Alternative methods of corporate control in commercial banks

In this article, Stephen Prowse investigates how owners of commercial banks encourage management to follow value-maximizing policies. While the "corporate control mechanism" in nonfinancial firms is well documented, for the banking industry much less evidence is available. Moreover, unique factors in the operating environment of commercial banks may mean that their corporate control mechanism operates differently from that of nonfinancial firms. ; Prowse analyzes a sample of bank holding companies (BHCs) from 1987 to 1992 to determine how many underwent a change in corporate control by hostile takeover, friendly merger, action by the board of directors, or intervention by regulators. Prowse finds that the primary market-based corporate control mechanism among BHCs is action by the board, although bank boards appear to be much less assertive than boards of nonfinancial firms. Overall, the market-based corporate control mechanisms in banks do not appear as efficient at disciplining managers as they are in other firms. By default, this has given a primary role to regulators to provide a "last resort" control mechanism. Prowse analyzes reasons for this and evaluates how proposed banking legislation might affect corporate governance.Banks and banking ; Corporations

Corporate finance in international perspective: legal and regulatory influences on financial system development

In the postwar period, systems of corporate finance and governance have emerged in the United States, Japan, and Germany that are dramatically different from one another. To date, there has been little focus on why. Stephen Prowse argues that differences in three aspects of the legal and regulatory environments in these countries are responsible. First, the severity of legal and regulatory restraints on financial institutions being "active" investors in firms. Second, the degree to which corporate securities markets are suppressed by regulation. Finally, the degree to which securities markets are "passively" suppressed by the absence of mandated disclosure requirements. ; Prowse compares the merits of each system and argues that the U.S. system may be more favorable to the growth of high-technology firms. He discusses the future evolution of each system. The German and Japanese regulatory environments are changing rapidly to increase the role of securities markets in corporate finance. The U.S. environment is also changing to give financial institutions more latitude to be active investors in firms. Over the long term, the regulatory environments of all three countries appear to be converging. The focal point of this convergence is an entirely new environment in which financial institutions are free to be active investors and corporate securities markets are unhindered by regulatory obstacles.Corporations - Finance ; International finance

The economics of private placements : middle-market corporate finance, life insurance companies, and a credit crunch

In this article, Stephen Prowse examines the private placement market. Like the bank loan market, this market is information-intensive: parties negotiate lending terms, lenders evaluate and monitor borrowers' credit risk, covenants are used to control risk, and borrowers lack access to public debt markets. There are also differences from the bank loan market : debt instruments are securities, not loans; maturities are longer; interest rates are fixed, not floating; and the principal investors are life insurance companies not banks. The article provides evidence on the credit crunch that occurred in the below-investment-grade sector of this market in the early 1990s and that apparently continues to this day. Asset-quality problems in 1990 and 1991 focused regulatory, stock market, media, and policyholder attention on the financial solvency of insurers, who withdrew from this sector of the market. The article also examines reasons for the persistence of the crunch.Bank loans ; Interest rates ; Credit

The economics of the private equity market

The private equity market is an important source of funds for start-ups, private middle-market companies, firms in financial distress, and public firms seeking buyout financing. Over the past fifteen years, it has been the fastest growing corporate finance market, far surpassing the public equity and public and private bond markets. In this article, Stephen Prowse examines the economic foundations of the private equity market and describes its institutional structure. He also explores reasons for the market's explosive growth and highlights the main characteristics of that growth, including data on returns to private equity investors. He describes the important investors, intermediaries, and issuers in the market and their interactions with each other. In particular, he investigates how the major intermediary in the market--the limited partnership--addresses the severe information problems associated with investing in small private firms.Capital market ; Financial markets ; Venture capital

Mapping New Zealand and Antarctic snowpack from LANDSAT

Ther are no author-identified significant results in this report

Hedgehog Signalling in Androgen Independent Prostate Cancer

Objectives: Androgen-deprivation therapy effectively shrinks hormone-naïve prostate cancer, both in the prostate and at sites of distant metastasis. However prolonged androgen deprivation generally results in relapse and androgen-independent tumour growth, which is inevitably fatal. The molecular events that enable prostate cancer cells to proliferate in reduced androgen conditions are poorly understood. Here we investigate the role of Hedgehog signalling in androgen-independent prostate cancer (AIPC). Methods: Activity of the Hedgehog signalling pathway was analysed in cultured prostate cancer cells, and circulating prostate tumour cells were isolated from blood samples of patients with AIPC. Results: AIPC cells were derived through prolonged culture in reduced androgen conditions, modelling hormone therapy in patients, and expressed increased levels of Hedgehog signalling proteins. Exposure of cultured AIPC cells to cyclopamine, which inhibits Hedgehog signalling, resulted in inhibition of cancer cell growth. The expression of the Hedgehog receptor PTCH and the highly prostate cancer-specific gene DD3PCA3 was significantly higher in circulating prostate cancer cells isolated from patients with AIPC compared with samples prepared from normal individuals. There was an association between PTCH and DD3PCA3 expression and the length of androgen-ablation therapy. Conclusions: Our data are consistent with reports implicating overactivity of Hedgehog signalling in prostate cancer and suggest that Hedgehog signalling contributes to the androgen-independent growth of prostate cancer cells. As systemic anti-Hedgehog medicines are developed, the Hedgehog pathway will become a potential new therapeutic target in advanced prostate cancer.Peer reviewedFinal Accepted Versio

Detection of TMPRSS2 : ERG fusion gene in circulating prostate cancer cells

Creative Commons Attribution-NonCommercial-Share Alike 3.0 license (CC BY-NC SA)Aim: To investigate the existence of TMPRSS2:ERG fusion gene in circulating tumor cells (CTC) from prostate cancer patients and its potential in monitoring tumor metastasis. Methods: We analyzed the frequency of TMPRSS2: ERG and TMPRSS2:ETV1 transcripts in 27 prostate cancer biopsies from prostatectomies, and TMPRSS2:ERG transcripts in CTC isolated from 15 patients with advanced androgen independent disease using reverse transcription polymerase chain reaction (RT-PCR). Fluorescence in situ hybridization (FISH) was applied to analyze the genomic truncation of ERG, which is the result of TMPRSS2:ERG fusion in 10 of the 15 CTC samples. Results: TMPRSS2: ERG transcripts were found in 44% of our samples, but we did not detect expression of TMPRSS2:ETV1. Using FISH analysis we detected chromosomal rearrangements affecting the ERG gene in 6 of 10 CTC samples, including 1 case with associated TMPRSS2:ERG fusion at the primary site. However, TMPRSS2:ERG transcripts were not detected in any of the 15 CTC samples, including the 10 cases analyzed by FISH. Conclusion: Although further study is required to address the association between TMPRSS2:ERG fusion and prostate cancer metastasis, detection of genomic truncation of the ERG gene by FISH analysis could be useful for monitoring the appearance of CTC and the potential for prostate cancer metastasis.Peer reviewedFinal Published versio

Exposing the human nude phenotype [4]

Peer reviewedSubmitted Versio

Dynamic simulation of the THAI heavy oil recovery process

Toe-to-Heel Air Injection (THAI) is a variant of conventional In-Situ Combustion (ISC) that uses a horizontal production well to recover mobilised partially upgraded heavy oil. It has a number of advantages over other heavy oil recovery techniques such as high recovery potential. However, existing models are unable to predict the effect of the most important operational parameters, such as fuel availability and produced oxygen concentration, which will give rise to unsafe designs. Therefore, we have developed a new model that accurately predicts dynamic conditions in the reservoir and also is easily scalable to investigate different field scenarios. The model used a three component direct conversion cracking kinetics scheme, which does not depend on the stoichiometry of the products and, thus, reduces the extent of uncertainty in the simulation results as the number of unknowns is reduced. The oil production rate and cumulative oil produced were well predicted, with the latter deviating from the experimental value by only 4%. The improved ability of the model to emulate real process dynamics meant it also accurately predicted when the oxygen was first produced, thereby enabling a more accurate assessment to be made of when it would be safe to shut-in the process, prior to oxygen breakthrough occurring. The increasing trend in produced oxygen concentration following a step change in the injected oxygen rate by 33 % was closely replicated by the model. The new simulations have now elucidated the mechanism of oxygen production during the later stages of the experiment. The model has allowed limits to be placed on the air injection rates that ensure stability of operation. Unlike previous models, the new simulations have provided better quantitative prediction of fuel laydown, which is a key phenomenon that determines whether, or not, successful operation of the THAI process can be achieved. The new model has also shown that, for completely stable operation, the combustion zone must be restricted to the upper portion of the sand pack, which can be achieved by using higher producer back pressure

The H-Dibaryon and the Hard Core

The H dibaryon, a single, triply magic bag containing two up, two down and two strange quarks, has long been sought after in a variety of experiments. Its creation has been attempted in $K^-$, proton and most recently in relativistic heavy ion induced reactions. We concentrate on the latter, but our conclusions are more generally applicable. The two baryons coalescing to form the single dibaryon, likely $\Lambda \Lambda$ in the case of heavy ions, must penetrate the short range repulsive barrier which is expected to exist between them. We find that this barrier can profoundly affect the probability of producing the H state, should it actually exist.Comment: 9 pages including 4 figure