Bank Disclosure and Market Assessment of Financial Fragility: Evidence from Turkish Banks’ Equity Prices

In this paper we explore whether Turkish banks with worsening indicators of financial fragility were subject to market monitoring during the years leading to the 2000/2001 crisis, and how the quality and timeliness of the disclosure affect market reaction. We find that shareholders reacted negatively to indicators of financial fragility such as increases in maturity mismatches, currency mismatches, and non-performing loans, showing shareholders’ concerns about the impact of financial fragility indicators on future profits. We also find that audited statements that show larger reporting lags, are not informative, pointing to the need of improving their timeliness. Finally, our study suggests that the finding that securities prices react to financial fragility indicators should not be taken as sufficient evidence of banks’ safety and soundness.     

Reserves,Sovereign Wealth Funds and the Resilience of Global Imbalances

Reserves and sovereign wealth funds (SWFs) assets should be jointly considered for the assessment of global imbalances, hence their denomination as sovereign external assets (SEAs): both are public capital outflows from developing to developed countries, both hinder adjustment in current account surplus and deficit countries and, therefore, both contribute to sustain global imbalances. They represented 135 per cent and 50 per cent of net and gross US financing needs, respectively, in 2007. Reserves contribute 80 per cent and SWFs 20 per cent. They will go on providing resilience to the global imbalances, and the relative importance of SWFs is set to increase if commodity prices stay high.     

The financing of small entrepreneurs in Italy

This paper focuses on the financing of very small entrepreneurs in Italy by using data in the Survey of Household Income and Wealth. In the period 1989–2006 only a little more than one fourth of these micro-firms used bank loans for business purposes. Supply factors may have played a role in explaining this low usage of bank loans. In this paper I look at what happens after the deregulation and innovation that started in the Italian credit market during the 1990s. Financial constraints appear to have partly lessened in the current decade. Specifically, the North/South divide is fading a little: the negative direct effect on the probability of having a bank loan for a firm located in a Southern region is less strong. However, business location still plays an important role in the process of credit allocation, though indirectly through a greater sensitivity to proxies of internal finance for small entrepreneurs located in regions that are less financially developed.     

Financial markets’ behavior around episodes of large changes in the fiscal stance

Using a panel of OECD countries from 1960 to 2002, this paper shows that interest rates, particularly those of long-term government bonds, decrease when countries’ fiscal position improves and increase around periods of budget deteriorations. Stock market prices surge around times of substantial fiscal tightening and plunge in periods of very loose fiscal policy. In addition, the paper shows that results depend on countries’ initial fiscal conditions and on the type of fiscal consolidations: Fiscal adjustments that occur in country-years with high levels of government deficit, that are implemented by cutting government spending, and that generate a permanent and substantial decrease in government debt are associated with larger reductions in interest rates and increases in stock market prices.     

Regional unemployment in Spain: Disparities,business cycle and wage setting

The existence and persistence of regional disparities in the unemployment rate is a common problem of many European economies. However, in Spain, this situation exhibits a characteristic feature: a strong positive relationship with the business cycle. The analysis in this paper investigates the relationship between this distinguishing feature of the Spanish economy and changes in the regional wage-setting mechanism, and how this relationship has influenced the aggregate Spanish labour market performance in the recent past. The empirical finding of an important regional imitation effect in wage bargaining may explain both the persistence of disparities, and the positive relationship between regional unemployment dispersion and the business cycle. This result has a direct implication for employment policies, which must take into account the regional dimension of the unemployment problem.     

Automobile demand,model cycle and age effects

This paper is aimed at exploring the existence of typical patterns of automobile model life and the formal test for age effects in a discrete-choice demand framework estimated with data on the models sold in the Spanish market. Estimates show that the evolution of market shares entails and quantifies age effects resulting from consumer demand. These effects are clearly distinguishable from the impacts generated by changes in attributes and firm pricing. They carry an exogenous factor that is full of implications for firm behaviour over the life of a model: the modification of demand price sensitivities. As a result, for example, equilibrium own-price elasticities are observed to decrease until the fourth year of a model life, and then to increase again.      

An Approach to Support Negotiation Processes with Imprecise Information Multicriteria Additive Models

This paper discusses the possible uses of the VIP (Variable Interdependent Parameters) Analysis software and methodology in negotiation support. VIP Analysis is a decision support tool that incorporates complementary approaches to deal with the aggregation of multi-criteria performances under imprecise information. Its purpose is to support the evaluation of a discrete set of alternatives according to multi-attribute additive value functions. We propose extensions of the methodology of VIP Analysis to address explicitly the differences among the actors in terms of the weights space.     

Explaining the reduction in the gender wage gap during the 1990–94 economic recession in Spain

Many studies reveal that male-female wage differentials increase with the level of unemployment, suggesting that women are hurt by a recession more than men. However, the 1990–94 economic recession in Spain contributed to reduce the gender wage gap by almost 5 percentage points (from 83.94 percent in 1990 to 90.44 percent in 1994). This was mainly due to the relative increase in services industry employment, the activity where the gender wage gap is the lowest.     

Liechtenstein – Finanzmarkt und mehr

Das Fürstentum Liechtenstein ist bekannt als Steueroase und attraktiver Finanzplatz. Welche Wirtschaftskraft ist damit verbunden? Wieviel tr?gt der Finanzdienstleistungssektor dazu bei? Wie hat sich die in- und ausl?ndische Besch?ftigung in Liechtenstein entwickelt? Prof. Dr. Silvia Simon, 36, ist Professorin für Volkswirtschaftslehre an der Hochschule für Technik und Wirtschaft HTW Chur.