it is possible to simulate both the amplitude and timing of the long-term CO2 increase during the last termination in agreement with ice core data. The atmospheric δ13C appears to be highly sensitive to changes in the terrestrial biosphere, underlining the need to better constrain the vegetation evolution during the termination.

[Global climate] global aerosols [in state of the climate in 2008]

The global mean temperature in 2008 was slightly cooler than that in 2007; however, it still ranks within the 10 warmest years on record. Annual mean temperatures were generally well above average in South America, northern and southern Africa, Iceland, Europe, Russia, South Asia, and Australia. In contrast, an exceptional cold outbreak occurred during January across Eurasia and over southern European Russia and southern western Siberia. There has been a general increase in land-surface temperatures and in permafrost temperatures during the last several decades throughout the Arctic region, including increases of 1° to 2°C in the last 30 to 35 years in Russia. Record setting warm summer (JJA) air temperatures were observed throughout Greenland. The year 2008 was also characterized by heavy precipitation in a number of regions of northern South America, Africa, and South Asia. In contrast, a prolonged and intense drought occurred during most of 2008 in northern Argentina, Paraguay, Uruguay, and southern Brazil, causing severe impacts to agriculture and affecting many communities. The year began with a strong La Niña episode that ended in June. Eastward surface current anomalies in the tropical Pacific Ocean in early 2008 played a major role in adjusting the basin from strong La Niña conditions to ENSO-neutral conditions by July–August, followed by a return to La Niña conditions late in December. The La Niña conditions resulted in far-reaching anomalies such as a cooling in the central tropical Pacific, Arctic Ocean, and the regions extending from the Gulf of Alaska to the west coast of North America; changes in the sea surface salinity and heat content anomalies in the tropics; and total column water vapor, cloud cover, tropospheric temperature, and precipitation patterns typical of a La Niña. Anomalously salty ocean surface salinity values in climatologically drier locations and anomalously fresh values in rainier locations observed in recent years generally persisted in 2008, suggesting an increase in the hydrological cycle. The 2008 Atlantic hurricane season was the 14th busiest on record and the only season ever recorded with major hurricanes each month from July through November. Conversely, activity in the northwest Pacific was considerably below normal during 2008. While activity in the north Indian Ocean was only slightly above average, the season was punctuated by Cyclone Nargis, which killed over 145,000 people; in addition, it was the seventh-strongest cyclone ever in the basin and the most devastating to hit Asia since 1991. Greenhouse gas concentrations continued to rise, increasing by more than expected based on with CO2 the 1979 to 2007 trend. In the oceans, the global mean uptake for 2007 is estimated to be 1.67 Pg-C, about CO2 0.07 Pg-C lower than the long-term average, making it the third-largest anomaly determined with this method since 1983, with the largest uptake of carbon over the past decade coming from the eastern Indian Ocean. Global phytoplankton chlorophyll concentrations were slightly elevated in 2008 relative to 2007, but regional changes were substantial (ranging to about 50%) and followed long-term patterns of net decreases in chlorophyll with increasing sea surface temperature. Ozone-depleting gas concentrations continued to fall globally to about 4% below the peak levels of the 2000–02 period. Total column ozone concentrations remain well below pre-1980, levels and the 2008 ozone hole was unusually large (sixth worst on record) and persistent, with low ozone values extending into the late December period. In fact the polar vortex in 2008 persisted longer than for any previous year since 1979. Northern Hemisphere snow cover extent for the year was well below average due in large part to the record-low ice extent in March and despite the record-maximum coverage in January and the shortest snow cover duration on record (which started in 1966) in the North American Arctic. Limited preliminary data imply that in 2008 glaciers continued to lose mass, and full data for 2007 show it was the 17th consecutive year of loss. The northern region of Greenland and adjacent areas of Arctic Canada experienced a particularly intense melt season, even though there was an abnormally cold winter across Greenland's southern half. One of the most dramatic signals of the general warming trend was the continued significant reduction in the extent of the summer sea-ice cover and, importantly, the decrease in the amount of relatively older, thicker ice. The extent of the 2008 summer sea-ice cover was the second-lowest value of the satellite record (which started in 1979) and 36% below the 1979–2000 average. Significant losses in the mass of ice sheets and the area of ice shelves continued, with several fjords on the northern coast of Ellesmere Island being ice free for the first time in 3,000–5,500 years. In Antarctica, the positive phase of the SAM led to record-high total sea ice extent for much of early 2008 through enhanced equatorward Ekman transport. With colder continental temperatures at this time, the 2007–08 austral summer snowmelt season was dramatically weakened, making it the second shortest melt season since 1978 (when the record began). There was strong warming and increased precipitation along the Antarctic Peninsula and west Antarctica in 2008, and also pockets of warming along coastal east Antarctica, in concert with continued declines in sea-ice concentration in the Amundsen/Bellingshausen Seas. One significant event indicative of this warming was the disintegration and retreat of the Wilkins Ice Shelf in the southwest peninsula area of Antarctica.

Molecular insights into aggregates made of amphiphilic Fmoc-tetrapeptides

Pre-assembled aggregates made of Fmoc-conjugated RGDS and GRDS peptides, where Fmoc refers to fluorenylmethoxycarbonyl, have been investigated using atomistic molecular dynamics simulations. The structural characteristics of twelve different models involving two sheets packed with the Fmoc-aligned or with the charged side groups oriented face-to-face, each one containing seven explicit peptide molecules arranged in parallel or antiparallel, have been evaluated for each Fmoc-tetrapeptide. Structural criteria have been used to select the preferred assembly for each Fmoc-tetrapeptide. The two peptides have been found to prefer b-sheet assemblies with a parallel configuration under simulated low concentration conditions. Furthermore, the assembly is dominated by the interactions among Fmoc units. The overall results provide a complete atomistic view of the interactions between Fmoc-peptide molecules comprised within the same sheet or in different sheets that was not achieved experimentally.

New RGD-peptide amphiphile mixtures containing a negatively charged diluent

Here, we studied the self-assembly of two peptide amphiphiles, C16-Gly-Gly-Gly-Arg-Gly- Asp (PA 1: C16-GGG-RGD) and C16-Gly-Gly-Gly-Arg-Gly-Asp-Ser (PA 2: C16-GGG-RGDS).We showed that PA 1 and PA 2 self-assemble into nanotapes with an internal bilayer structure. C16 chains were highly interdigitated within the nanotape cores, while the peptide blocks formed water-exposed b-sheets too. PA 1 nanotapes were characterized by one spacing distribution, corresponding to a more regular internal structure than that of PA 2 nanotapes, which presented two different spacing distributions. We showed that it is possible to obtain homogeneous nanotapes in water by co-assembling PA 1 or PA 2 with the negatively charged diluent C16-Glu-Thr-Thr-Glu- Ser (PA 3: C16-ETTES). The homogeneous tapes formed by PA 1–PA 3 or PA 2–PA 3 mixtures presented a structure similar to that observed for the corresponding pure PA 1 or PA 2 nanotapes. The mixed nanotapes, which were able to form a stabilized matrix containing homogeneously distributed cell adhesive RGD groups, represent promising materials for designing new cell adhesion substrates.

The ESA climate change initiative: satellite data records for essential climate variables

Observations of Earth from space have been made for over 40 years and have contributed to advances in many aspects of climate science. However, attempts to exploit this wealth of data are often hampered by a lack of homogeneity and continuity and by insufficient understanding of the products and their uncertainties. There is, therefore, a need to reassess and reprocess satellite datasets to maximize their usefulness for climate science. The European Space Agency has responded to this need by establishing the Climate Change Initiative (CCI). The CCI will create new climate data records for (currently) 13 essential climate variables (ECVs) and make these open and easily accessible to all. Each ECV project works closely with users to produce time series from the available satellite observations relevant to users' needs. A climate modeling users' group provides a climate system perspective and a forum to bring the data and modeling communities together. This paper presents the CCI program. It outlines its benefit and presents approaches and challenges for each ECV project, covering clouds, aerosols, ozone, greenhouse gases, sea surface temperature, ocean color, sea level, sea ice, land cover, fire, glaciers, soil moisture, and ice sheets. It also discusses how the CCI approach may contribute to defining and shaping future developments in Earth observation for climate science.

Climate and CO2 controls on global vegetation distribution at the last glacial maximum: analysis based on palaeovegetation data, biome modelling and palaeoclimate simulations.

The global vegetation response to climate and atmospheric CO2 changes between the last glacial maximum and recent times is examined using an equilibrium vegetation model (BIOME4), driven by output from 17 climate simulations from the Palaeoclimate Modelling Intercomparison Project. Features common to all of the simulations include expansion of treeless vegetation in high northern latitudes; southward displacement and fragmentation of boreal and temperate forests; and expansion of drought-tolerant biomes in the tropics. These features are broadly consistent with pollen-based reconstructions of vegetation distribution at the last glacial maximum. Glacial vegetation in high latitudes reflects cold and dry conditions due to the low CO2 concentration and the presence of large continental ice sheets. The extent of drought-tolerant vegetation in tropical and subtropical latitudes reflects a generally drier low-latitude climate. Comparisons of the observations with BIOME4 simulations, with and without consideration of the direct physiological effect of CO2 concentration on C3 photosynthesis, suggest an important additional role of low CO2 concentration in restricting the extent of forests, especially in the tropics. Global forest cover was overestimated by all models when climate change alone was used to drive BIOME4, and estimated more accurately when physiological effects of CO2 concentration were included. This result suggests that both CO2 effects and climate effects were important in determining glacial-interglacial changes in vegetation. More realistic simulations of glacial vegetation and climate will need to take into account the feedback effects of these structural and physiological changes on the climate.

Radiative forcing effect of ice-age dust

During glacial periods, dust deposition rates and inferred atmospheric concentrations were globally much higher than present. According to recent model results, the large enhancement of atmospheric dust content at the last glacial maximum (LGM) can be explained only if increases in the potential dust source areas are taken into account. Such increases are to be expected, due to effects of low precipitation and low atmospheric (CO2) on plant growth. Here the modelled three-dimensional dust fields from Mahowald et al. and modelled seasonally varying surface-albedo fields derived in a parallel manner, are used to quantify the mean radiative forcing due to modern (non-anthropogenic) and LGM dust. The effect of mineralogical provenance on the radiative properties of the dust is taken into account, as is the range of optical properties associated with uncertainties about the mixing state of the dust particles. The high-latitude (poleward of 45°) mean change in forcing (LGM minus modern) is estimated to be small (–0.9 to +0.2 W m–2), especially when compared to nearly –20 W m–2 due to reflection from the extended ice sheets. Although the net effect of dust over ice sheets is a positive forcing (warming), much of the simulated high-latitude dust was not over the ice sheets, but over unglaciated regions close to the expanded dust source region in central Asia. In the tropics the change in forcing is estimated to be overall negative, and of similarly large magnitude (–2.2 to –3.2 W m–2) to the radiative cooling effect of low atmospheric (CO2). Thus, the largest long-term climatic effect of the LGM dust is likely to have been a cooling of the tropics. Low tropical sea-surface temperatures, low atmospheric (CO2) and high atmospheric dust loading may be mutually reinforcing due to multiple positive feedbacks, including the negative radiative forcing effect of dust.

Solar cycle evolution of dipolar and pseudostreamer belts and their relation to the slow solar wind

Dipolar streamers are coronal structures formed by open solar flux converging from coronal holes of opposite polarity. Thus the dipolar streamer belt traces the coronal foot print of the heliospheric current sheet (HCS), and it is strongly associated with the origin of slow solar wind. Pseudostreamers, on the other hand, separate converging regions of open solar flux from coronal holes of the same polarity and do not contain current sheets. They have recently received a great deal of interest as a possible additional source of slow solar wind. Here we add to that growing body of work by using the potential-field source-surface model to determine the occurrence and location of dipolar and pseudostreamers over the last three solar cycles. In addition to providing new information about pseudostreamer morphology, the results help explain why the observations taken during the first Ulysses perihelion pass in 1995 showed noncoincidence between dipolar streamer belt and the locus of slowest flow. We find that Carrington rotation averages of the heliographic latitudes of dipolar and pseudostreamer belts are systematically shifted away from the equator, alternately in opposite directions, with a weak solar cycle periodicity, thus keeping slow wind from the web of combined streamer belts approximately symmetric about the equator. The largest separation of dipolar and pseudostreamer belts occurred close to the Ulysses pass, allowing a unique opportunity to see that slow wind from pseudostreamer belts north of the southward-displaced dipolar belt was responsible for the noncoincident pattern.