Objectivity, Proximity and Adaptability in Corporate Governance

Countries appear to differ considerably in the basic orientations of their corporate governance structures. We postulate the trade-off between objectivity and proximity as fundamental to the corporate governance debate. We stress the value of objectivity that comes with distance (e.g. the market oriented U.S. system), and the value of better information that comes with proximity (e.g. the more intrusive Continental European model). Our key result is that the optimal distance between management and monitor (board or shareholders) has a bang-bang solution: either one should capitalize on the better information that comes with proximity or one should seek to benefit optimally from the objectivity that comes with distance. We argue that this result points at an important link between the optimal corporate governance arrangement and industry structure. In this context, we also discuss the ways in which investors have "contracted around" the flaws in their own corporate governance systems, pointing at the adaptability of different arrangements.http://deepblue.lib.umich.edu/bitstream/2027.42/39651/3/wp266.pd

Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.http://deepblue.lib.umich.edu/bitstream/2027.42/39841/3/wp457.pd

Effect of compaction pressure on consolidation behaviour of unsaturated silty soil

The effect of compaction pressure on subsequent soil behaviour during isotropic consolidation has been investigated by conducting controlled-suction triaxial tests on samples of an unsaturated compacted silty soil. A comprehensive set of laboratory experiments was carried out in a double-walled triaxial apparatus on samples of unsaturated soil that were prepared using two different compaction pressures. The axis translation technique was used for creating the desired suctions in the samples. In the experiments, the soil samples were subjected to isotropic consolidation under constant suctions. The results show that different compaction pressures produce different fabrics in a soil and therefore affect the behaviour of the soil. The results also show that the value of yield stress and the location of the loading¿collapse (LC) yield curve are functions of soil fabric. Furthermore, it is shown that the slopes of normal consolidation lines for densely and loosely compacted samples differ in unsaturated conditions but are the same in saturated soils. A comparison is made between the behaviour of the dense and loose samples, and the difference in the behaviour is explained

Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.coordination, credit ratings, multiple equilibria

Restructuring in the banking industry with implications for Europe

Set against the background of a rapidly consolidating financial sector, this paper explores the main forces that are driving this process. Acknowledging that the search for scale and scope economies is one of them, the paper emphasises that the empirical evidence in support of such economies is mixed, at best; while scale and scope economies exist, in principle, they are difficult to attain in practice. The paper considers strategic positioning in an uncertain and rapidly changing environment a more important factor: by expanding scope (and scale), financial institutions acquire options to venture into new activities. An implication of this strategic-option explanation is that consolidation, scope expansion in particular, will partially unravel as and when uncertainty declines and competition forces financial institutions to discover their true competitive advantages

'Trust is good, control is better': the 1974 Herstatt-Bank crisis and its implications for international regulatory reform

With its international supervisory and regulatory implications, the failure of Bankhaus Herstatt is one of the landmarks of post-war financial history. This article offers the first comprehensive historical account of the Herstatt crisis, and contributes to the wider discussions on international supervisory and regulatory reform since the mid-1970s, including regulatory capture, markets' self-regulation and resolution of failed banks. In doing so, it first argues that contrary to a widely held view, the German authorities received early and repeated warnings about Herstatt's dealings but this involved only limited and ineffective regulatory/supervisory responses, then it turns to the actual collapse of the bank in June 1974, and finally explores the wider regulatory issues raised by the Herstatt case

Burosumab therapy in children with x-linked hypophosphatemia

BACKGROUND X-linked hypophosphatemia is characterized by increased secretion of fibroblast growth factor 23 (FGF-23), which leads to hypophosphatemia and consequently rickets, osteomalacia, and skeletal deformities. We investigated burosumab, a monoclonal antibody that targets FGF-23, in patients with X-linked hypophosphatemia. METHODS In an open-label, phase 2 trial, we randomly assigned 52 children with X-linked hypophosphatemia, in a 1:1 ratio, to receive subcutaneous burosumab either every 2 weeks or every 4 weeks; the dose was adjusted to achieve a serum phosphorus level at the low end of the normal range. The primary end point was the change from baseline to weeks 40 and 64 in the Thacher rickets severity total score (ranging from 0 to 10, with higher scores indicating greater disease severity). In addition, the Radiographic Global Impression of Change was used to evaluate rachitic changes from baseline to week 40 and to week 64. Additional end points were changes in pharmacodynamic markers, linear growth, physical ability, and patient-reported outcomes and the incidence of adverse events. RESULTS The mean Thacher rickets severity total score decreased from 1.9 at baseline to 0.8 at week 40 with every-2-week dosing and from 1.7 at baseline to 1.1 at week 40 with every-4-week dosing (P<0.001 for both comparisons); these improvements persisted at week 64. The mean serum phosphorus level increased after the first dose in both groups, and more than half the patients in both groups had levels within the normal range (3.2 to 6.1 mg per deciliter [1.0 to 2.0 mmol per liter]) by week 6. Stable serum phosphorus levels were maintained through week 64 with every-2-week dosing. Renal tubular phosphate reabsorption increased from baseline in both groups, with an overall mean increase of 0.98 mg per deciliter (0.32 mmol per liter). The mean dose of burosumab at week 40 was 0.98 mg per kilogram of body weight with every-2-week dosing and 1.50 mg per kilogram with every-4-week dosing. Across both groups, the mean serum alkaline phosphatase level decreased from 459 U per liter at baseline to 369 U per liter at week 64. The mean standing-height z score increased in both groups, with greater improvement seen at all time points with every-2-week dosing (an increase from baseline of 0.19 at week 64) than with every-4-week dosing (an increase from baseline of 0.12 at week 64). Physical ability improved and pain decreased. Nearly all the adverse events were mild or moderate in severity. CONCLUSIONS In children with X-linked hypophosphatemia, treatment with burosumab improved renal tubular phosphate reabsorption, serum phosphorus levels, linear growth, and physical function and reduced pain and the severity of rickets

The adrenocortical response to synthetic ACTH following a trek to high altitude

Background: Gradual ascent to high altitude is typically associated with reduced resting aldosterone and unchanged cortisol, features that may facilitate acclimatization but are poorly understood. Aims: To investigate the cortisol and aldosterone response to adrenocorticotrophic hormone at altitude. Methods: Eleven subjects underwent a 250 µg short synacthen test at sea-level and again after trekking to 3600 m in Nepal. Cortisol and aldosterone were measured by conventional assay from blood samples taken immediately prior to the administration of synacthen (T0) and then 30 (T30) and 60 (T60) minutes later. Results: At 3600 m resting basal cortisol and aldosterone levels were both significantly lower than they were at sea-level (p=0.004, p=0.003 respectively). Cortisol values at T30 and T60 were no different between sea-level and 3600 m but the increment after synacthen was significantly (p=0.041) greater at 3600 m due to a lower basal value. Aldosterone at T30 and T60 was significantly lower (p=0.003 for both) at 3600 m than at sea-level and the increment following synacthen was also significantly (p=0.003) less at 3600 m. Conclusions: At 3600 m there appears to be a divergent adrenal response to synthetic adrenocorticotrophic hormone with an intact cortisol response but a reduced aldosterone response, relative to sea-level. This may reflect a specific effect of hypoxia on aldosterone synthesis and may be beneficial to acclimatization

Superoxide dismutase downregulation in osteoarthritis progression and end-stage disease

Oxidative stress is proposed as an important factor in osteoarthritis (OA). To investigate the expression of the three superoxide dismutase (SOD) antioxidant enzymes in OA. SOD expression was determined by real-time PCR and immunohistochemistry using human femoral head cartilage. SOD2 expression in Dunkin–Hartley guinea pig knee articular cartilage was determined by immunohistochemistry. The DNA methylation status of the SOD2 promoter was determined using bisulphite sequencing. RNA interference was used to determine the consequence of SOD2 depletion on the levels of reactive oxygen species (ROS) using MitoSOX and collagenases, matrix metalloproteinase 1 (MMP-1) and MMP-13, gene expression. All three SOD were abundantly expressed in human cartilage but were markedly downregulated in end-stage OA cartilage, especially SOD2. In the Dunkin–Hartley guinea pig spontaneous OA model, SOD2 expression was decreased in the medial tibial condyle cartilage before, and after, the development of OA-like lesions. The SOD2 promoter had significant DNA methylation alterations in OA cartilage. Depletion of SOD2 in chondrocytes increased ROS but decreased collagenase expression. This is the first comprehensive expression profile of all SOD genes in cartilage and, importantly, using an animal model, it has been shown that a reduction in SOD2 is associated with the earliest stages of OA. A decrease in SOD2 was found to be associated with an increase in ROS but a reduction of collagenase gene expression, demonstrating the complexities of ROS function

Implementation of the participatory approach for supervisors to prevent sick leave: a process evaluation

To perform a process evaluation of a multifaceted strategy to implement the participatory approach for supervisors to prevent sick leave in three organisations. The implementation strategy incorporated a working group meeting with stakeholder representatives, supervisor training, and optional supervisor coaching. Context, recruitment, reach, dose delivered, dose received, fidelity, and satisfaction with the strategy were assessed at organisational and supervisor level using questionnaires and registration forms. At least 4 out of 6 stakeholders were represented in the working group meetings, and 11 % (n = 116) of supervisors could be reached. The working group meetings and supervisor training were delivered and received as planned and were well appreciated within all three organisations. Three supervisors made use of coaching. At 6-month follow-up, 11 out of 41 supervisors (27 %) indicated that they had applied the participatory approach at least one time. The implementation strategy was largely carried out as intended. However, reach of both supervisors and department managers should be improved. Future studies should consider targeting employees with the strategy