The regulation of and by algorithms has become of growing relevance to the delivery of public services, coinciding with the related interest in open and big data. Debates about the consequences of the rise of algorithms have been however limited. Early contributions considered whether the rise of algorithmic regulation and new information technologies represented a fundamental (mostly benevolent) change […]
When it was reported that there had been no deaths from commercial passenger jet accidents in 2017, President Trump was quick to claim credit on Twitter: “Since taking office I have been very strict on Commercial Aviation. Good news – it was just reported that there were Zero deaths in 2017, the best and safest year on record!”
But the […]
Sometimes we ask ourselves: after the damages caused by the financial crisis, what has been done to limit the misbehaviour of those who run the banks? The answer is that a huge number of regulations has been introduced, but often they are bypassed. An example for all: the loophole in bankers’ bonus cap.
A loophole in the bonus cap
Let’s take […]
There have been a variety of systemically important banking issues making the headlines since the global recession of 2008, but the challenge to mitigating credit risk during settlement seems to be a constant frontrunner. This article discusses the importance of effective liquidity management, particularly from the sphere of timely payment settlement via financial market utilities (FMUs), defined as “multilateral systems that […]
Technology and finance have always gone together. So what’s new this time around? Virtual currencies are part of a broader tech revolution that is driving fundamental change in the global economy.
While the money is virtual, the rewards and the risks are very real. It boils down to this: how best to encourage financial innovation while regulating to protect consumers […]
Why and how firms hedge has been an area of interest in corporate finance for a long time. The traditional notion of hedging is matching one risk with an opposing risk. Gains on the hedge offset the losses on the position otherwise exposed to price uncertainty, making the resulting cash flow volatility lower. The traditional theories of corporate risk […]
Until recently, the lamentations (right, wrong or simply irrational) of the world’s discontent were only a nuisance to the status-quo. The proliferation of social media, however, has facilitated the dissemination of irrational ideas. A notion which required generations to gain traction is now instantaneously impressed on the minds of numerous, ready and willing subjects throughout distant lands. As a […]
The Basel Committee on Banking Supervision (BCBS) has designed complex rules for defining sufficient capital at internationally active financial institutions. Pillar II of the Basel Accord requires national supervisors to assure continuous compliance with capital standards, which require a minimum ratio of the book value of equity capital to a bank’s risky assets. An adequate Tier 1 capital ratio […]