Making cross-border retail finance a reality case study: Deutsche Bank PBC S.A. in Poland

Until recently, the retail banking industry was widely recognised as being predominantly a local activity. Now retail banking is increasingly affected by globalisation. Cross-border activity offers opportunities for financial institutions to boost their sales through unified marketing and client acquisition techniques. Deutsche Bank quickly recognised the advantages of a regional versus a local approach to its retail activities in Europe. This paper outlines and discusses Deutsche Bank's cross-border activity in the Polish market. Poland, which joined the European Union in May 2004, is an interesting area of study. The case study presents the Deutsche Bank approach to retail banking in Poland. The case concludes that it is not the behaviour of the customer which is the most important obstacle to cross-border retail banking, but rather the legislative environment of the individual countries. With the harmonisation of European policies in this respect, these hurdles should be eliminated gradually.     

A valuation algorithm for indifference prices in incomplete markets

A probabilistic iterative algorithm is constructed for indifference prices of claims in a multiperiod incomplete model. At each time step, a nonlinear pricing functional is applied that isolates and prices separately the two types of risk. It is represented solely in terms of risk aversion and the pricing measure, a martingale measure that preserves the conditional distribution of unhedged risks, given the hedgeable ones, from their historical counterparts.Received: 1 September 2003, Mathematics Subject Classification: 93E20, 60G40, 60J75JEL Classification: C61, G11, G13The second author acknowledges partial support from NSF Grants DMS 0102909 and DMS 0091946.     

Thinking Outside the Block: Projected Phases of Blockchain Integration in the Accounting Industry

This paper aims to propound a thorough and circumspect analysis of the implications of blockchain technology in the accounting profession and its broader industry. The analysis begins with a summary of early developments by first movers and how they are harnessing blockchain technology to improve business practices. Concomitantly, the paper will go on to discuss how this technology will streamline accounting processes, specifically as the technology approaches critical mass. Finally, a discussion of its long‐term implications will follow through a more philosophical and conceptual dialogue. Throughout the paper, criticisms will be raised to address concerns regarding blockchain's widespread use.     

Continuous-time term structure models: Forward measure approach

The problem of term structure of interest rates modelling is considered in a continuous-time framework. The emphasis is on the bond prices, forward bond prices and so-called LIBOR rates, rather than on the instantaneous continuously compounded rates as in most traditional models. Forward and spot probability measures are introduced in this general set-up. Two conditions of no-arbitrage between bonds and cash are examined. A process of savings account implied by an arbitrage-free family of bond prices is identified by means of a multiplicative decomposition of semimartingales. The uniqueness of an implied savings account is established under fairly general conditions. The notion of a family of forward processes is introduced, and the existence of an associated arbitrage-free family of bond prices is examined. A straightforward construction of a lognormal model of forward LIBOR rates, based on the backward induction, is presented.     

Front Line Work In the ‘New Model Service Firm’: Australian and Japanese Comparisons

This article assesses the claims of the management literature regarding two important aspects of front line service work; job content and relations with the immediate supervisor. It does this, firstly, by examining the relevant research literatures and, secondly, by presenting evidence from two firms based in Australia and from one based in Japan. These firms were chosen as approximating to the ideal type of the ‘new model service firm’. Evidence on knowledge, skills and creativity in the three sites suggests important commonalities with, and differences from, the ‘routine worker’ ideal type. the major difference lay in the considerable amount of internal contextual knowledge that was required in the role. Relations with the immediate supervisor were examined by focusing on the social relations of control and learning. the evidence on control and learning, cumulatively, indicated a tendency towards the supervisor adopting less of a direct control role and adopting more of a hierarchical teaching role.     

Value of a Statistical Life—the Case of Poland

This study investigates the relationship between wages and the risk of work-related death for male blue-collar workers. The size of the premium for risk and its statistical significance depend heavily on the inclusion of industry dummy variables into the regression. Irrespective of the type of risk variable used, controlling for industry at a finer breakdown lowers the price of risk and its statistical significance. Estimates of the value of a statistical life (VSL) proved to be more robust when an aggregated risk measure at three-digit occupational level was used. In this case, the VSL varied from 0.79 million USD (for the model with industry dummy variables at the three-digit level) to 2.41 million USD (for the model without industry dummy variables). To the best of the author’s knowledge, this is the first study estimating VSL using the compensating wage differential approach for countries in Central-Eastern Europe.     

Mixed systems with minimal and maximal lifetime variances

We consider the mixed systems composed of a fixed number of components whose lifetimes are i.i.d. with a known distribution which has a positive and finite variance. We show that a certain of the k-out-of-n systems has the minimal lifetime variance, and the maximal one is attained by a mixture of series and parallel systems. The number of the k-out-of-n system, and the probability weights of the mixture depend on the first two moments of order statistics of the parent distribution of the component lifetimes. We also show methods of calculating extreme system lifetime variances under various restrictions on the system lifetime expectations, and vice versa.     

The components of landline telephone survey coverage bias. The relative importance of no-phone and mobile-only populations

The continuously growing mobile-only population raises concerns regarding the representativeness of traditional landline telephone surveys. At this time, the mobile-only population differs significantly from general population, which leads to coverage bias when using fixed-line samples only for telephone surveys. However, in many European countries the mobile-only population is not the only source of coverage bias in telephone surveys. In addition, we have to consider coverage biases caused by considerable proportions of citizens without any telephone service. Since these two groups differ from the general population with respect to differential socio-demographic categories, in our view, the negative effects of mobile-only coverage error in traditional landline telephone surveys might in fact compensate—in part—for coverage bias caused by the no-phone population. To test this hypothesis of compensating coverage biases we calculated relative coverage biases caused by the mobile-only population and relative coverage biases caused by the no-phone population in 30 European countries for two socio-demographic variables in two points in time. Results are presented for four groups of countries that differ with respect to no-phone and mobile-only rates. Results suggest that—in general—mobile-only biases and no-phone biases do not compensate to a great extent, and thus the alarming mobile-only biases cannot be neglected when using telephone surveys in the estimation of population parameters. Nevertheless, there are several countries where the bias caused by the mobile-only population is far bigger than the joint bias caused by the mobile-only population and the no-phone population. This finding suggests that biases caused by the recent mobile-only population would be even more severe if the no-phone population did not exist.     

Financial distress of companies in Poland

The study examines main determinants of financial distress of companies in Poland during the recent transformation period. Data compose a sample of 1995–97 annual financial statements of 200 unlisted companies in Poland. Degree of financial distress is expressed either by the binomial variable or by the trinomial ordered variable. The attempted models (binomial and trinomial logit) explain the distress variable for 1997 by the financial indicators evaluated on the basis of financial statements from previous years. The results are sensitive to the choice of explanatory variables in the models. The forecast accuracy of the estimated models lies in the range of 80–90 percent. In the second half of the 1990's, the financial condition of companies in Poland was determined by the degree of liquidity, profitability, and the financial leverage variables.