Albert Einstein with Judge Irving Lehmann; Port Chester, New York Portraits Groups; Men

Digital Image

Port of Eilat Coin

Obverse: Silver 5 Lirot coin. Reverse: A stylized lighthouse, the seawall, stylized inscription.

Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Multi power port converter for hybrid electric vehicles using multi phase bidirectional fly-back topology

For hybrid electric vehicles the batteries and the drive dc-link may be at different voltages. The batteries are at low voltage to obtain higher volumetric efficiencies and the dc-link is at higher voltage to have higher efficiency on the motor side. Therefore a power interface between the batteries and the drive's dc-link is essential. This power interface should handle power flow from battery to motor, motor to battery, external genset to battery and grid to battery. This paper proposes a multi power port topology which is capable of handling multiple power sources and still maintains simplicity and features like obtaining any gain, wide load variations, lower output current ripple and capability of parallel battery energy due to the modular structure. The development and testing of a bi-directional fly-back DC-DC converter for hybrid electric vehicle is described in this paper. Simple hysteresis voltage control is used for DC link voltage regulation. The experimental results are presented to show the working of the proposed converter.

Credit Default Swaps and Insurance: Against the Potts Opinion

Little attention has been given to the possibility that CDS transactions might be construed as insurance contracts in English law. This article challenges the widespread “Potts opinion”, which states that CDSs are not insurance, because they do not require the protection buyer to sustain a loss or to have an insurable interest in the subject matter. CDSs often do provide protection against loss that the buyer is exposed to; loss indemnity is not a necessary characterisation of an insurance contract; insurable interest does not form part of the definition of insurance, but is an additional requirement of valid insurance; and what matters is the substance not the form of the contract. The situation in the US and Australia is also briefly considered.

Application of nonlinear filtering to credit risk

Merton's model views equity as a call option on the asset of the firm. Thus the asset is partially observed through the equity. Then using nonlinear filtering an explicit expression for likelihood ratio for underlying parameters in terms of the nonlinear filter is obtained. As the evolution of the filter itself depends on the parameters in question, this does not permit direct maximum likelihood estimation, but does pave the way for the `Expectation-Maximization' method for estimating parameters. (C) 2010 Elsevier B.V. All rights reserved.

New Ventures’ influence on the Growth of SME Employment, Production and Exports in India: Does Institutional Credit matter?

New ventures are considered to be a major source of small firm growth. In Indian context the contribution of new ventures in terms of new employment, production and exports has largely remained unexplored. It is equally important and unexplored, the significance of the contribution of bank credit to the growth of new ventures in India. This paper is an attempt to throw light on these two aspects. The research is based on secondary data of the liberalized period provided by Ministry of Micro, Small and Medium Enterprises, Government of India and Reserve Bank of India. To analyze the influence of bank credit growth on new ventures and the influence of new ventures on growth of additional employment, additional production and additional exports, we used a Bi-Variate Vector Auto Regression. Based on the model generated, Granger causality tests are conducted to obtain the results. The study found that rate of growth of bank credit causes the number of new ventures, implying any increase in the rate of growth of bank credit will be beneficial to the growth of new ventures. The study also concluded that new ventures are not causing the growth of additional employment or additional production. However new ventures cause the growth of additional exports. This is reasonable as entrepreneurs start their new ventures with minimum possible employment and relatively low rate of capacity utilization and they come up to take advantage of the process of globalization by catering to the international market.

Geoarchaeological Evidence of a Chola-Period Tsunami from an Ancient Port at Kaveripattinam on the Southeastern Coast of India

Literature of the ancient Chola Dynasty (A.D. 9th-11th centuries) of South India and recent archaeological excavations allude to a sea flood that crippled the ancient port at Kaveripattinam, a trading hub for Southeast Asia, and probably affected the entire South Indian coast, analogous to the 2004 Indian Ocean tsunami impact. We present sedimentary evidence from an archaeological site to validate the textual references to this early medieval event. A sandy layer showing bed forms representing high-energy conditions, possibly generated by a seaborne wave, was identified at the Kaveripattinam coast of Tamil Nadu, South India. Its sedimentary characteristics include hummocky cross-stratification, convolute lamination with heavy minerals, rip-up clasts, an erosional contact with the underlying mud bed, and a landward thinning geometry. Admixed with 1000-year-old Chola period artifacts, it provided an optically stimulated luminescence age of 1091 perpendicular to 66 yr and a thermoluminescence age of 993 perpendicular to 73 yr for the embedded pottery sherds. The dates of these proxies converge around 1000 yr B. P., correlative of an ancient tsunami reported from elsewhere along the Indian Ocean coasts. (C) 2011 Wiley Periodicals, Inc.