Business Commons^™

Hong Kong Sar: Full Deposit Guarantee, Ezekiel Vergara, Lily S. Engbith

Journal of Financial Crises

Following a run on Hong Kong’s fifth-biggest bank in September 2008, the Hong Kong government announced that it would use its Exchange Fund to extend full insurance temporarily to depositors at approved banks. The existing Deposit Protection Scheme (DPS) would continue to insure the first 100,000 Hong Kong dollars (HKD; about USD 13,000) per depositor at each bank; the new program would cover the rest. It also covered a broader set of institutions. The Hong Kong Monetary Authority (HKMA) administered the program, overseen by the Hong Kong Deposit Protection Board (HKDPB); the HKMA was also responsible for managing the Exchange …

France: Deposit Guarantee Fund, Ezekiel Vergara

Journal of Financial Crises

In October 2008, during the Global Financial Crisis (GFC), European Union (EU) officials urged member states to raise their minimum deposit-insurance coverage to at least EUR 50,000 (USD 68,000) to promote confidence in banks. France did not need to increase its deposit-insurance cap to meet this target, as it already guaranteed EUR 70,000. The following year, EU officials passed a directive that required all member states to permanently increase their minimum deposit-insurance coverage to EUR 100,000 by December 31, 2010. French authorities complied with the EU’s directive on September 29, 2010. The Fonds de Garantie des Dépôts (FGD), a private …

Brazil: Time Deposits With Special Guarantee, Sharon M. Nunn

Journal of Financial Crises

Uncertainty from the Global Financial Crisis spread to the Brazilian financial system in 2008, triggering a flight to quality toward assets with explicit or implicit government guarantees. In the Brazilian context, this meant depositors pulled funds from small and medium-size banks and parked them in larger banks that investors believed the government was more likely to backstop. The National Monetary Council (CMN) created the Time Deposits with Special Guarantee program (DPGE) in March 2009 to bolster liquidity in small and medium-size banks. The CMN put the country’s existing deposit insurer, the Credit Guarantee Fund (FGC), in charge of administering the …

Belgium: Protection Fund/Special Protection Fund, Adam Kulam

Journal of Financial Crises

At the height of the Global Financial Crisis (GFC) in fall 2008, the Belgian government increased the coverage limits of its deposit guarantee to restore faith in its banking system, protect savers and depositors, and safeguard financial stability. Belgium joined the European Union’s (EU) efforts to strengthen deposit guarantee systems. The measures complemented the Belgian government’s other efforts to secure domestic banks. The government implemented the emergency measures in October and November 2008 through royal decrees, which Parliament later incorporated into law. In a five-week span, Belgian authorities increased the deposit guarantee from EUR 20,000 to EUR 100,000 (USD 26,820 …

Austria: Unlimited Deposit Guarantee, Sharon M. Nunn

Journal of Financial Crises

After Germany and Ireland implemented unlimited deposit guarantees, Austrian officials passed a law on October 26, 2008, that removed deposit-insurance limits for individual depositors, fearing that Austrians would move their money to countries with higher deposit coverage. The government established the program using the country’s existing, mandatory deposit-insurance system (DIS), which was private, ex post funded, and segmented into sectoral schemes that covered different kinds of financial institutions. During payouts, the schemes covered the first EUR 50,000 (USD 67,000) of guaranteed funds to a given depositor, and the government the government covered the rest. The government required all financial institutions …

Broad-Based Emergency Liquidity Programs, Rosalind Z. Wiggins, Sean Fulmer, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

In this paper, we analyze broad-based emergency liquidity (BBEL) programs. Our main purpose is to assist policymakers who are considering establishing a BBEL program in designing the most effective program possible as efficiently as possible. Our insights are derived from 33 case studies the Yale Program on Financial Stability produced and existing literature on the topic.

Liquidity provision is a long-established mandate of central banks and was a function that private entities performed even before the establishment of central banks. We survey a sampling of cases from the 19th through 21st centuries, drawn from 10 countries and regions, to distill …

Australia: Financial Claims Scheme, Ezekiel Vergara

Journal of Financial Crises

Following the collapse of Lehman Brothers on September 15, 2008, the Australian government intervened in its own banking system, both to support domestic depositors and to keep its banking system competitive with those in countries whose regulators had already intervened. On October 12, 2008, the Australian government announced the Financial Claims Scheme (FCS) to insure bank depositors. The deposit guarantee automatically insured depositors at all authorized deposit-taking institutions and covered a range of deposit accounts. As initially announced, the FCS would provide a blanket guarantee to all depositors with no fee for participation. This blanket guarantee, however, prompted a migration …

Market Support Programs: Covid-19 Crisis, June Rhee, Lily S. Engbith, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper is an analysis of important considerations for policymakers seeking to establish a market support program (MSP). Our main purpose is to assist policymakers who have already made the decision to use an MSP in designing the most effective program possible. Our insights derive from 23 case studies the Yale Program on Financial Stability produced and existing literature on the topic.

By the onset of the Global Financial Crisis (GFC), market-based finance and traditional banking systems were significantly intertwined, and the panic in market-based finance threatened to spread quickly to both traditional banks and the real economy. In response, …

Account Guarantee Survey, Christian M. Mcnamara, Adam Kulam, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 27 account guarantee (AG) programs across 14 Key Design Decisions. The main themes that emerge are: (a) the importance of considering the effects of AG programs on other parts of the financial system or other jurisdictions, (b) the ability to address moral hazard through heightened supervision, which removes a potential obstacle to adopting AG programs in response to the acute phase of crises, (c) the necessity of developing guarantees that are credible and timely, and (d) the need to design standing AG programs with an eye toward how they will function during crises.

Dividends And Bank Capital In The Global Financial Crisis Of 2007–2009, Viral V. Acharya, Irvind Gujral, Nirupama Kulkarni, Hyun Song Shin

Journal of Financial Crises

The headline numbers appear to show that even as banks and financial intermediaries suffered large credit losses in the Global Financial Crisis of 2007–2009, they raised substantial amounts of new capital, both from private investors and from government-funded capital injections. However, on closer inspection, the composition of bank capital shifted radically from one based on common equity to that based on debt-like hybrid claims such as preferred equity and subordinated debt. The erosion of common equity was exacerbated by large-scale payments of dividends, in spite of widely anticipated credit losses. Dividend payments represent a transfer from creditors (and potentially taxpayers) …

Does Finance Make Us Less Social?, Henrik Cronqvist, Mitch Warachka, Frank Yu

Business Faculty Articles and Research

Informal risk sharing within social networks and formal financial contracts both enable households to manage risk. We find that financial contracting reduces participation in social networks. Specifically, increased crop insurance usage decreased local religious adherence and congregation membership in agricultural communities. Our identification utilizes the Federal Crop Insurance Reform Act of 1994 that doubled crop insurance usage nationally within a year, although changes in usage varied across counties. Difference-in-difference and Spatial First Difference tests confirm that households substituted insurance for religiosity. This substitution was associated with reductions in crop diversification and crop yields, indicating an increase in moral hazard.

A Primer On The Income Tax Consequences Of The Ncaa’S Name, Image And Likeness (Nil) Earnings For College Athletes, Marena M. Messina, Frank M. Messina

Journal of Athlete Development and Experience

NCAA domestic college athletes can now financially benefit from their name, image, and likeness (NIL). The purpose of this article is to “educate” athletes on the new NIL rules in financial literacy. With new NIL income flowing to athletes, federal income tax consequences of these transactions must be addressed. This article results in a detailed introduction to the applicable federal tax rules regarding NIL income for athletes to stay in compliance with those laws. From understanding NIL income, to how the tax formula works, what tax forms apply, and what taxes may be due, this article provides a comprehensive toolkit …

“Fiscal Trap”, The Case Of Greece, Titos Ritsatos

Southern University College of Business E-Journal

Present research aims at the introduction of the term “Fiscal Trap” in economic literature, as a comprehensive definition of the economic situation in which any available combination of fiscal-only policy measures (tax increases and austerity measures), would fail to fulfill fiscal targets during periods of recession. Using recent experience from the case of Greece, an ex-post evaluation of adopted policy effectiveness is pursued. Fiscal austerity and increased taxation enforced in Greece during the years 2009-2012, resulted in decreased tax revenues, lower GDP and increased debt-to-GDP ratio. In order to slip away from the vicious cycle generated by austerity and tax …

The Terrorist Laffer Curve:Rationality And Insurgency In Iraq, 2004-2008, Dennis S. Edwards

Southern University College of Business E-Journal

While the original framework by Arthur Laffer focused on tax rates and the resulting revenue from such taxation, the Laffer curve has been applied to other studies in behavior as well. This paper details evidence of a Laffer curve in Iraq with respect to terrorist violence and Iraqi public support of that violence against the U.S.-led coalition forces. As insurgents began killing more Iraqi citizens in their attacks on U.S.-led forces, the increased lethality caused initial support of such violence to erode. As a result, the high-level terrorist hierarchy has suggested that its operatives reduce lethality and indiscriminate bombings.

Building An Equitable Food System In Georgia With Future Farmers: A Business Case Study, Yukta Sinha

Dartmouth College Master’s Theses

My thesis aims to investigate how a mobile application called Future Farmers ©, that connects farmers with retailers bypassing middlemen, can increase farmers’ bargaining power thereby creating an equitable food system. More specifically, my thesis seeks to analyse the application’s viability in the country of Georgia. Drawing upon primary data collected through interviews with farmers and retailers as well as a review of relevant literature, this research will utilize a mixed-methods approach to explore the impact of this technology on the agricultural industry in Georgia. The company’s revenue projections and market access are just some aspects evaluated while qualitative information …

Cryptocurrencies: Now What?, Wei Zhou, Fathurraman

Perspectives@SMU

New use cases could lead to wider adoption, but regulation and the transition to Web3 must be handled first

Regulating The Fintech Space, Jing Yang, Patrick Thng, Zhu Juntao, Kell Jay Lim

Perspectives@SMU

China gets to grips with fintech but still frowns upon cryptocurrencies. Regulation, blockchain technology, and central bank digital currencies will be under the spotlight amidst the crypto crash

Chinese-Backed Fintech Lending Boom: How Did Indonesia Respond?, Angela Tritto, Yujia He, Victoria Amanda Junaedi

Diplomacy and International Commerce Reports

Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches.

Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms.

Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion.

A proactive approach towards monitoring and regulating …

Equity Market Structure And The Persistence Of Unsolved Problems: A Microstructure Perspective, Robert A. Schwartz, James Ross, Deniz Ozenbas

Department of Accounting and Finance Faculty Scholarship and Creative Works

This article presents a brief historical perspective on the evolution of equity market structure and considers implications microstructure analysis has had for improving market structure. Since the 1975 Securities Acts Amendments mandated the development of a National Market System, the robust growth of institutional investing and the impact of striking technological change have been transformative. Yet, market impact costs and price discovery noise continue to accentuate short-period returns variance, and the article presents empirical evidence of how sizable that accentuation is. In dealing with this problem, the authors focus on the rules that govern how orders are integrated together and …

The Return Of The Call Auction, Deniz Ozenbas, Robert A. Schwartz

Department of Accounting and Finance Faculty Scholarship and Creative Works

A call auction is a form of trading that died out in the precomputer age but has made its reentrance in electronic markets and is currently a significant component of major stock markets globally. In contrast with a continuous market in which a transaction is made any time a buy and a sell order meet or cross in price, call auctions batch orders together for execution in multilateral trades at specific points in time. The electronic call, an important innovation in market structure, has unique benefits concerning liquidity provision, intraday volatility control, and price discovery accuracy. NASDAQ introduced electronic calls …

Editor's Note, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Red Flags And Risks: Unpleasant Surprises When An Office Manager Suddenly Leaves, David Harris Cpa

The Journal of the Michigan Dental Association

Losing an office manager can pose significant challenges for dental practices. This article delves into the red flags and potential risks that may accompany an office manager's sudden departure, shedding light on the importance of understanding the circumstances surrounding their exit. The article highlights how embezzlement can be a reason behind unexplained departures and emphasizes the need to assess the situation more deeply. It explores account ownership issues that can hinder practice owners from accessing crucial business information, particularly in embezzlement investigations. The article recommends proactive measures for practice owners to secure access to vital accounts to prevent potential issues …

Review Of Human Resource Management (Hrm) Literature: A Bibliometric Analysis (1981-2019), Md. Abul Kalam Azad, Md. Abdullah Al Mamun, Naznin Akther, Golam Sorwar

DLSU Business & Economics Review

This study reviews Human Resource Management (HRM) literature by adopting a hybrid research approach - bibliometric analaysis and content analysis - on 1802 documents from the Scopus database. Results from the bibliometric analysis shows HRM research presence in the areas of data sciences, information technology, and organizational behavior. A content analysis of 100 articles exploresd five different streams of HRM literature: (1) safety issues, (2) HRM technology, (3) business model and HRM, (4) information and knowledge management, and (5) HRM and teamwork. This study works as a lens focusing on the construction of practical issues and concepts in HRM literature. …

Women On Corporate Boards: A Systematic Literature Review And Future Research Agenda, Nufazil Ahangar

DLSU Business & Economics Review

This paper provides a current systematic literature review of the literature on women on corporate boards. The focus is on both theoretical and empirical studies on women on corporate boards. The influence of women on corporate boards on a wide range of corporate financial and non-financial performance measures is likewise explained. Additionally, this paper also provides a broad overview of a number of antecedents affecting the appointment of women on corporate boards at multiple levels.

Analysis Of The Impact Of Dividend On Returns Based On Market Condition, Bernardus Yuliarto Nugroho, Ferdinand D. Saragih

DLSU Business & Economics Review

This study investigates the dividend’s impact on returns with profitability and free cash flow as control variables. The purpose of this paper is to analyze the effect of dividends on returns during both advancing and declining markets. The data utilized as the sample was gathered from non-financial companies listed on the Indonesian Stock Exchange from 2008 to 2017. The generalized least square method was used to analyze the impact of dividends on returns during advancing and declining markets. Variables used in this investigation are Dividend, Return, Beta, Market Capitalization, Book Value of Equity, Profitability, and Free Cash Flow. Results show …

Contributors, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Investigating The Impact Of A Conditional Cash Transfer On Adolescent Pregnancy: Incidence And Health Outcomes, Mitzie Irene P. Conchada, Marites M. Tiongco, Dominque Hannah Sy

DLSU Business & Economics Review

The literature on conditional cash transfers focuses on the impact of such on health and education outcomes. The Pantawid Pamilyang Pilipino Program in the Philippines provides a cash grant conditional on requirements related to health and education. We investigated the impact of the program on adolescent pregnancy through its link to education. The program, which is designed to increase teen education, may lead to decreased adolescent pregnancy because it adds to the opportunity cost of getting pregnant. Though the incidence of pregnancy among adolescent women rates in the Philippines have declined over the past thirty years, a considerable number of …

On Precaution Versus Covid-19: Are People Really Complacent?, Renz Adrian T. Calub

DLSU Business & Economics Review

As of this writing, the Philippines is experiencing a surge in COVID-19, a year after implementing nationwide lockdowns and curfews. Although vaccines are being shipped and rolled out, the country appears to be regressing, with hospitals being filled to the brim. Complacency has been the usual suspect, with the government blaming individuals and business establishments for not staying at home and for not observing the minimal health protocols. But are people really complacent? This paper develops a simple game to address such a question.

Does Media Affect Adherence To Covid-19 Quarantine Protocols?, Luz Suplico-Jeong, Reynaldo Bautista Jr., Noel Sajid Murad, Nelson Guillen Jr.

DLSU Business & Economics Review

The Philippines, which has experienced community quarantine from March 2020 to the present, is one country that has imposed quarantine protocols. Although the Philippine government imposes penalties on those who do not follow the quarantine protocols, the success of quarantine depends on the individual’s adherence to quarantine protocols. This study examined if media affected adherence to COVID-19 protocols. 334 residents from lloilo, Philippines were surveyed. Using the Theory of Planned Behavior as a framework, the results showed a positive relationship between (1) attitude and quarantine adherence, (2) controllability and quarantine adherence, and (3) media and quarantine adherence. This implies that …

Impact Of Covid-19 On The 2020 Financial Results Of Selected Philippine Publicly-Listed Companies, Cynthia P. Cudia, Ezra L. Panopio

DLSU Business & Economics Review

This paper evaluates the impact of the COVID-19 pandemic on the 2020 financial results of selected Philippine Publicly- Listed Companies (PLCs) in the Philippine Stock Exchange.. Using ratio analysis to determine the consequences of this infectious disease affecting PLCs, results show a decline in the percent-change in revenue, expenses, and net income from the average figures for 2017 to 2019 to corresponding figures for 2020. Content analysis revealed that most Philippine PLCs disclosed high and medium details as to the impact of COVID-19. Furthermore, the study’s results demonstrated that most PLCs provided qualitative or quantitative details about the respective measures …