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Article
Publication date: 13 November 2017

Charles A.E. Goodhart and Miguel A. Segoviano

This paper proposes an objective metric to trigger bank recovery. Banks’ living wills involve both recovery and resolution. Since it may not always be clear when recovery…

Abstract

Purpose

This paper proposes an objective metric to trigger bank recovery. Banks’ living wills involve both recovery and resolution. Since it may not always be clear when recovery plans or actions should be triggered, there is a role for an objective metric to trigger recovery.

Design/methodology/approach

We outline how such a metric could be constructed meeting criteria of adequate loss absorption; distinguishing between weak and sound banks; little susceptibility to manipulation; timeliness; scalable from the individual bank to the system.

Findings

We show how this would have worked in the UK, during 2007-2011.

Originality/value

This approach has the added advantage that it could be extended to encompass a whole ladder of sanctions of increasing severity as capital erodes.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 15 January 2020

Charles Goodhart

Learning often requires little or no expenditure in income; its real cost is that it takes time. The paper aims to discuss this issue.

Abstract

Purpose

Learning often requires little or no expenditure in income; its real cost is that it takes time. The paper aims to discuss this issue.

Design/methodology/approach

Since time is scarce, most people normally decide not to learn about many aspects of modern life, but rather to specialise on certain limited areas. When a matter arises outside our specialisation, we tend to follow others whose narratives we trust.

Findings

So, learning in many cases arises from social interaction, not from individual study. Consequently, informational contagion is baked into our social and economic systems.

Originality/value

Treating time, not income or wealth, as the ultimate constraint improves analysis of the learning process, clarifying its essential social nature.

Details

Review of Behavioral Finance, vol. 12 no. 1
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 10 July 2017

Charles Goodhart

The purpose of this paper is to provide a provocative and critical introduction and solutions to significant contemporary issues of financial regulation.

Abstract

Purpose

The purpose of this paper is to provide a provocative and critical introduction and solutions to significant contemporary issues of financial regulation.

Design/methodology/approach

The paper is an expert’s review of contemporary issues and challenges in financial regulation.

Findings

The paper advocates that contemporary financial regulation challenges are addressed through governance reforms and an enhanced focus on maturity transformation, rather than a focus on just capital and liquidity management. In particular, more emphasis should be given to individual decision-makers within banks rather than institutions.

Practical implications

The review paper considers areas where future regulatory reform may be enhanced and redirected.

Originality/value

The review provides original and critical perspectives on contemporary regulatory challenges.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 January 1942

Although a sheet of viscose film, such as cellophane, is so compact in structure as to be quite airtight, experimental work has shown that water vapour can evaporate as…

Abstract

Although a sheet of viscose film, such as cellophane, is so compact in structure as to be quite airtight, experimental work has shown that water vapour can evaporate as quickly from a vessel closed with it as from the open container. A wrapper composed of viscose film can be rendered impermeable to moisture vapour by covering the surfaces with a very thin layer of moisture‐proof transparent coating which often contains, as an essential ingredient, a small quantity of wax. It is wrappings of the latter “ moisture‐proof ” type which are normally used round cigarette cartons and often round biscuits and sweet packages. Unbroken films of wax are resistant to the passage of moisture vapour, and waxed papers are therefore largely used for the protection of foodstuffs. Not all waxed papers, or so‐called moisture‐vapour‐proof transparent wrappings, are satisfactorily impermeable to moisture vapour, and it is essential to test such materials to determine their actual protective powers. While complete protection against moisture exchange is advisable for most types of goods liable to dry out or for those which will deliquesce, it should be realised that there may be other factors that will prevent their being used. Some goods coated with cane sugar are found to keep best if in packings where they can “ breathe.” If, owing to a rise in temperature, the atmosphere in the moisture‐vapour‐proof wrapping should become saturated with moisture vapour, this would be deposited in droplets on the surface of the goods if the package were suddenly cooled. A dilute solution of sugar might be formed at the point of deposition, which would then be a favourable medium for the growth of aerial moulds and micro‐organisms. In many cases wrongly wrapped foods betray their deterioration by easily apparent signs, such as the hardness of bread, the stickiness of sweets or the odour of putrificd material. It is, however, quite possible for a loss in quality to occur which is only noticeable in flavour deterioration when the article is consumed, and an important instance of this is tea. Care must be taken that the wrapping itself does not impart a foreign flavour to the foodstuff packed in it, or induce one through permitting or accelerating chemical changes, such as oxidation (development of rancidity). Some of the transparent moisture‐vapour‐proof wrappings on the market have a strong flavour liable to contaminate goods wrapped in them, as have some waxed papers and ordinary “ boards ” used for cartons. Printing inks and adhesives used on cartons may also affect the flavour and odour of foodstuffs, unless properly chosen and properly used on the cartons. These odours will penetrate wrappers if the latter are not airtight, and instances are known where really expensive articles of food have been spoiled in flavour because strong‐smelling strawboards have been used as the foundation of the very elaborate and decorative boxes in which the foodstuff was packed. Rancidity development in fatty foods may be accelerated in several ways. It is well known that sunlight promotes the formation of rancidity, and fatty foods in ordinary transparent wrappings may deteriorate on this account. Attempts have been made to produce coloured transparent wrappers which will absorb the active light rays, and so prevent rancidity developing while at the same time allowing the goods wrapped to be visible. Some of these wrappers were so dark in colour that they were valueless for display purposes, but, according to advertised claims, some golden yellow transparent wrappers of good transparency and protective power are now available. There are available, however, wrappers treated with anti‐oxidants of the oat‐flour type which are claimed to arrest the development of surface rancidity of fatty foods packed in them. The last generation has seen the advent of scientific control and development in the catering business. Individual restaurants or hotels cannot afford to employ chemists, and with the exception of the large organisations owning a series of restaurants, the hotelier or restaurateur has to rely on the efforts of consultants or on the makers of the plant and machinery installed in his establishment. This help has been very valuable particularly as the amount of mechanical aids in restaurant kitchens has become during the last half century very considerable. Such devices as mechanical beaters or whippers, small doughing machines, mechanically or electrically controlled refrigerators, are but examples. Possibly one of the most interesting developments has been in the installation of mechanical washing machines for plates, dishes, cups, knives, etc. The number of pieces of china and cutlery is perhaps not appreciated. The modest two‐course lunch means that twelve articles, all of different sizes, shapes or materials of construction, must be washed; the seven‐course dinner requires 30–40 articles. The organisation to provide these articles in a steady stream sufficient for the needs of some hundreds of customers in the course of an hour or so must be very complicated, and one of the important cogs in the machine is “ washing up.” In the domestic scullery, unless particular precautions are taken, hot, hard water and soap are taken, and, by their admixture, produce a shiny scum which is mixed up with the soapy water. This scum and the water itself become loaded with grease during the washing process and the china is removed, carrying on its surface dirty, greasy, soapy water with its complement of soap scum. These are then wiped off with a drying cloth clean at first, but becoming gradually impregnated with grease, soap and scum, with the result that the surface of the china is finally covered with a thin transparent film of these objectionable substances. If the china, after removal from the wash‐bowl and when still wetted with grease‐laden soapy water, were rinsed under the hot tap until all this wash water were removed and replaced by clean hot water, and the china were then allowed to dry of its own accord, it would be chemically free from grease and would require no polishing. It would, moreover, not have to be handled at all. The essential factors of mechanical washing are therefore : (1) A detergent treatment that will emulsify all greasy substances and dislodge adherent food debris. Soap and suitable alkalis are used in this treatment. (2) A rinse treatment using clean hot water that will remove all detergent water from the china. (3) A drying treatment that is spontaneous and is carried out without touching the articles. Thus the production of washed articles entails a machine washer supplied with hot, softened water and suitable detergents; controls of rate of water supply, temperature, injection of detergent and rate of movement of china through the machine are of course all automatic. Treatment is generally in four stages—first a detergent treatment by high pressure jets, then a first and a second rinse treatment again by pressure jets, and finally a last rinse treatment provided by the incoming clean, hot, softened water taken directly from supply. The clean china is now so hot that within a few seconds of its emergence from the machine it is dry. It is then ready for use. It is only within the last century that “ gastronomy ” has been popularised, for the bulk of the population is now catered for with more care than ever before. The presentation of meals has advanced enormously, and the palatability of food has been studied with far more concern than ever before. Palatability, the controlling factor in eating, is a complicated attribute, and includes all those factors which can be considered as appealing to the senses. Sensation‐producing qualiites are odour, flavour, texture, temperature and appearance, appearance including form, design, size and colour. Palatability is no sure guide to food selection—“ Eat what you like and you need have no further concern about your food ”—modern scientific thought has demonstrated the fallacy of such a statement; nevertheless there are more factors of importance than the “ completeness ” of a food. To be informed that a mass of food contained all the necessary factors for proper nutrition has no effect on the gastric secretions, but the odour of a frying steak may make the mouth water : a badly baked meat pic, no matter how nutritious, lacks the appeal of one with the colour properly developed. This catering for masses of people has raised a number of important questions which the chemist has answered in many cases. As in the case of chain‐stores, where the public expects to get the same goods at the same price, be they purchasing in Manchester or Sidmouth, so in the case of chain‐restaurants the public demand the same standard of goods wherever they may happen to be eating. The consequence of this is that the cooking of a potato, the roasting of a joint, the frying of a fillet of fish, the production of a poached egg on toast, have to be standardised, and the chemist has collaborated with the engineer to produce the plant and machinery which will ensure, within reasonable limits, that the public be satisfied in so far as this consideration is concerned. Only a scientist can answer such questions as : for how many hours and under what conditions may a tin of sardines be kept after opening? What is the “ life ” of a meat pic in summer and what in winter? How long can Russian salad prepared under standard conditions be kept? What are the best conditions for the preparation and keeping hot of boiled cabbage : Incidentally the scientist has been forced to give attention to many problems outside the realm proper of food : for example, the standardisation of the crockery and glasses to reduce breakage to a minimum, the question of the colours to be used for the plates and cups and saucers, so that fading by the chemical treatment or by mechanical abrasion in washing or in general use be brought to a minimum. The solution of problems of the service of food in restaurants is not perhaps a spectacular field of work for the scientist, but, in view of the millions of meals served daily in England, its importance can hardly be over‐estimated. Such are some of the impacts of Science on Food. The sketch is naturally incomplete and many aspects have not been mentioned at all. The application of new scientific knowledge to food problems is continually assuming greater importance in the feeding of the people. This does not imply that science is supplanting the art of the chef; it may modify, perhaps simplify, the processes concerned with the preparation of food, but its main function is to interpret the principles on which the art is founded, and to adapt the accumulated knowledge to modern conditions.

Details

British Food Journal, vol. 44 no. 1
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 1 April 2001

Geoffrey E. Wood

This paper considers what purposes regulation and supervision of financial institutions are designed to serve. Historical experience with regulation and supervision is…

Abstract

This paper considers what purposes regulation and supervision of financial institutions are designed to serve. Historical experience with regulation and supervision is considered, and it is argued on the basis of that examination that a fairly ‘light touch’ in regulation is likely to achieve the objectives that governments and citizens require regulation to achieve. Accordingly, the paper concludes that when regulation is evaluated and compared against unregulated systems, one should be careful to compare fallible regulation with fallible markets, rather than implicitly assuming regulation is perfect. Otherwise over‐regulation will result.

Details

Journal of Financial Regulation and Compliance, vol. 9 no. 4
Type: Research Article
ISSN: 1358-1988

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Book part
Publication date: 11 November 2014

Alessandro Spano

To fill the gap in the literature with regard to public value measurement (PVM) and to provide a model for measuring public value at an individual organizational level…

Abstract

Purpose

To fill the gap in the literature with regard to public value measurement (PVM) and to provide a model for measuring public value at an individual organizational level, based on managerial control systems (MCS).

Design/methodology/approach

This article helps review the literature on PVM and propose a model for measuring the value generated by individual organizations. Measurement challenges and potential solutions are investigated.

Findings

Public value generated by an individual organization can be calculated by measuring if and to what extent the organization’s outcomes and objectives have been achieved. Public value production and measurement are part of a wider PVM process, which is congruent with the major elements of MCS, from planning to operations, and measurement to evaluation.

Research limitations/implications

This article provides knowledge to support the measurement of public value produced by public sector organizations. However, the suggested use of MCS for a comprehensive measure of the public value produced by a public body does not allow for a comparison of the public values generated by different organizations, as the value is calculated against the objectives set by that specific organization. More research is needed in order to fully utilize this model in practice.

Practical implications

The findings may help public sector organizations, policymakers and public managers measure the public value produced by a public organization as a whole.

Social implications

This article may help citizens and other stakeholders understand the public value produced by a public organization.

Originality/value

This article is based on an original research undertaken by the author and faces the relatively neglected issue of PVM. It suggests the use of public value MCS as a model for measuring public value produced by individual organizations.

Details

Public Value Management, Measurement and Reporting
Type: Book
ISBN: 978-1-78441-011-7

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Article
Publication date: 1 February 1948

F.C. Francis

The foundation collection of the printed books now forming the Library of the British Museum was that of Sir Hans Sloane. This comprised about 40,000 volumes. To it was…

Abstract

The foundation collection of the printed books now forming the Library of the British Museum was that of Sir Hans Sloane. This comprised about 40,000 volumes. To it was added in 1759 the Royal collection, begun in the time of Henry VII and inherited by George II from his predecessors on the throne.

Details

Journal of Documentation, vol. 4 no. 1
Type: Research Article
ISSN: 0022-0418

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Article
Publication date: 1 March 2002

KEVIN DOWD

The pre‐commitment approach to bank capital regulation proposes that banks self‐select capital reserve requirements, facing penalties ex post for incurring losses in…

Abstract

The pre‐commitment approach to bank capital regulation proposes that banks self‐select capital reserve requirements, facing penalties ex post for incurring losses in excess of reserves, hence providing incentives for high‐ risk banks to choose higher capital requirements. In order to assess the validity of the pre‐commitment approach, this article analyzes its comparative statics within the context of a standard European option written against the bank's capital base. The author finds that this approach works when it is not needed (when banks possess unlimited capital and hence cannot fail), but not when it is.

Details

The Journal of Risk Finance, vol. 3 no. 4
Type: Research Article
ISSN: 1526-5943

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Book part
Publication date: 26 August 2019

Arnaud Manas

Before it was fully nationalized in 1945, the Banque de France was a listed company that distributed dividends to its shareholders and was listed on the Paris stock…

Abstract

Before it was fully nationalized in 1945, the Banque de France was a listed company that distributed dividends to its shareholders and was listed on the Paris stock exchange. By comparing with other stocks and indexes, I show that, in spite of large earnings, Banque de France’s stock was a lackluster but popular investment. By examining the distribution of profits between the state and ordinary shareholders, I show that the state began to exert an influence over the Bank well before its nationalization, in the nineteenth century, amounting to a stealthy takeover. I then go on to analyze the Bank’s formal governance framework and the power of its regents (directors). Using a novel method to compute the shareholders’ statistical distribution, I conclude that small new shareholders who were less sophisticated bought predominantly shares from old larger shareholders. Eventually, most of the shareholders were “petit-bourgeois” passive rentiers who accepted the mediocre performance and kept reelecting the regents. I conclude by saying that the power of the 200 largest shareholders (“200 families”) was a political myth with little foundation in reality.

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Article
Publication date: 1 March 1995

MICHAEL TAYLOR

The collapse of Barings Bank in February this year provided a stark illustration of the need for adequate systems and controls in managing trading risks. This paper…

Abstract

The collapse of Barings Bank in February this year provided a stark illustration of the need for adequate systems and controls in managing trading risks. This paper reviews the current advice on best practice from regulators, industry groups and government agencies. It emphasises the importance of strong corporate governance, the need for a strong risk management infrastructure, and suggests ways in which the incentives for excessive risk‐taking generated by existing systems of bonus payments might be corrected. The paper also recommends each firm perform an annual risk control assessment under the direction of its audit committee. It concludes by arguing that enhanced public disclosure has an essential role to play in providing an additional discipline on the board and senior management to ensure the adequacy of systems and controls.

Details

Journal of Financial Regulation and Compliance, vol. 3 no. 3
Type: Research Article
ISSN: 1358-1988

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