Banks, Credibility, and Macroeconomic Evolution after a Production Shock
One of the important functions of financial intermediation is intertemporal risk smoothing. In
this paper we study the effects of a production shock in a closed economy and compare the
abilities of market-based and bank-based financial systems in processing the shock. The
analysis of the shock propagation indicates that a competitive banking system may collapse
in the absence of a proper regulation. Paradoxically, it is the credibility of banks that makes
bank-based economies fragile. A necessary and sufficient condition for successful bailout
schemes is proposed.
The paper analyses how the individuals' deposits influences the resources of Russian banks. We show that the depositors panic in the crisis has a serious effect on stability of both bank and national bank system. We show the tendencies how the volume and structure of individuals' deposits change; how to avoid the rash of withdrawals by individual depositors; and how the resources of Russian banks shrank because of such withdrawals happened in the period of the crisis. We also present our assessment of how the resources of Russian banks reduced because of the rash of withdrawals in the crisis.
With a view to ensuring a follow up of the implementation of the Recommendation, the International Labour Office was instructed to assist constituents in developing national policies and setting up monitoring and implementing mechanisms, as well as to promote good practices at the national and international levels concerning the determination and use of employment relationships. In response to that decision, the International Labour Office, developed in 2007 an Annotated Guide to Recommendation No. 198 using the technical expertise of a group of experts from around the world which presented examples in law and practice on how the various aspects of the Recommendation were being dealt with in many countries in different regions. Over the recent years, there have been increasing developments at the European level regarding the employment relationship in legislation, case law, collective agreements and soft law. In this context, the ILO, and in particular the then Industrial and Employment Relations Department (DIALOGUE) undertook a strategic partnership with the European Labour Law Network (ELLN), a network of independent legal experts from all European Union Member States and European Economic Area countries, in order to produce an updated version of the 2007 annotated Guide with a specific focus on European countries. The European Labour Law Network was established in 2005 on initiative of Professors Guus Heerma van Voss (University of Leiden) and Bernd Waas (University of Frankfurt am Main), the latter being the editor of this Guide. The European Labour Law Network is comprised of non-governmental legal experts from all European Member States and the EEA countries. In December 2007, the European Labour Law Network signed a contract with the Directorate-General for Employment, Social Affairs and Inclusion of the European Commission in Brussels (formerly the Directorate-General for Employment, Social Affairs and Equal Opportunities) and, under the name ‘European Network of Legal Experts in the Field of Labour Law, dealing with both individual and collective rights/aspects’, became the European Commission’s official advisory board on issues relating to developments in individual and collective labour law. In this capacity, the Network has been conducting extensive research for the European Commission. Among other things, it produced a Thematic Report on the “Characteristics of the Employment Relationship” in 2009. This guide builds upon up-dated information analysed in that research project. (More information at: http://www.labourlawnetwork.eu). In summer 2013 International Labour Office approached Russian labour law scholars, - associate professors Elena Gerasimova (NRU HSE), Nikita Lyutov (MSAL, NRU HSE) and Daria Chernyaeva (NRU HSE), – with a suggestion to prepare a Russian translation of the Gude and to amend it with materials concerning the CIS countries.
We proposed the nonlinear dynamic model of the formation of the market prices of precious metals based on the econophysic considerations. This model is a system of three ordinary differential equations relating the time dependence of elasticity, variations of bid and ask prices; it is similar to the Lorenz system. The areas of the dynamic stochasticity in experimental data were found with the comparing of the experimental and the theoretical ask and bid prices. These areas are the precursors of the crisis mode in the form of dynamic chaos.
The Working Paper examines the peculiarities of the Russian model of corporate governance and control in the banking sector. The study relies upon theoretical as well as applied research of corporate governance in Russian commercial banks featuring different forms of ownership. We focus on real interests of all stakeholders, namely bank and stock market regulators, bank owners, investors, top managers and other insiders. The Anglo-American concept of corporate governance, based on agency theory and implying outside investors’ control over banks through stock market, is found to bear limited relevance. We suggest some ways of overcoming the gap between formal institutions of governance and the real life.
Using data on foreign borrowing, I identify Russian banks that were affected by the sudden stop of external financing caused by the Lehman Brothers’ collapse. Applying the difference-in-difference method, I compare these «affected» banks to «unaffected» ones and find that the Russian Central Bank’s (CBR) anti-crisis financial assistance primarily went to the former group. Tracing the impact of the CBR’s liquidity infusions on banks’ portfolio allocation decisions, I find that banks used CBR funds not only to pay out foreign debt, but also to accumulate cash deposits in non-resident banks. I also find that affected banks increased their holdings of market securities significantly more than unaffected ones, which suggests that the CBR’s bailout policies impacted their risk-taking strategies. While there was no significant difference in corporate lending growth between the two groups after the sudden stop, lending to borrowers with weaker banking relationships (individuals and entrepreneurs) decreased more among affected banks.
The Group of Eight (G8) has had extensive and even existential experience with financial crises (Kirton 2007). The groups creation was driven by financial crises created by and in the US, in the form of the Nixon Administration’s unilateral destruction of the Bretton Woods system of fixed exchange rates on August 15, 1971 and the imminent bankruptcy of New York City at the time of the first summit at Rambouillet in November 1975. Then came a succession of real and potential crises, notably Britain’s need for support from the International Monetary Fund (IMF) in the mid 1970s and Italy’s need in 1976, the developing countries debt crisis of the early 1980s, the American stock market plunge of October 1987, the attack on the European Monetary System (EMS), the Mexican peso crisis starting on December 20, 1994, the Asian-turned-global financial crisis of 1997–1999, the 9/11 terrorist attacks on America, the Enron–dot.com bust and the America-turned-global financial crisis from 2008 to now. Since the G8’s 1975 start, such crises have been created by others to afflict a vulnerable America, and been created by America to attack the rest of the world. In both cases such crisis have been conscious, calculated controlled and targeted, as on August 15, 1971 and September 11, 2001, and unco.nscious, uncalculated, uncontrolled and untargeted events characterized by contagion, complexity and uncertainty that no one can fully comprehend, as in the global crisis from 2008 until now.
Smoking is a problem, bringing signifi cant social and economic costs to Russiansociety. However, ratifi cation of the World health organization Framework conventionon tobacco control makes it possible to improve Russian legislation accordingto the international standards. So, I describe some measures that should be taken bythe Russian authorities in the nearest future, and I examine their effi ciency. By studyingthe international evidence I analyze the impact of the smoke-free areas, advertisementand sponsorship bans, tax increases, etc. on the prevalence of smoking, cigaretteconsumption and some other indicators. I also investigate the obstacles confrontingthe Russian authorities when they introduce new policy measures and the public attitudetowards these measures. I conclude that there is a number of easy-to-implementanti-smoking activities that need no fi nancial resources but only a political will.
One of the most important indicators of company's success is the increase of its value. The article investigates traditional methods of company's value assessment and the evidence that the application of these methods is incorrect in the new stage of economy. So it is necessary to create a new method of valuation based on the new main sources of company's success that is its intellectual capital.