Competition and Profitability in European Banking: Why Are British Banks So Profitable?

Substantial differences remain between the profitability of banks in different European countries. This article considers the relationship between competition and profitability in European banking focussing on the experience of the UK where two issues are considered: why British banks have been earning excess returns for more than a decade and why British banks seem to be more profitable than their Continental counterparts. A paradigm is offered to explain this. A distinction is made between shareholder value (SHV) and stakeholder value (STV) banks whose business objectives are often different. Significant differences exist between European countries in the balance of SHV and STV banks. The UK is almost unique in Europe in having almost exclusively SHV‐based banks. Pressures will intensify for all European banks to adopt SHV strategies, which will imply substantial changes in bank strategies and business operations .     

The average hospital

In 1998, the UK government introduced the National Reference Costing Exercise (NRCE) to benchmark hospital costs. Benchmarking is usually associated with “excellence”; the government emphasised the raising of standards in the 1997 White Paper “The New NHS: Modern, Dependable” that heralded the NRCE. This paper argues that the UK “New Labour” government's introduction of, and increasing reliance on, hospital cost benchmarking is promoting “averageness”. Average hospitals will be cheaper to run and easier to control than highly differentiated ones; they may also score more highly on certain measures of service improvement. The paper aims, through empirical investigation, both to demonstrate how the activities and processes of hospital life “become average” as they are transformed to comply with the cost accounting average and to indicate how the “average” is being promoted as the norm for hospitals to aspire to. To benchmark to average costs, comparisons are necessary. To compare hospital costs involves the creation of categories and classification systems for clinical activities. Empirical evidence shows that as doctors, patients and clinical practices are moulded into costed categories, they become more standardized, more commensurate and the average hospital is created.     

Directly unproductive schooling: How country characteristics affect the impact of schooling on growth

The rapid rise in schooling in developing countries in recent decades has been dramatic. However, many cross-country regression analyses of the impact of schooling on economic growth find low and insignificant coefficients. This empirical ‘puzzle’ contrasts with theoretical arguments that schooling, through raising human capital, should raise income levels. This paper argues that poor results are to be expected when regression samples include countries that vary greatly in their ability to use schooling productively. Data on corruption, the black market premium on foreign exchange and the extent of the brain drain for developing countries are used as indicators of an economy's productive use of schooling. Regression analysis shows that the impact of schooling on economic growth is substantially higher in countries that are adjudged to use schooling productively.     

INSIDE THE'BLACK BOX' OF MARKET DISCIPLINE

This article considers the role of market monitoring and discipline in policy orientated towards maintaining financial stability. Although it is widely assumed that markets have a potentially powerful role in disciplining banks, the precise mechanisms are not always clear. In this sense, market discipline is something of a 'Black Box'. The purpose of this article is to consider the precise mechanisms within the Black Box and to outline the required conditions for market discipline to be effective. It is found that there is much that policymakers can and should do to enhance the effectiveness of market discipline and to ensure that market discipline is not impeded.     

Regulation of Retail Investment Services

How much regulation do the consumers of non-bank retail investment services want? The arrival of the Personal Investment Authority raises questions about the necessity, costs, structure and accouni-ability of regulation, as well as its potential moral hazards.     

Commentary: Internationalization of the world's securities markets: Economic causes and regulatory consequences

Commentary: Internationalization of the world's securities markets: Economic causes and regulatory consequences     

Boundary work: Costing and caring in the social services

“Where does it stop on costs?”—this paper offers some responses to this question on the appropriate boundaries for costing expertise. The question was posed by a contracts officer within a social services department. The context for the question was an empirical research study in which front line welfare professionals were asked to comment, first, on costing information which could, possibly, assist in making “value for money” assessments and, second, on the contracting regime within which such costing information assumes a potentially highlighted significance. At the first stage of the study welfare professionals were found to be engaged in boundary-work to prevent the encroachment of costs on care activities. “Costing” and “caring” were being managed as “disengaged domains” through the boundary work of obfuscation, “reality-defining” and marginalization. Consequent upon the initial study the social services departments were re-visited two years later. By this time it was apparent that boundary-work had allowed some engagement between costing and caring. The paper argues that processes of alignment between costing and caring and the reconstitution of organizational tasks (including the creation of care “managers”) have allowed social work professionals to accept some costing work—work which had previously been defined as “the other”. The major themes of this paper are: the exploration of the responses of operational social services personnel to their new financial roles, and the interpretation of change in the social services context through the ideas of boundary-work. These themes are developed through a consideration of the ambiguous tasks of welfare-professionals and the consequent indeterminacy of resourcing decisions. The paper concludes that the limits of applicability of costing are yet to be set in the domain of the social services.     

Herbicide resistance and the adoption of integrated weed management by Western Australian grain growers

Extension programs to encourage farmers to reduce reliance on herbicides by adopting integrated weed management (IWM) practices have met with limited success. Studies aiming to understand the factors that influence farmers' choices of integrated control practices have faced difficulties in variable specification, and have not achieved high explanatory power. Using data from grain growers in Western Australia, where herbicide resistance in major crop weeds is common, this study tests the applicability of a framework for the IWM adoption decision in which herbicide efficacy is assumed to be a potentially exhaustible resource. Farmers' perceptions of multiple techniques and other variables are aggregated using principal components, and used in logistic regressions to explain the intensity of use of IWM practices. Eighty‐six percent of growers were correctly classified according to use of multiple IWM practices. Herbicide resistance and expectations of the future availability of effective new herbicides were significant in explaining IWM adoption. IWM adoption and herbicide‐resistance management are shown to be information‐intensive and involving an intertemporal resource management decision.