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Using monthly balance-sheet data of all major German credit banks, we analyze deposit withdrawals and bank failures in the German banking and currency crisis of 1931. We find that deposit withdrawals were driven by the run on the currency, but were also related to banks' liquidity positions; that branch banks were no more stable than unit banks; and that large banks were privileged, being bailed out and receiving preferential access to the discount window. These findings underline the importance of liquidity and implicit guarantees in twin crises. JEL classification: F34 E58 G21 Keywords: twin crises liquidity implicit guarantees 'too-big-to-fail'

Various initiatives have recently been proposed for improving the process of regulatory change as it affects the Australian financial sector. This paper argues that, while these initiatives are valuable, we also need to do more to engage with the rhetoric of regulation as part of the formulation, as well as the implementation, of regulatory policy. JEL Codes: G28, K22 Keywords: Financial regulation, Regulatory change, Regulatory rhetoric.

Developing countries characterized by high costs of tax collection and enforcement opt to use financial repression as an implicit tax on savings, providing the impetus for capital flight. A mechanism facilitating illicit capital movements is trade misinvoicing, where the effectiveness of capital controls would increase with the resources spent on monitoring and enforcement per one dollar of international trade. Under these circumstances, greater trade openness increases the effective cost of enforcing financial repression, thereby reducing the usefulness of financial repression as an implicit tax. This in turn implies that financial reforms tend to be the by-product of greater trade integration. Keywords: Capital controls; Financial openness; Trade openness; Collection costs; Financial repression

Public news can be expected to change market prices but, unlike 'public information,' there are differing expectations about the impact. Hence trading is necessary for the market to process these divergent views. A surprise announcement of an increase in German interest rates coupled with concurrent transactions data enables us to study in detail dealers' reactions. The patterns observed are consistent with dealers' practice to book targeted profits immediately if possible in the face of uncertainty. Evidence also shows that the speculative activity by traders in initial reaction to the news destabilized the market for the next 2 h. JEL classification: F30; G14; G15 Keywords: Exchange rate; Public news; Public information; Electronic interdealer market; Order flows

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jimonfin.2006.07.005 Byline: Thorsten Beck (a), Asli Demirguc-Kunt (a), Luc Laeven (b), Vojislav Maksimovic (c) Abstract: We use survey data on a sample of over 10,000 firms from 80 countries to assess (i) how successful a priori classifications are in distinguishing between financially constrained and unconstrained firms, and (ii) more generally, the determinants of financing obstacles of firms. We find that older, larger, and foreign-owned firms report less financing obstacles. Our findings thus confirm the usefulness of size, age and ownership as a priori classifications of financing constraints, while they shed doubts on other classifications used in the literature. Our results also suggest that institutional development is the most important country characteristic explaining cross-country variation in firms' financing obstacles. Author Affiliation: (a) The World Bank, 1818 H Street N.W., Mail Stop MC 3-300, Washington, DC 20433, USA (b) International Monetary Fund, 700 19th Street, Room HQ1 9-700B, Washington, DC 20431, USA (c) The Robert H. Smith School of Business, Van Munching Hall, University of Maryland, College Park, MD 20742, USA

Solutions for risk management decisions faced by financial networks with many intermediaries are presented.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jimonfin.2005.08.006 Byline: Fariborz Moshirian, Donghui Li, Ah-Boon Sim Abstract: Intra-industry trade (IIT) has been central to increasing the variety of products available to consumers. Unlike traditional trade theories, the recent trade theories have placed an emphasis on the role of foreign direct investment (FDI) in generating trade and increasing the volume of IIT. This study is the first study of intra-industry trade in banking services in which the key elements of the new trade theories of IIT have been taken into account in measuring the determinants of IIT in banking services. The empirical results of the determinants of IIT in banking services indicate that factor endowments, average per-capita income, FDI in banking, economies of scale in the banking sector, trade intensity between the US and its partners and market openness make a positive contribution to the volume of IIT in banking services. Furthermore, the empirical results indicate that intra-trade activities amongst the US multinational corporations reduce the level of IIT in banking services for the US. Author Affiliation: School of Banking and Finance, The University of New South Wales, Sydney, NSW 2052, Australia

With the help of the example of RBC Financial Group, a Canadian company, insight into the essentials for being great leaders in the market are discussed.

The article discusses the topic of customer attrition in the context of a European financial services company. More specifically, predictors of churn incidence are investigated as part of the customer relationship management (CRM).

In the article, an alternative to taguchi variance reduction models are proposed and studied. A study is conducted on the applications of a modified form of the reflected normal loss function for optimal process investment/ variance reduction decisions.

A method based on data envelopment analysis (DEA) is used to identify the trade offs between a financial performance metric and several nonfinancial performance metrics in the U.S. telecommunications industry. The method of study and results are discussed.

A new method to estimate value at risk (VaR), autoregressive conditional heteroskedastic (ARCH) factor, which combines multivariate analysis with ARCH models, is described. The characteristics and peculiarities of the ARCH factor and the results obtained from them are discussed.

A categorized bibliography on the application of the techniques of multiple criteria decision making to problems and issues in finance is provided. The ways in which the contribution of bibliography has come from all over the world and has fragmented literature are discussed.

The potential efficiency effects of a single market for financial services in Europe are examined. The creation of a single market for European financial industry will not bring strong efficiency gains and will prevent the single market from becoming a reality.

Large financial institutions are hard to manage, harder still to change. They are less profitable than their smaller rivals, and use their resources much less efficiently. They are stuck in [...]

Unilever reports early benefits from its use of strategic sourcing. The article discusses the lessons that managers can gain from Unilever's experiences.

Time fluctuations in the conditional correlation of property returns are measured and predicted by a bivariate GARCH covariance framework, while conditional correlation is produced by a clear distinct-time stochastic CorrARCH procedure. The superior CorrGARCH method produces various statements of stylized facts, and thus proves to be a precise out-of-sample prediction model.

Breaking the Brokers' Sexual Harassment Culture An Interview with Pam Martens Pam Martens has worked on Wall Street for the past 16 years. She is the recipient of the Woman [...]

I study a model of treasury auctions incorporating some of the important institutional features. A treasury auction is a repeated multi-unit common-value auction in which bidders bid demand functions. Another important auction with similar features is the variable-rate tender repo auction conducted by the European Central Bank. I discuss the appropriateness of the treasury auction model for analyzing repo auctions. Rankings based on differences in one-shot collusion opportunities among auctions with no entry are found in the literature. These are possibly inappropriate for treasury auctions which take place at regular intervals, and allow entry. I present a repeated auctions framework with a group of informed bidders, and free entry by uninformed outsiders. I restrict attention to the class of equilibria that satisfy a `no-arbitrage' (no profitable entry by an uninformed outsider) constraint, and rank discriminatory (pay-your-bid) and uniform-price auctions by revenue generated in the equilibria that are most favorable to informed bidders. The main contribution of the paper is a ranking of Treasury revenue across a variety of institutional set-ups, and the implied policy prescriptions. JEL Classification: D44; G18 Keywords: Repeated auction; Discriminatory auction; Uniform price auction; Minimum bid size; Random supply

In many contexts, efficiency is an important consideration in structuring auctions. In this paper, we survey several sources of inefficiency arising in auctions. We first highlight how demand reducing incentives, both in theory and in practice, affect the efficiency of multi-unit auctions. Next, we study inefficiencies arising from interdependence in bidder valuations. Again, we highlight both theoretical insights as well as how these translate in practice. Finally, we present an impossibility theorem for attaining efficiency in sufficiently rich auction contexts. An auction form suggested by Klemperer is discussed as a means of ameliorating inefficiencies arising in practice. JELS classification: D44; D82 Keywords: Auctions; Efficiency