Optimal regulation of a fully insured deposit banking system

We analyze risk sensitive incentive compatible deposit insurancein the presence of private information when the market value of depositinsurance can be determined using Merton's (1997) formula. We show that,under the assumption that transferring funds from taxpayers to financialinstitutions has a social cost, the optimal regulation combines differentlevels of capital requirements combined with decreasing premia on depositinsurance. On the other hand, it is never efficient to require the banksto hold riskless assets, so that narrow banking is not efficient. Finally,chartering banks is necessary in order to decrease the cost of asymmetricinformation.

Designing institutions for financial stability: Regulation and supervision by objective for the Euro area

In this paper, we discuss pros and cons ofdifferent models for financial market regulationand supervision and we present a proposal forthe re-organisation of regulatory and supervisoryagencies in the Euro Area. Our arguments areconsistent with both new theories and effectivebehaviour of financial intermediaries inindustrialized countries. Our proposed architecturefor financial market regulation is based on theassignment of different objectives or "finalities"to different authorities, both at the domesticand the European level. According to thisperspective, the three objectives of supervision- microeconomic stability, investor protectionand proper behaviour, efficiency and competition- should be assigned to three distinct Europeanauthorities, each one at the centre of a Europeansystem of financial regulators and supervisorsspecialized in overseeing the entire financialmarket with respect to a single regulatoryobjective and regardless of the subjective natureof the intermediaries. Each system should bestructured and organized similarly to the EuropeanSystem of Central Banks and work in connectionwith the central bank which would remain theinstitution responsible for price and macroeconomicstability. We suggest a plausible path to buildour 4-peak regulatory architecture in the Euro area.

Regulation of the expression of Fit insect toxin locus genes in the root-associated biocontrol pseudomonad CHA0

The root-colonizing Pseudomonas fluorescens strain CHA0 is a biocontrol agent of soil-borne plant diseases caused by fungal and oomycete pathogens. Remarkably, this plant-beneficial pseudomonad is also endowed with potent insecticidal activity that depends on the production of a large protein toxin termed Fit (for P. fluorescens insecticidal toxin). In our present work, the genomic locus encoding the P. fluorescens insect toxin is subjected to a detailed molecular analysis. The Fit toxin gene fitD is flanked upstream by the fitABC genes and downstream by the fitE gene that encode the ABC transporter, membrane fusion, and outer membrane efflux components of a type I protein secretion system predicted to function in toxin export. The fitF, fitG, and fitH genes located downstream of fitE code for regulatory proteins having domain structures typical of signal transduction histidine kinases, LysR-type transcriptional regulators, and response regulators, respectively. The role of these insect toxin locus-associated control elements is being investigated with mutants defective for the regulatory genes and with GFP-based reporter fusions to putative promoter regions upstream of the transporter genes fitA and fitE, the toxin gene fitD, and the regulatory genes fitF and fitH. Our preliminary findings suggest that the three regulators interact with known global regulators of biocontrol factor expression to control Fit toxin expression and secretion.

Quality safeguards and regulation of online pharmacies

Using econometric evidence, this article confirms that distribution ofmedicines online is split into two market segments of very diversequality, and identifies the factors that drive quality and qualityassurance in this activity. Unlike fraudulent, rogue, websites, whichoffer scant guarantees and usually sell just a few medicines withoutprescription, online pharmacies offering insurance coverage and linkedto conventional pharmacies typically sell a wholerange of drugs, require third-party medical prescriptions and provideabundant information to patients. It is shown that, where onlinepharmacies are allowed to act legally, market forces enhance quality,as private insurers require professional standards, and specialized thirdparties make a business of certifying them. Furthermore, older onlinepharmacies and those running conventional operations offer higherquality, probably because of reputational investments. Overall, this evidence supports licensing online pharmacies, especiallyconsidering that prohibiting them is ineffective against fraudulent sites.

Protection from lethal gram-negative bacterial sepsis by targeting Toll-like receptor 4.

Toll-like receptor 4 (TLR4), the signal-transducing molecule of the LPS receptor complex, plays a fundamental role in the sensing of LPS from gram-negative bacteria. Activation of TLR4 signaling pathways by LPS is a critical upstream event in the pathogenesis of gram-negative sepsis, making TLR4 an attractive target for novel antisepsis therapy. To validate the concept of TLR4-targeted treatment strategies in gram-negative sepsis, we first showed that TLR4(-/-) and myeloid differentiation primary response gene 88 (MyD88)(-/-) mice were fully resistant to Escherichia coli-induced septic shock, whereas TLR2(-/-) and wild-type mice rapidly died of fulminant sepsis. Neutralizing anti-TLR4 antibodies were then generated using a soluble chimeric fusion protein composed of the N-terminal domain of mouse TLR4 (amino acids 1-334) and the Fc portion of human IgG1. Anti-TLR4 antibodies inhibited intracellular signaling, markedly reduced cytokine production, and protected mice from lethal endotoxic shock and E. coli sepsis when administered in a prophylactic and therapeutic manner up to 13 h after the onset of bacterial sepsis. These experimental data provide strong support for the concept of TLR4-targeted therapy for gram-negative sepsis.

Price regulation of plastic money: A critical assessment of Spanish rules

Recent decisions by the Spanish national competition authority (TDC) mandate paymentsystems to include only two costs when setting their domestic multilateral interchange fees(MIF): a fixed processing cost and a variable cost for the risk of fraud. This artificiallowering of MIFs will not lower consumer prices, because of uncompetitive retailing; but itwill however lead to higher cardholders fees and, likely, new prices for point of saleterminals, delaying the development of the immature Spanish card market. Also, to the extent that increased cardholders fees do not offset the fall in MIFs revenue, the task of issuing new cards will be underpaid relatively to the task of acquiring new merchants, causing an imbalance between the two sides of the networks. Moreover, the pricing scheme arising from the decisions will cause unbundling and underprovision of those services whose costs are excluded. Indeed, the payment guarantee and the free funding period will tend to be removed from the package of services currently provided, to be either provided by third parties, by issuers for a separate fee, or not provided at all, especially to smaller and medium-sized merchants. Transaction services will also suffer the consequences that the TDC precludes pricing them in variable terms.

Mouse mammary tumor virus : a model system for regulation of gene expression

Mouse mammary tumor virus (MMTV) kommt prizipiell in zwei Formen vor. Erstens als integierte virale DNA (endogen vererbt), die in allen Zellen der Maus enthalten ist und zweitens als infektiöse Form, bei der sich die DNA nur im Kern von Brustdrüsenzellen integriert. Die erste Form verhält sich wie ein stummes Gen während die zweite Form aktiv ist, durch Glukocorticoide stimuliert wird und zum Mamma-Karzinom führt. Wir haben beide Typen von viralen Genen molekular geklont und durch Transfektion in verschiedene Zellen in Gewebekultur eingeführt. Wir konnten zeigen, dass sowohl die endogene DNA, wie dir infektiöse DNA in transfektieren Zellen aktiv ist und dass die Expression beider Gene durch Glukocorticoide stimuliert wird. Wir konnten die DNA Squenzen, die für dir Homonstimulierung nötig sind, in einem kleinen Fragment der viralen DNA lokalisieren. Bei der Sequenzanalyse dieses DNA-Stückes haben wir ein neues virales Gen entdeckt, das dir Information für ein Protein von ca. 40000 Moleklargewicht enthählt. Mit Hilfe eines Antikörpers suchen wir in verschiedenen Brustdrüsenzellen und Tumoren nach diesem Proetin, dessen Funktion noch nicht bekannt ist.

Chronic wound healing by fetal cell therapy may be explained by differential gene profiling observed in fetal versus old skin cells.

Engineering of fetal tissue has a high potential for the treatment of acute and chronic wounds of the skin in humans as these cells have high expansion capacity under simple culture conditions and one organ donation can produce Master Cell Banks which can fabricate over 900 million biological bandages (9 x 12cm). In a Phase 1 clinical safety study, cases are presented for the treatment of therapy resistant leg ulcers. All eight patients, representing 13 ulcers, tolerated multiple treatments with fetal biological bandages showing no negative secondary effects and repair processes similar to that seen in 3rd degree burns. Differential gene profiling using Affymetrix gene chips (analyzing 12,500 genes) were accomplished on these banked fetal dermal skin cells compared to banked dermal skin cells of an aged donor in order to point to potential indicators of wound healing. Families of genes involved in cell adhesion and extracellular matrix, cell cycle, cellular signaling, development and immune response show significant differences in regulation between banked fetal and those from banked old skin cells: with approximately 47.0% of genes over-expressed in fetal fibroblasts. It is perhaps these differences which contribute to efficient tissue repair seen in the clinic with fetal cell therapy.

Regulation of endothelial cell integrin function and angiogenesis by COX-2, cAMP and Protein Kinase A.

Angiogenesis, the development of new blood vessels from preexisting vessels, is a key step in tumor growth, invasion and metastasis formation. Inhibition of tumor angiogenesis is considered as an attractive approach to suppress cancer progression and spreading. Adhesion receptors of the integrin family promote tumor angiogenesis by mediating cell migration, proliferation and survival of angiogenic endothelial cells. Integrins up regulated and highly expressed on neovascular endothelial cells, such as alphaVbeta3 and alpha5beta1, have been considered as relevant targets for anti-angiogenic therapies. Small molecular integrin antagonists or blocking antibodies suppress angiogenesis and tumor progression in many animal models, and some of them are currently being tested in cancer clinical trials as anti-angiogenic agents. COX-2 inhibitors exert anti-cancer effects, at least in part, by inhibiting tumor angiogenesis. We have recently shown that COX-2 inhibitors suppress endothelial cell migration and angiogenesis by preventing alphaVbeta3-mediated and cAMP/PKA-dependent activation of the small GTPases Rac and Cdc42. Here we will review the evidence for the involvement of vascular integrins in mediating angiogenesis and the role of COX-2 metabolites in modulating the cAMP/Protein Kinase A pathway and alphaVbeta3-dependent Rac activation in endothelial cells.

Three small RNAs jointly ensure secondary metabolism and biocontrol in Pseudomonas fluorescens CHA0.

In many Gram-negative bacteria, the GacS/GacA two-component system positively controls the expression of extracellular products or storage compounds. In the plant-beneficial rhizosphere bacterium Pseudomonas fluorescens CHA0, the GacS/GacA system is essential for the production of antibiotic compounds and hence for biological control of root-pathogenic fungi. The small (119-nt) RNA RsmX discovered in this study, together with RsmY and RsmZ, forms a triad of GacA-dependent small RNAs, which sequester the RNA-binding proteins RsmA and RsmE and thereby antagonize translational repression exerted by these proteins in strain CHA0. This small RNA triad was found to be both necessary and sufficient for posttranscriptional derepression of biocontrol factors and for protection of cucumber from Pythium ultimum. The same three small RNAs also positively regulated swarming motility and the synthesis of a quorum-sensing signal, which is unrelated to N-acyl-homoserine lactones, and which autoinduces the Gac/Rsm cascade. Expression of RsmX and RsmY increased in parallel throughout cell growth, whereas RsmZ was produced during the late growth phase. This differential expression is assumed to facilitate fine tuning of GacS/A-controlled cell population density-dependent regulation in P. fluorescens.

Audit quality: Attributes, private safeguards and the role of regulation

This article examines the private mechanisms used to safeguard quality in auditing, with a view to defining rules capable of facilitating the performance of market forces. An outline is given of a general theory of private quality assurance in auditing, based on the use of quasi-rents to self-enforce quality dimensions. Particular attention is paid to the role of fee income diversification as the key ingredient of private incentives for audit quality. The role of public regulation is then situated in the context defined by the presence of these safeguard mechanisms. This helps in defining the content of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. By making sense of the interaction between regulation, quality attributes and private safeguards, the analysis helps to evaluate the relative merits of different regulatory options.

Genetic and hormonal regulation of cambial development.

The stems and roots of most dicot plants increase in diameter by radial growth, due to the activity of secondary meristems. Two types of meristems function in secondary plant body formation: the vascular cambium, which gives rise to secondary xylem and phloem, and the cork cambium, which produces a bark layer that replaces the epidermis and protects the plant stem from mechanical damage and pathogens. Cambial development, the initiation and activity of the vascular cambium, leads to an accumulation of wood, the secondary xylem tissue. The thick, cellulose-rich cell walls of wood provide a source of cellulose and have the potential to be used as a raw material for sustainable and renewable energy production. In this review, we will discuss what is known about the mechanisms regulating the cambium and secondary tissue development.

Drosophila intestinal response to bacterial infection: activation of host defense and stem cell proliferation.

Although Drosophila systemic immunity is extensively studied, little is known about the fly's intestine-specific responses to bacterial infection. Global gene expression analysis of Drosophila intestinal tissue to oral infection with the Gram-negative bacterium Erwinia carotovora revealed that immune responses in the gut are regulated by the Imd and JAK-STAT pathways, but not the Toll pathway. Ingestion of bacteria had a dramatic impact on the physiology of the gut that included modulation of stress response and increased stem cell proliferation and epithelial renewal. Our data suggest that gut homeostasis is maintained through a balance between cell damage due to the collateral effects of bacteria killing and epithelial repair by stem cell division. The Drosophila gut provides a powerful model to study the integration of stress and immunity with pathways associated with stem cell control, and this study should prove to be a useful resource for such further studies.

Post crisis challenges to bank regulation

The current crisis has swept aside not only the whole of the US investment banking industry butalso the consensual perception of banking risks, contagion and their implication for bankingregulation. As everyone agrees now, risks where mispriced, they accumulated in neuralgic pointsof the financial system, and where amplified by procyclical regulation as well as by the instabilityand fragility of financial institutions.The use of ratings as carved in stone and lack of adequate procedure to swiftly deal withsystemic institutions bankruptcy (whether too-big-to-fail, too complex to fail or too-many to fail).The current paper will not deal with the description and analysis of the crisis, already covered inother contributions to this issue will address the critical choice regulatory authorities will face. Inthe future regulation has to change, but it is not clear that it will change in the right direction. Thismay occur if regulatory authorities, possibly influenced by public opinion and political pressure,adopt an incorrect view of financial crisis prevention and management. Indeed, there are twoapproaches to post-crisis regulation. One is the rare event approach, whereby financial crises willoccur infrequently, but are inescapable.