Allocating Lending of Last Resort and Supervision in the Euro Area
The Maastricht Treaty created the European System of Central Banks and the European Central Bank to head this system. The Treaty entrusted the European Central Bank with the responsibility for monetary policy, but it did not give this institution supervisory powers or an explicit mandate for providing emergency liquidity support to individual banks. National authorities remained responsible for financial stability. As a result, in the euro area some bank regulatory functions are centralized, while others are allocated to not one, but multiple, competing national regulators. Previous researchers have discussed the potential implications of this institutional allocation of regulation on the financial stability of the region. In this chapter, we investigate instead the potential efficiency implications. We focus on the consequences of the allocation of the lender of last resort and supervisory functions for the degree of forbearance in closing distressed banks and for the level of diligence in bank supervision. We conclude that the integration of banking markets without the integration of regulatory functions increases forbearance and decreases supervision. Centralizing regulatory functions will tend to reverse this decline. If only one of the two functions is centralized, then it will be more effective to centralize the supervisory function.
Commercial Banking Structure, Regulation, and Performance: An International Comparison
The purpose of this paper is to compare and contrast the structure, regulation, and performance of banks in the EU and G‐10 countries. This enables one to identify any significant differences in the structure of banking in the nineteen separate countries comprising these two groups. The regulatory, supervisory, and deposit‐insurance environment in which banks operate in each of these countries is also compared and contrasted. This enables one to identify any significant differences in the regulatory environment that may help explain the structure of banking in the various countries. Beyond this, the effect of the overall structural and regulatory environment on individual bank performance is investigated in order to evaluate the appropriateness of existing regulations in individual countries and any proposals for reforming them. Hence, an exploratory empirical analysis based upon a sample of banks in the different countries is conducted to assess the effect of the different “regulatory regimes” on the performance of individual banks, controlling for various bank‐specific and country‐specific factors that may also affect bank performance. In this way, the paper attempts to contribute to an assessment of the appropriate balance between market and regulatory discipline to ensure that banks have sufficient opportunities to compete prudently and profitability in a competitive and global financial marketplace. In the process of conducting such an assessment, the paper necessarily provides information as to whether the U.S. is “out‐of‐step” with banking developments in other industrial countries.
Vertebral Fusion in Two Early Jurassic Sauropodomorph Dinosaurs from the Lufeng Formation of Yunnan, China
Here we describe two instances of pathological vertebral fusion in two genera of sauropodomorph dinosaurs from the Early Jurassic Lufeng Formation in Yunnan, China. The first is a specimen, of Lufengosaurus huenei with two fused cervical vertebrae, and the other is a specimen of the Lufeng basal sauropod, with two fused caudal vertebrae. Both pathologies are consistent with spondyloarthropathy and represent the earliest known occurrence of that disease in dinosaurs. The two specimens affirm that early dinosaurs suffered from the same bone diseases as living vertebrates. Spondyloarthropathy in these dinosaurs may have been induced by long-term mechanical stress, such as weight bearing, and/or limited motion at the joint that would otherwise have inhibited such remodeling. In both cases, surface remodeling suggests that the animals survived well beyond the initiation of spondyloarthropathy.