Too-big-to-fail after FDICIA

This reprint of a 1993 article outlines what Congress intended the Federal Deposit Insurance Corporation Improvement Act of 1991 to accomplish. A new preface discusses FDICIA's successes and failures as well as research calling for clearer policies to deal with the problem of "too big to fail" banks.Federal Deposit Insurance Corporation Improvement Act of 1991 ; Deposit insurance

Subordinated debt and prompt corrective regulatory action

Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking. Some of these proposals recommend using subordinated debt yield spreads as additional triggers for supervisory discipline under prompt corrective action (PCA), action that is currently prompted by capital adequacy measures. This paper provides a theoretical model describing how use of a second market-measure of bank risk, in addition to the supervisors’ own internalized information, could improve bank discipline. The authors then empirically evaluate the implications of the model. The evidence suggests that subordinated debt spreads dominate the current capital measures used to trigger PCA and consideration should be given to using spreads to complement supervisory discipline. The evidence also suggests that spreads over corporate bonds may be preferred to using spreads over U.S. Treasuries.Bank supervision ; Debt

Covert repertoires: ecotage in the UK

Ecological sabotage (ecotage) has been a feature of the more radical parts of the environmental movement in the Western world for several decades. While it may be perceived as being the preserve of underground cells of 'eco-terrorists', in the UK those who carry out small-scale acts of sabotage are also often engaged in relatively conventional political activity; view sabotage as a complement to other action, not as an end in itself; and are committed to avoiding physical harm to people. Drawing on ethnographic data from research with British activists, this article seeks to define ecotage and to explain its place in the repertoires of the environmental direct action movement in the UK. It is argued that the self-limiting form of ecotage in the UK has its roots in cross-movement debates that have developed over several decades and that national traditions remain important in understanding the development of social movement repertoires

Closed circuit TV system automatically guides welding arc

Closed circuit television /CCTV/ system automatically guides a welding torch to position the welding arc accurately along weld seams. Digital counting and logic techniques incorporated in the control circuitry, ensure performance reliability

Determinants of the loan loss allowance: some cross-country comparisons

This paper analyses the determinants of banks’ loan loss allowances for samples of US banks and three non-US samples: a group of 21 countries, Canada and Japan. The model includes fundamental (or non-discretionary) determinants of the allowance such as non-performing loans, and discretionary determinants such as income before the loan loss provision. The results suggest that the loan loss allowance is sensitive to pre-provision income in almost all samples. However, the results also suggest that some variables thought to reflect fundamental factors in US analysis, such as net chargeoffs, are not significant factors for non-US banks.loan loss allowance; accounting standards; international banking; nonperforming loan; discretionary accruals

Single-color two-photon spectroscopy of Rydberg states in electric fields

Rydberg states of atomic helium with principal quantum numbers ranging from n=20 to n=100 have been prepared by non-resonance-enhanced single-color two-photon excitation from the metastable 2 {^3}S{_1} state. Photoexcitation was carried out using linearly and circularly polarized pulsed laser radiation. In the case of excitation with circularly polarized radiation, Rydberg states with azimuthal quantum number |m_{\ell}|=2 were prepared in zero electric field, and in homogeneous electric fields oriented parallel to the propagation axis of the laser radiation. In sufficiently strong electric fields, individual Rydberg-Stark states were resolved spectroscopically, highlighting the suitability of non-resonance-enhanced multiphoton excitation schemes for the preparation of long-lived high-|m_{\ell}| hydrogenic Rydberg states for deceleration and trapping experiments. Applications of similar schemes for Doppler-free excitation of positronium atoms to Rydberg states are also discussed

On the Identification of Time Varying Structures

The identifiability of reduced form econometric models with variable coefficients is investigated using the control theoretic concepts of uniform complete observability and uniform complete controllability. First, a variant of the state space representation of the traditional reduced form is introduced which transcribes the underlying non-stationary estimation problem into one particularly suited to a Kalman filtering solution. Using such a formulation, observability and controllability can be called upon to obtain a necessary and sufficient condition for identification of the specific parameterization. The results so obtained are completely analogous to those already established in the econometric literature, namely, that the parameters of the reduced form are always identified subject to the absence of multicollinearity(referred to as "persistent excitation" in the control literature). How-ever, now the multicollinearity condition is seen to depend on the structure of the parameter variations as well as the statistical nature of the explanatory variables. The verification of identifiability thus reduces to a check for uniform complete observability which can always be affected in econometric applications. Some consistency results are also presented which derive from the above approach.

The major supervisory initiatives post-FDICIA: Are they based on the goals of PCA? Should they be?

The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit insurance system.Federal Deposit Insurance Corporation Improvement Act of 1991 ; Financial institutions ; Deposit insurance ; Bank supervision