Market impact under a new regulatory regime: Credit rating agencies in Europe

We investigate whether there are any identifiable differences in market perceptions of rating news released by Moody’s, S&P and Fitch following the establishment of a new regulatory regime in July 2011, when the European Securities and Markets Authority assumed responsibility for rating agencies’ regulation in Europe. We focus the analysis on the impact of bank rating actions on stock returns and volatility during 2008-2013. Among the intended effects of the new regulatory regime are reduced market impact of rating actions and enhanced market stability, yet we find very mixed evidence. Differentials in market responses across CRAs are identified

Cerebrospinal fluid proteomics define the natural history of autosomal dominant Alzheimer's disease

Alzheimer’s disease (AD) pathology develops many years before the onset of cognitive symptoms. Two pathological processes—aggregation of the amyloid-β (Aβ) peptide into plaques and the microtubule protein tau into neurofibrillary tangles (NFTs)—are hallmarks of the disease. However, other pathological brain processes are thought to be key disease mediators of Aβ plaque and NFT pathology. How these additional pathologies evolve over the course of the disease is currently unknown. Here we show that proteomic measurements in autosomal dominant AD cerebrospinal fluid (CSF) linked to brain protein coexpression can be used to characterize the evolution of AD pathology over a timescale spanning six decades. SMOC1 and SPON1 proteins associated with Aβ plaques were elevated in AD CSF nearly 30 years before the onset of symptoms, followed by changes in synaptic proteins, metabolic proteins, axonal proteins, inflammatory proteins and finally decreases in neurosecretory proteins. The proteome discriminated mutation carriers from noncarriers before symptom onset as well or better than Aβ and tau measures. Our results highlight the multifaceted landscape of AD pathophysiology and its temporal evolution. Such knowledge will be critical for developing precision therapeutic interventions and biomarkers for AD beyond those associated with Aβ and tau

At the Crossroads: The Euro and Its Central Bank Guardian (and Savior?)

This paper investigates the role of the European Central Bank (ECB) in the (mal-) functioning of Europe's Economic and Monetary Union (EMU), focusing on the German intellectual and historical traditions behind the euro policy regime and its central bank guardian. The analysis contrasts Keynes's chartalist conception of money and central banking to the peculiar post-WWII German traditions as nourished by the Bundesbank and based on fear of fiscal dominance. Keynes viewed the central bank as an instrument of the state, leading and controlling the financial system and wider economy but ultimately an integral part of, and controlled by, the state. By contrast, the Maastricht (EMU) regime (of German design) positions the central bank as controlling the state (and disciplining labor unions, too). The paper identifies a number of potential weaknesses that could undermine the euro's guardian of stability, and ultimately the euro itself. Essentially, the national success of the Bundesbank model in pre-EMU times has left Europe stuck with a policy regime that is wholly unsuitable for the area as a whole. As the general perception in Germany today is that the euro crisis has confirmed the soundness of the key stability-oriented principles and ideas behind the euro regime, and of the virtuousness of Germany's own conduct under that regime in particular, it is hard to see how Europe might escape doom through regime reform and policies that would need to permanently put to rest Bundesbank wisdom

Deconstructing pathological tau by biological process in early stages of Alzheimer disease: a method for quantifying tau spatial spread in neuroimaging

Background: Neuroimaging studies often quantify tau burden in standardized brain regions to assess Alzheimer disease (AD) progression. However, this method ignores another key biological process in which tau spreads to additional brain regions. We have developed a metric for calculating the extent tau pathology has spread throughout the brain and evaluate the relationship between this metric and tau burden across early stages of AD. Methods: 445 cross-sectional participants (aged ≥ 50) who had MRI, amyloid PET, tau PET, and clinical testing were separated into disease-stage groups based on amyloid positivity and cognitive status (older cognitively normal control, preclinical AD, and symptomatic AD). Tau burden and tau spatial spread were calculated for all participants. Findings: We found both tau metrics significantly elevated across increasing disease stages (p < 0.0001) and as a function of increasing amyloid burden for participants with preclinical (p < 0.0001, p = 0.0056) and symptomatic (p = 0.010, p = 0.0021) AD. An interaction was found between tau burden and tau spatial spread when predicting amyloid burden (p = 0.00013). Analyses of slope between tau metrics demonstrated more spread than burden in preclinical AD (β = 0.59), but then tau burden elevated relative to spread (β = 0.42) once participants had symptomatic AD, when the tau metrics became highly correlated (R = 0.83). Interpretation: Tau burden and tau spatial spread are both strong biomarkers for early AD but provide unique information, particularly at the preclinical stage. Tau spatial spread may demonstrate earlier changes than tau burden which could have broad impact in clinical trial design. Funding: This research was supported by the Knight Alzheimer Disease Research Center (Knight ADRC, NIH grants P30AG066444, P01AG026276, P01AG003991), Dominantly Inherited Alzheimer Network (DIAN, NIH grants U01AG042791, U19AG03243808, R01AG052550-01A1, R01AG05255003), and the Barnes-Jewish Hospital Foundation Willman Scholar Fund

Brain energy rescue:an emerging therapeutic concept for neurodegenerative disorders of ageing

The brain requires a continuous supply of energy in the form of ATP, most of which is produced from glucose by oxidative phosphorylation in mitochondria, complemented by aerobic glycolysis in the cytoplasm. When glucose levels are limited, ketone bodies generated in the liver and lactate derived from exercising skeletal muscle can also become important energy substrates for the brain. In neurodegenerative disorders of ageing, brain glucose metabolism deteriorates in a progressive, region-specific and disease-specific manner — a problem that is best characterized in Alzheimer disease, where it begins presymptomatically. This Review discusses the status and prospects of therapeutic strategies for countering neurodegenerative disorders of ageing by improving, preserving or rescuing brain energetics. The approaches described include restoring oxidative phosphorylation and glycolysis, increasing insulin sensitivity, correcting mitochondrial dysfunction, ketone-based interventions, acting via hormones that modulate cerebral energetics, RNA therapeutics and complementary multimodal lifestyle changes

Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing

Financial upheaval and unconventional monetary policies have made money a salient political issue. This provides a rare opportunity to study the under-appreciated role of monetary trust in the politics of central bank legitimacy which, for the first time in decades, appears fragile. While research on central bank communication with "the markets" abounds, little is known about if and how central bankers speak to "the people." A closer look at the issue immediately reveals a paradox: while a central bank's legitimacy hinges on it being perceived as acting in line with the dominant folk theory of money, this theory accords poorly with how money actually works. How central banks cope with this ambiguity depends on the monetary situation. Using the Bundesbank and the European Central Bank as examples, this paper shows that under inflationary macro-economic conditions, central bankers willingly nourished the folk-theoretical notion of money as a quantity under the direct control of the central bank. By contrast, the Bank of England’s recent refutation of the folk theory of money suggests that deflationary pressures and rapid monetary expansion have fundamentally altered the politics of monetary trust and central bank legitimacy.Die durch die Finanzkrise und die unkonventionellen Maßnahmen der Zentralbanken bewirkte Politisierung des Geldes erlaubt einen seltenen Einblick in den Zusammenhang zwischen Geldvertrauen und Zentralbanklegitimität. Die Kommunikation von Zentralbanken mit der breiten Öffentlichkeit – im Gegensatz zur gut erforschten Kommunikation mit Finanzmärkten bisher weitgehend vernachlässigt – sieht sich mit einem Dilemma konfrontiert. Einerseits hängt die Legitimität der Zentralbank davon ab, ob ihr Handeln den Maximen entspricht, die sich aus der in der Öffentlichkeit vorherrschenden Theorie des Geldes ableiten. Andererseits weicht diese Theorie in wichtigen Punkten von der tatsächlichen Funktionsweise des Geldsystems ab. Wie Zentralbanken mit diesem Dilemma umgehen, hängt von der allgemeinen geldpolitischen Situation ab. Anhand der Beispiele der Deutschen Bundesbank und der Europäischen Zentralbank wird argumentiert, dass Zentralbanker unter inflationären Bedingungen die Öffentlichkeit gerne in dem Glauben lassen, die Geldmenge sei vollständig von der Zentralbank kontrolliert. Die außergewöhnliche Initiative der Bank of England, die Öffentlichkeit von der Irrtümlichkeit dieser Vorstellung zu überzeugen, zeigt hingegen, dass deflationärer Druck und rapide geldpolitische Expansion das diskursive Verhältnis zwischen Geldvertrauen und Zentralbanklegitimität grundlegend verändert haben.1 Introduction 2 Money, trust and people Money: The political economy of money and (central) banking Trust: What does it mean to say that people have trust in money? People: Beyond methodological elitism 3 The folk theory of capitalist credit money The myth that all money is created equal (and thus non-hierarchical) The myth of banks as intermediaries and the myth of exogenous money 4 The politics of trust and legitimacy: From monetary restraint to monetary expansion Fighting inflation: The Bundesbank/ECB pretense of control over M3 Fighting deflation: The Bank of England’s insistence on non-control over M3 5 Conclusion Reference