Solvency II – towards a new insurance supervisory system in the EU

This article describes the current state of affairs in the EU Solvency II project. The background and international context of the project is discussed, as well as the general outline of a future EU solvency system. In particular, several areas where further technical work is needed are outlined. These topics could provide interesting objects of study for professionals of actuarial sciences as well as to those of other related sciences.     

Work‐To‐Life Conflict and Enrichment Among International Business Travelers: The Role of International Career Orientation

The present study examines the direct and moderating effects of an international career orientation in the relationship between frequency and duration of international business traveling and work‐to‐life conflict and enrichment. In addition, the effort‐reward imbalance that potentially features in the international business traveler's job was examined in relation to work‐to‐life conflict and enrichment. The study was conducted among 232 Finnish people in jobs requiring international business travel. A moderated hierarchical regression analysis shows that travel of considerable duration and a pronounced effort‐reward imbalance had direct links to work‐to‐life conflict. In contrast, low effort‐reward imbalance and a strong international career orientation had direct links to work‐to‐life enrichment. In addition, having a strong orientation to an international career decreases work‐to‐life conflict when a job requires very frequent traveling, but the moderation effect was not found in relation to duration of traveling. Our findings indicate that interventions aimed at reducing work‐to‐life conflict and increasing work‐to‐life enrichment among international business travelers should focus on fostering a balance between efforts and rewards at work. The extent of employees’ internationalism should also be considered when recruiting people into jobs involving international business travel. © 2014 Wiley Periodicals, Inc.     

Sequential information arrival in the Finnish stock index derivatives markets

This paper investigates the hypothesis of sequential information arrival in the Finnish stock index futures and options markets. With no short selling restrictions in the derivatives markets, no causality relationships between returns and trading volume are observed. However, by using the so-called call-put signal, based on call and put volumes, causality between returns and volume is found supporting the hypothesis of sequential information arrival. In addition, it is discovered that the increased volume in stock index options relative to index futures has significantly increased their importance in the intermarket price discovery process.     

The role of capital flows in the adjustment of money demand: The case of Finland

The paper models the dual role of money balances as a short-run buffer stock and an asset with a well-specified long-run demand function. The analysis is carried out in an open economy framework. Consequently, there will be an offset to monetary policy in the form of induced capital movements, but in our model, it will be distributed over time even under perfect substitutability of financial claims. Estimates for the parameters of the demand for money function are obtained from a capital flow equation using both unrestricted (OLS) and restricted (nonlinear) estimation methods. The results provide strong evidence in favour of the shock-absorption theory for the adjustment of money demand under money supply changes.     

The impact of expatriate personality traits on cross-cultural adjustment: A study with expatriates in Japan

While regarded as among the most important factors affecting expatriate cross-cultural adjustment, little focused research with a broad array of personality traits has been conducted. This study draws from the cultural fit hypothesis and the socio-analytic theory to examine the impact of expatriate personality traits through the Multicultural Personality Questionnaire on the general-, interaction-, and work-related facets of cross-cultural adjustment among 181 expatriates in Japan. The results show positive relationships between the personality traits of Open Mindedness and interaction adjustment, Emotional Stability and Cultural Empathy and general adjustment, and Social Initiative and work adjustment.     

Coping with work‐family conflicts in the global career context

In order to increase our understanding of the work‐family conflicts experienced by global careerists and their families and the related coping strategies they adopt to address them, managers with long‐term global careers were interviewed. The results indicate that the challenging nature of their jobs means global careerists face not only time‐based and strain‐based work‐family conflicts but also mobility‐based conflicts, a category added in order to fully capture the work‐family conflicts faced. Managers were found mainly to use active problem‐solving strategies alongside family‐level coping strategies, though, in addition, emotional coping, avoidance, and reappraisal strategies were in evidence. ©2011 Wiley Periodicals, Inc.     

Interest Rate Risk Management in Major Finnish Firms

The interest rate policies of Finnish firms appear risk aversive, but hedging decisions are influenced by market view. Managers find they can forecast trends in interest rate development, and employ the forecasts in the choice of debt and hedging instruments. The use of risk assessment methods and hedging instruments are related to firm size but not to leverage. Most frequently employed hedging instruments are interest rate swaps and forward rate agreements. The respondents find their firms' interest rate risk management is successful, but performance is seldom measured against an explicitly defined benchmark.     

Leadership ideologies among European managers: A comparative survey in a multinational company

Adopting a subjective culture approach, the present study focuses on managers' beliefs about ideal leadership behaviour in organizations (i.e. leadership ideologies). On the basis of reported cultural dimensions which distinguish countries from one another, it is expected that the national origin of European managers will significantly influence their ideologies. The findings provide support for this assumption, since significant differences appeared between countries in eight aspects of leadership. Finally, the findings are compared with existing knowledge of cultural variation between these countries.     

‘The True and Fair View’ of Executive Stock Option Valuation

ABSTRACT

We compare the market values of executive stock option (ESO) trades with their Black & Scholes (1973) model values calculated following the major accounting standards, SFAS No. 123r and IFRS2. Our results show major underpricing compared to the traditional B&S method values. This should be considered while applying SFAS No. 123r and IFRS2 for estimating fair values. Especially time to expiration has a major influence on the undervaluation suggesting that the possibility of a change in corporate structure lowers the cost of ESOs to shareholders.