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.
Past, present and future
Twenty years ago, there was disagreement at a level of a factor of two as regards the value of the expansion rate of the Universe. Ten years ago, a value that was good to 10% was established using the Hubble Space Telescope (HST), completing one of the primary missions that NASA designed and built the HST to undertake. Today, after confronting most of the systematic uncertainties listed at the end of the Key Project, we are looking at a value of the Hubble constant that is plausibly known to within 3%. In the near future, an independently determined value of H0 good to 1% is desirable to constrain the extraction of other cosmological parameters from the power spectrum of the cosmic microwave background in defining a concordance model of cosmology. We review recent progress and assess the future prospects for those tighter constraints on the Hubble constant, which were unimaginable just a decade ago.
Palaeomicrobiology: current issues and perspectives
Palaeomicrobiology is an emerging field that is devoted to the detection, identification and characterization of microorganisms in ancient remains. Data indicate that host-associated microbial DNA can survive for almost 20,000 years, and environmental bacterial DNA preserved in permafrost samples has been dated to 400,000–600,000 years. In addition to frozen and mummified soft tissues, bone and dental pulp can also be used to search for microbial pathogens. Various techniques, including microscopy and immunodetection, can be used in palaeomicrobiology, but most data have been obtained using PCR-based molecular techniques. Infections caused by bacteria, viruses and parasites have all been diagnosed using palaeomicrobiological techniques. Additionally, molecular typing of ancient pathogens could help to reconstruct the epidemiology of past epidemics and could feed into current models of emerging infections, therefore contributing to the development of appropriate preventative measures.