Crisis Management and an Ethic of Care: The Case of Northern Rock Bank

Different ethical frameworks have been proposed as appropriate for integrating into crisis management strategies. This study examines an ethic of care approach to crisis management analysing the case of Northern Rock bank which was at the centre of the recent financial crisis in the UK. The development and maintenance of relationships is fundamental to an ethic of care approach and the research recognises this by examining the bank–stakeholder relationship both before and after the crisis. Considerable anger was directed at the bank post-crisis and, subsequently, the management team resigned. An important contention is that because an ethic of care approach had not been followed external parties judged that management should have foreseen the crisis and the harm caused was deemed intentional, even though predicting the crisis would have been difficult and it is improbable any harm was intended. Additionally, this negative reaction was heightened due to three facets of Northern Rock’s history: (i) its previous existence as a building society, (ii) the ‘local’ nature of the bank and (iii) the creation of The Northern Rock Foundation. These historical factors caused local stakeholders to presume a ‘caring’ relationship between themselves, and the bank had continued to exist post-demutualisation. The events of the crisis compelled stakeholders to re-appraise this presumption, amplifying the post-crisis anger.     

The Brexit Dynamics: British and EU27 Challenges After the EU Referendum

Prior to the Brexit referendum, the UK government sent an information brochure to households across the country. Surprisingly, key findings of a study by the UK Treasury — including an expected per capita income loss of £1800 — were not included in the brochure. Calculations indicate that if this information had been included, the outcome of the referendum would have been 52.1% for Remain. Instead, the pro-Brexit campaign utilised anti-immigrant rhetoric to create a scapegoat for the under-provision of local public services, when actually this was due to massive cuts in budget transfers to local communities after the financial crisis. Looking ahead, major reforms are now necessary if the EU is not to disintegrate. Given the fresh support in the UK and US for banking deregulation, the EU must stand firm in support of prudential supervision and banking regulation to prevent a new international banking crisis.     

民营化、国有化与中国国有银行改革

国有银行自上世纪70年代中期以来出现了民营化的国际趋势,一些国家因此发生了银行危机.而此前全球曾有过国有化浪潮.虽然国有银行效率比民营银行低,但经验研究却表明,国有银行与银行危机之间没有或很少有因果关系;而且由于有政府信誉担保不易发生挤兑.中国国有银行改革过程实际上是政府逐步放弃控制权的过程,但切不可因效率而忽视金融稳定;简单地依靠所有权变更无法解决国有银行脆弱性问题;而且,与境外战略投资者合作时要谨防金融主权失控风险.     

Predicting bank failures using a hazard model: the Venezuelan banking crisis

This paper uses a proportional-hazard model with time-varying covariates to determine the financial indicators that could have predicted the bank failures during the 1994–1995 Venezuelan banking crisis. A proportional-hazard model is an adequate econometric tool to analyze this case of limited cross-sectional financial information. I find that both a bank's ability to generate sound profits and the support of low risk government bonds were the key to not failing in a crisis that took down more than half of the system. These results can be extended to a general case of bank failures under volatile economic environments.     

金融危机背景下美国金融监管构架改革剖析

美国现行＂双重多头＂金融监管体系存在多头监管、监管疏漏和监管失控等缺陷。金融危机的恶化进一步暴露了美国监管体系的内在缺陷。面对次贷危机中暴露出的风险管理的制度性缺陷,2008年3月29日美国财政部公布的《现代金融监管构架改革蓝图》详细地阐述了美国金融监管构架改革的短期目标和途径、中期目标和途径以及长期目标和途径,并折射了美国金融监管理念从机构导向监管向业务导向监管转变、从监管局部性风险向监管金融市场系统性风险的转变和从规则导向监管向目标导向监管的转变。     

The Role of the Banking System in the International Transmission of Shocks

The paper analyzes the role of the banking system in the international transmission of financial shocks. A channel of transmission is defined as a mechanism through which a financial crisis in one country induces a financial crisis in another country. Channels involving banks operate through changes in the capital adequacy ratios of a common lender and in the value of collateral of domestic borrowers, through bank runs and bank panics, and through moral hazard. Recent empirical evidence points to the significant effects of the common lender channel on the probability of a financial crisis, while mitigating the role of bank runs and remaining inconclusive about moral hazard. Thus, we introduce a series of indices of vulnerability to the common lender channel that improve existing measures by taking into account both the borrower's dependence on foreign loans and the lender's exposure to a single country. By comparing the degree of vulnerability to the common lender channel during the 1990s major crises, we find that vulnerability was higher in the Asia Pacific region in 1997 (and, especially, in the five countries most involved in the crisis) than in Latin America and East Europe. Vulnerability was significantly lower in 2000 for almost all the countries in our sample, due to both a more even distribution of liabilities on the part of developing countries and a higher degree of diversification of bank investments from the three main lending countries (United States, Japan, Germany).     

金融危机应对政策的有效性:基于40起事件的实证研究

本文以20世纪80年代以来世界范围内40次重要的系统性银行危机为基础,对金融危机后常见的15种应对措施进行了系统的实证评价.结果表明,系统性银行危机发生后,大规模政府干预、流动性支持(紧急贷款)、重新资本化、银行关闭和兼并是使用频率最高的5项措施,但大规模政府干预和流动性支持往往伴随着较高的财政成本,而重新资本化和兼并则分别伴随着危机持续时间的延长和产出损失的上升.一揽子担保计划虽有助于提高危机期间的经济增长率,但危机后的经济增长却相对较低.国有化措施不仅会产生较高的财政成本,通常还伴随着较高的产出损失.存款人承担损失和IMF援助这两种措施有助于缩短危机持续时间,但IMF援助通常伴随着较高的财政成本和危机期间较低的经济增长率.     

Die Entwicklung der HSH Nordbank als Landesbank — einige Einschätzungen

Some of the German “Landesbanken” engaged in highly risky business with the acceptance of local politicians and then demanded bailouts during the financial crisis. The HSH Nordbank, the world’s largest provider of ship financing, based in northern Germany, lost almost 2.8 billion euros in 2008. The two German shareholders, the states of Hamburg and Schleswig-Holstein, had to agree on a 13 billion euro bailout plan for the bank (3 billion euros in cash and a “risk shield” of 10 billion euros). Furthermore, the German government provided the HSH Nordbank with 17 billion euros of liquidity guarantees under the Special Financial Market Stabilisation Fund (SOFFIN). In view of this situation, the following questions should be answered: What role did the merger of the Hamburger Landesbank and Landesbank Schleswig-Holstein play in the development of the HSH Nordbank? Was there a possibility to merge the HSH Nordbank with another bank to avoid the financial difficulties? Were the extensive conditions set by the EU Commission in the state aid proceedings too restrictive? What are the actual costs of the HSH Nordbank’s bailout programme for the shareholders and their governmental budgets?     

危机环境下股权集中和制衡、政府干预与企业绩效——基于生物医药上市公司经验数据

本文以生物医药行业上市公司为研究样本,考察了不同经济环境下股权集中和制衡对企业绩效的影响,以及政府干预在股权制衡对企业绩效影响中的调节作用。实证研究表明,相对于非危机环境来说,在危机环境下股权制衡对企业绩效的促进作用显著增强,股权集中对企业绩效的促进作用显著降低,政府干预在股权制衡对企业绩效影响中的负向调节作用显著增强。     

中国货币政策对银行风险承担行为的影响研究——基于异质性视角

国际金融危机的爆发引发了理论界对货币政策是否影响银行体系稳定更为广泛的关注。文章基于异质性视角构建动态面板数据模型对货币政策与银行风险承担行为之间的关系进行估计,研究结果表明：2003-2011年,货币政策变量对银行风险偏好的影响具有时滞性,贷款利率提高有助于抑制银行风险,货币供应量增加会刺激银行更加冒险;不同银行对货币政策冲击会做出异质反应,随着资本充足率的提高,货币政策对银行风险承担行为的影响效果减弱。因此,加强中国人民银行在宏观审慎监管中的主导作用、建立逆周期的货币政策和资本监管协调机制是后金融危机时代我国监管当局的重要议题。     

Financial Liberalisation and Growth in China’s Economic Reform

This paper summarises China’s financial liberalisation experience and examines the contributions of financial resources on economic growth during the post‐reform period. Financial liberalisation has resulted in the reallocation of the four sources of total investment in fixed assets: state budget appropriation, national bank loans, self‐raised funds, and foreign investment. We find that the growth of GDP and industrial production are positively related to the growth of self‐raised funds and foreign investment. We conclude that the use of foreign investment and funds raised by the enterprises themselves are more efficient than the government’s appropriation and provision of bank loans.     

Households' Decisions on Savings Accounts After Negative Experiences with Banks During the Financial Crisis

During the 2007–2008 financial crisis, consumers in many countries were suddenly confronted with the fact that their bank needed government support or had even failed. Using a detailed survey among households in the Netherlands, we show how these unexpected negative experiences have changed consumers' handling of their savings accounts. Our findings suggest that respondents who were customers of troubled banking institutions were subsequently more likely to spread their savings across accounts at several banks. They were also more likely to move funds across banks. Our results also suggest that the size of the shock is important as the strongest effects are found for respondents who experienced both a bank bailout and a bankruptcy.     

Decent Work: The Moral Status of Labor in Human Resource Management

Historically, whistleblowing research has predominantly focused on psychological and organisational conditions of raising concerns about alleged wrongdoing. Today, however, policy makers increasingly start to look at institutional frameworks for protecting whistleblowers and responding to their concerns. This article focuses on the latter by exploring the roles that trade unions might adopt in order to improve responsiveness in the whistleblowing process. Research has consistently demonstrated that the two main reasons that deter people from reporting perceived wrongdoing are fear of retaliation and a belief that the wrongdoing is unlikely to be rectified. In this article, we argue that trade unions have an important part to play in dealing with both these inhibiting factors but this requires them to be appropriately engaged in the whistleblowing process and willing to take a more proactive approach to negotiations. We use Vandekerckhove’s 3-tiered whistleblowing model and Kaine’s model of union voice level to structure our speculative analysis of the various ways in which trade unions can interact with whistleblowers and organisations they raise concerns about alleged wrongdoing in, as well as agents at a regulatory level. Our articulation of specific roles trade unions can play in the whistleblowing process uses examples from the UK as to how these trade union roles are currently linked to and embedded in employment law and whistleblowing regulation.     

Fed Funds Rate Surprises and Financial Markets

This paper investigates the sensitivity of various financial markets to surprises in the federal funds rate. We employ the methodology outlined by Kuttner [2001] to reevaluate prior results and expand the analysis to include data up until the financial crisis, inclusive. Our data set includes additional events to previous studies, which led our results to differ than those earlier studies. For our sample excluding the financial crisis (1994–2007), we found that Fed funds surprises had a significant effect on the percent change in the S&P 500 index, but generally had little significant effect on Treasury yields and the trade-weighted dollar. We also studied a decomposition of the yield curve and found that the lack of significant effect on Treasury yields was a result of the offsetting effects of surprises on the term premium and risk-neutral yield. In addition, our analysis of the financial crisis revealed several shifts in the response of many asset classes, likely a result of the large signaling effects contained in monetary policy combined with the extraordinary events that were occurring.     

地方政府债务扩张与银行信贷风险

国际金融危机后实施的"金融救市"政策是导致地方政府债务迅速扩张的外部因素,地方政府债务的迅速扩张又反过来加剧了银行的信贷风险,为金融体系的不稳定性埋下隐患。实证研究发现,金融危机后实施的救市政策构成了商业银行"对政府债权"的显著差异与结构突变;商业银行"对政府债权"对银行的不良贷款率和存贷比显著正相关。     

Cross-border banking,credit access,and the financial crisis

We study the sensitivity of credit supply to bank financial conditions in 16 emerging European countries before and during the financial crisis. We use survey data on 10,701 applicant and non-applicant firms that enable us to disentangle effects driven by positive and negative shocks to the banking system from demand shocks that may vary across lenders. We find strong evidence that firms' access to credit was affected by changes in the financial conditions of their banks. During the crisis firms were more credit constrained if they were dealing with banks that experienced a decline in equity and Tier 1 capital, as well as losses on financial assets. We also find that access to credit reflects the balance sheet conditions of foreign parent banks. The effect of positive and negative shocks to a bank is greater for riskier firms and firms with fewer tangible assets.     

The Effects of Compensation Structures and Monetary Rewards on Managers’ Decisions to Blow the Whistle

Recent research indicates that compensation structure can be used by firms to discourage their employees from whistleblowing. We extend the ethics literature by examining how compensation structures and financial rewards work together to influence managers’ decisions to blow the whistle. Results from an experiment indicate that compensation with restricted stock, relative to stock payments that lack restrictions, can enhance the likelihood that managers will blow the whistle when large rewards are available. However, restricted stock can also threaten the effectiveness of whistleblowing systems without the presence of large financial rewards for whistleblowing. Thus, the large potential rewards for whistleblowing enacted by the Dodd–Frank Act appear timely as firms are moving toward compensation agreements that include greater proportions of restricted stock.     

政策利率引导市场利率的走势吗——央票发行利率与央票市场利率双向互动关系研究

本文基于利率期限结构的主成分分析结果,通过构建回归方程的方法,针对上一轮经济周期中的升息期和受金融危机影响的降息期,实证研究了央票发行利率与央票市场利率间双向关系的周内效应.结果表明.在经济正常波动时期,央票发行利率并未直接引导市场利率,而是借由市场预期引导市场利率走势,央票发行利率的公布不对市场利率造成影响;在金融危机时期,央行货币政策出乎市场预期,央票发行利率直接引导市场利率走势.因此,金融危机时期与经济正常波动时期央行货币政策利率传导的途径和效果是有所不同的.     

Competitive Features in the Provision of Consumer Credit

The sub-prime crisis has rejuvenated a public dialogue about the regulation of financial systems. This paper examines the impact of culture on the regulation of bank entry. Based on data from 53 countries, the paper's empirical estimations are inconsistent with the prediction of ‘public choice theory’, while supporting the ‘social choice view’ that cultural value has significant influence on regulatory policy and bank performance. The estimated structural model also suggests that social context can affect the formulation of cultural values across countries.     

The 2007–2009 Financial Crisis: An Erosion of Ethics: A Case Study

This case study examines five dimensions of the 2007–2009 financial crisis in the United States: (1) the devastating effects of the financial crisis on the U.S. economy, including unparalleled unemployment, massive declines in gross domestic product (GDP), and the prolonged mortgage foreclosure crisis; (2) the multiple causes of the financial crisis and panic, such as the housing and bond bubbles, excessive leverage, lax financial regulation, disgraceful banking practices, and abysmal rating agency performance; (3) the extraordinary efforts of the Federal Reserve, the Federal Reserve Bank of New York, and the Department of the Treasury to stem the financial freefall triggered by the crisis and resuscitate financial institutions, (4) the ethical implications of the unprecedented actions by government institutions to rescue financial institutions and drag the country back from the brink of global financial collapse, and the conduct of the various parties contributing to the financial crisis, such as the shoddy behavior of mortgage brokers, the massive securitization of mortgages into overly complex bonds, the excessive leverage of financial institutions, the disgraceful work of bond rating firms, the abysmal risk management systems employed by financial institutions, and the massive operations of the shadow banking and over-the-counter derivatives markets; and (5) the major provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law to in response to the financial crisis and for the purpose of correcting the egregious conduct of major financial institutions.