BCCI: LESSONS FOR INTERNATIONAL BANK SUPERVISION

This paper analyzes the BCCI collapse in light of the ongoing efforts of the Basle Committee on Banking Supervision to ensure that "no foreign banking establishment escapes adequate supervision." It reviews the development of the Basle Committee's Concordat and analyzes ways of improving international bank supervision.     

The Valuation of American Options with Stochastic Interest Rates: A Generalization of the Geske—Johnson Technique

The Geske–Johnson approach provides an efficient and intuitively appealing technique for the valuation and hedging of American-style contingent claims. Here, we generalize their approach to a stochastic interest rate economy. The method is implemented using options exercisable on one of a finite number of dates. We illustrate how the value of an American-style option increases with interest rate volatility. The magnitude of this effect depends on the extent to which the option is in the money, the volatilities of the underlying asset and the interest rates, as well as the correlation between them.     

PRODUCT IMPROVEMENT AND TECHNOLOGICAL TYING IN A WINNER‐TAKE‐ALL MARKET*

In a winner‐take‐all duopoly for systems in which firms invest to improve their products, a vertically integrated monopoly supplier of an essential system component may have an incentive to advantage itself by technological tying. If the vertically integrated firm is prevented from technologically tying, there is an equilibrium in which the more efficient firm invests and serves the entire market. However, another equilibrium may exist in which the less efficient firm wins the market. Technological tying enables a vertically integrated firm to foreclose its rival. The welfare implications of technological tying are ambiguous and depend on equilibrium selection.     

Neutral Property Taxation

A major difficulty in implementing land/site value taxation is imputing the land value of built‐on sites. The literature has focused on two alternatives. The first, residual site value, measures postdevelopment site value as property value less structure value, with structure value measured as depreciated construction costs. Residual site value would be relatively easy to estimate, but a residual site value tax system, which taxes land value before development and residual site value after development at the same rate is distortionary, discouraging density. The second, raw site value, measures postdevelopment site value as “what the land would be worth were there no building on the site (though in fact there is).” Raw site value taxation is neutral (does not distort the timing and density of development), but the estimation of postdevelopment raw site value would be complex so that assessment would likely be less fair and more arbitrary, contentious, and prone to abuse. This paper asks the question: Is it not possible to design a property tax system (taxation of predevelopment land value, postdevelopment structure value, and postdevelopment site value at possibly different rates) that employs the administratively simpler residual definition of postdevelopment site value and achieves neutrality? Under restrictive assumptions and subject to an important qualification, the paper provides an affirmative answer, and characterizes the tax rates that achieve neutrality. It also briefly discusses issues of practical implementation.     

Local Does as Local Is: Information Content of the Geography of Individual Investors' Common Stock Investments

Using data on the investments a large number of individual investors made through a discount broker from 1991 to 1996, we find that households exhibit a strong preference for local investments. We test whether this locality bias stems from information or from simple familiarity. The average household generates an additional annualized return of 3.2% from its local holdings relative to its nonlocal holdings, suggesting that local investors can exploit local knowledge. Excess returns to investing locally are even larger among stocks not in the S&P 500 index (firms for which information asymmetries between local and nonlocal investors may be largest).     

8招化解供应链风险

经济衰退和复苏都会给企业的供应链带来巨大的风险,这里,我们提供8条建议来协助企业更好地管理供应链(客户和供应商)。1可视化风险,做长远打算只有确切了解供应链中的薄弱环节所在,才能很好地控制它。