Regulating Banks through Market Discipline: A Survey of the Issues

Abstract.  The interest in the application of market discipline to regulate the financial industry has boomed recently due to the proposed New Capital Accord. This paper reviews the potential role market discipline can play in financial regulation. We start with a discussion of the rationale for financial regulation and with a brief history of the current regulatory mechanisms. Next, a definition of market discipline as a regulatory mechanism is advanced. We evaluate the disciplining power various market participants have. Finally, we argue that more external risk management disclosure is a condition sine qua non in order to enable market discipline as a regulatory mechanism. In this respect, the Basle Committee has taken the right approach.     

A comparison of monetary family policy in the European Community

In a number of constitutions, in article 16.3 of the International Bill of Human Rights and in article 23.1 of the International Covenant on Economic, Social and Cultural Rights it is laid down that the family is the natural and fundamental group unit of society and is entitled to protection by society and the State. The following exposition aims to explain the monetary family policy and the extent of monetary transfers for the protection of families in the member countries of the European Community (EC).     

Demand for durable and nondurable goods,environmental policy and consumer welfare

If a tax on energy affects the demand for a nondurable good, the stock of a durable good, and the proportion of the energy consumption per unit of service of the durable good, an integrated approach for investigating consumer demand for durables and nondurables is required. The purpose of this paper is to employ the concept of a variable expenditure function with quasi-fixed durable goods as arguments in order to derive a demand system for nondurable goods in prices of the nondurables, in the stocks of durables, and in variable expenditure. From the envelope condition desired stocks of durables can be calculated and investment demand for durables can be determined. For an application we choose a variable expenditure function based on the almost ideal demand specification, and evaluate alternative environmental policy measures using the equivalent variation for comparing the welfare effects.     

Principles for a European Union''s Public Debt

The EU has neither the power to tax nor the right to run a public debt. We analyze if the EU should receive the right for public indebtedness. We make use of the normative theory of public indebtedness and of positive political economy analysis. Our normative analysis identified specific cases for an appropriate use of public indebtedness. According to the political economy analysis, a misuse of public debt may be possible. As the implementation of strict constitutional constraints can limit this misuse, we propose the assignment of a right to public borrowing to the EU within tight constitutional restrictions.     

Daylight saving effect

Kamstra et al. [Kamstra, M.J., Kramer, L.A., Levi, M.D., 2000. Losing sleep at the market: the daylight saving anomaly. The American Economic Review 90, 1005–1011] argue that the mean weekend return following the changes in daylight saving time is less than the mean weekend return throughout the rest of the year. Opposing studies, such as Pinegar [Pinegar, J.M., 2002. Losing sleep at the market: comment. The American Economic Review 92, 1251–1256), reason that the observed results depend upon methodology. We extend the ongoing discussions by providing further evidence for equity markets and bond markets in Germany and across Europe. We further demonstrate that the daylight saving effect does not serve as a potential rationale for the weekend effect.