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This paper aims to analyze how banks transmit shocks that hit the debt market to their borrowers. Recent financial crisis demonstrated that the banking system can be a pathway for shock transmission.

Bank-level panel regressions.

This paper shows that when banks experience a shock to the cost of their bond financing, they pass a portion of their extra costs or savings to their corporate borrowers. While banks do not offer special protection from bond market shocks to their relationship borrowers, they also do not treat all of them equally. Relationship borrowers that are not bank-dependent are the least exposed to bond market shocks via their bank loans. In contrast, banks pass the highest portion of the increase in their cost of bond financing to their relationship borrowers that rely exclusively on banks for external funding.

These findings show that banks put more weight on the informational advantage they have over their relationship borrowers than on the prospects of future business with these borrowers. They also show a potential side effect of the recent proposals to require banks to use CoCos or other long-term funding.

The findings are timely, given the ongoing debates on the proposals to introduce bail-in programs and proposals to require banks to use CoCos or other long-term funding.

This paper aims to clarify the effects of introducing depositor preference on resolution costs, probability of default and bank funding costs, allowing for the possibility of collateralized funding.

The importance of conflict among creditors in generating bankruptcy costs is documented. A model of such a conflict is provided, which is then used in analyzing the effects of depositor preference and other forms of asset encumbrance. The model takes into account the reactions of providers of secured and unsecured financing.

Depositor preference and collateralization of borrowing may reduce the cost of settling the conflicts among creditors that arises in case of resolution or bankruptcy. This net benefit, which may be capitalized into the value of the bank rather than affect creditors’ expected returns, should result in lower overall funding costs and thus a lower probability of distress despite increasing encumbrance of the bank’s balance sheet. The benefit is maximized when resolution is initiated early enough for preferred depositors to remain fully protected.

The interaction of asset encumbrance with liquidity risk is not addressed directly.

The issues addressed on the paper are currently the subject of debate by regulators and market participants. There are direct implications for prudential regulation and bank resolution policies.

The theory of conflict resolution is applied to bankruptcy and bank resolution, generating rigorous analysis of an important practical issue.

The purpose of this paper is to examine funding models for Open Access (OA) digital data repositories whose costs are not wholly core funded. Whilst such repositories are free to access, they are not without significant cost to build and maintain and the lack of both full core costs and a direct funding stream through payment-for-use poses a considerable financial challenge, placing their future and the digital collections they hold at risk.

The authors document 14 different potential funding streams for OA digital data repositories, grouped into six classes (institutional, philanthropy, research, audience, service, volunteer), drawing on the ongoing experiences of seeking a sustainable funding for the Digital Repository of Ireland (DRI).

There is no straight forward solution to funding OA digital data repositories that are not wholly core funded, with a number of general and specific challenges facing each repository, and each funding model having strengths and weaknesses. The proposed DRI solution is the adoption of a blended approach that seeks to ameliorate cyclical effects across funding streams by generating income from a number of sources rather than overly relying on a single one, though it is still reliant on significant state core funding to be viable.

The detailing of potential funding streams offers practical financial solutions to other OA digital data repositories which are seeking a means to become financially sustainable in the absence of full core funding.

The review assesses and provides concrete advice with respect to potential funding streams in order to help repository owners address the financing conundrum they face.

Many countries around the world are facing great challenges from their ageing population with shrinking workforce, this will put more pressure on their financial system and will increase the public spending on care costs provided to older people. Egypt is in the phase of establishing a new law for older people care's rights, a law that will organise how older people in need for care would benefit from access to government financial support and how will families support their older relatives financially and how the care costs will be shared between the older people, their families and the government.

The paper examines the suitability two cost-sharing methods and applying them to assess the effect on the individuals and families' income strain.

The preferred approach can be used for sharing costs as it applies a gradual funding withdrawal by the government and provide more fairness and flexibility for application in different regions. Besides, the parameters of this approach can be used by policy makers to control the levels of funding.

The paper will be the first to discuss the intergenerational fairness from a financial perspective in Egypt to avoid forcing older people into poverty or resorting to poverty trade-off.

Not much information is broadly shared about how current system and resource library funding formulas operate. Do the formulas encourage or discourage certain programs or services? How are systems and resource libraries funded across the country? These questions are vital to systems looking for fiscal models that work. Having examined the costs of basic services provided by the seven Colorado regional library service systems and the Colorado Resource Center (CRC) previously in the Bottom Line (Fall 1990, pp. 18–24), this second article reviews the current funding formulas for the systems and the CRC.

The purpose of this paper is to analyse the interaction between a profit maximising mortgagor and a newcomer to a mortgage market with Bertrand competition where the newcomer has a populistic entry strategy and undercuts mortgage market rates. The intention of the paper is to relate the populistic entry strategy to mortgage market characteristics and the strategic market position of both the established mortgagor and the newcomer in question.

The paper analyses a mortgage market by combining the behaviour of a profit maximising mortgagor with that of a newcomer to the mortgage market which has a populistic entry strategy and does not maximise profits. The short-run market solution provides comparative statics on the strategic market position of both the established mortgagor and the newcomer to the mortgage market during the entry phase both related to product differentiation and to price mirroring and undercutting of mortgage rates.

The model finds a mortgage market solution where a lower mortgage rate helps the newcomer gain a customer base. As the newcomer's strategy to mirror prices makes it unable to pass-through funding cost to its mortgage rate, the strategy is unsustainable over time. The established mortgagor has a strategically beneficial position as the mortgage market rates only relate to its funding cost. Unless the newcomer has a funding cost advantage, the established mortgagor has a higher interest rate margin. Differentiation impacts the newcomers’ interest rate margin positively. If the newcomer lacks a funding cost advantage, there is a critical mirroring rate that ensures it a higher interest rate margin. The higher the newcomers’ own funding cost, the higher is the upper bound for price mirroring, relating market entry to a small undercutting of mortgage rates and a mortgage market with weak competition. The funding cost of the established mortgagor pulls pricing in the opposite direction, allowing for a lower mirroring rate and tougher mortgage market competition during entry.

The paper aims to contribute to the understanding of market equilibrium in the absence of profit maximising behaviour. Framing a mortgage market in terms of a duopoly where a newcomer enters with a populistic entry strategy offering a lower mortgage rate and a mortgage product with a different loan-to-value (LTV) ratio, a novel mortgage market case comes about. The populistic entry strategy produces an augmented reaction curve, crucial for the mortgage market rates.

The “Montreal protocol on substances that deplete the ozone layer” obliges industrial countries to reimburse developing countries ‐ through new and additional resources ‐ all agreed incremental costs incurred by them in their efforts to save the ozone layer. To this end, a multilateral fund was established in 1990. The fund’s decision‐making procedures grant developing countries the same voting powers as industrial countries ‐ an almost revolutionary precedent in North‐South relations. In this article, the work of the Multilateral Ozone Fund is being analysed, with special emphasis on the development and implementation of the notion of “all agreed incremental costs” between industrial and developing countries. Since comparable institutional settings have been stipulated in the more recent treaties on climate change and biological diversity, in the concluding section five “lessons” are drawn from ozone politics for other international environmental agreements, in particular the emerging climate regime.

Increased economic activity in sub-Saharan Africa (SSA) has given rise to increased demand for port development. Given the often scarce availability of national public funding, port institutional reform programmes have been implemented to pave the way for the inclusion of external port investors. Notwithstanding this fact, some sub-Saharan African Governments remain institutionally locked into the notion that state-owned enterprises remain an appropriate vehicle for port terminal operations. This, despite the fact that terminal operational concessions globally and within the continent of Africa are increasingly being managed by global terminal operators. Given this context, this study aims to evaluate different port valuation and funding strategies. Two research questions form the core of this research: what is the financial value of a concession? What is the most cost advantageous funding strategy? The methodology is applied to the development of a two-berth container terminal in SSA.

After reviewing a range of financial valuation and funding techniques, the study presents valuation and funding model applicability-fit tests. Thereafter, a suitable valuation technique is selected and applied to the case study providing a concession valuation. Different funding strategies are applied to the valuation model to determine the cost implications of each funding instrument given the local context and institutional constraints applicable to SSA. Finally, the study discusses the significance of the results to potential SSA port investors by highlighting the impact of each funding approach on key financial metrics.

The study presents a range of financial investment appraisal results for the case study concession in consideration of four specific funding strategies. The highest concession valuation could be attributed to a higher debt ratio as a principal funding strategy. In addition, this funding approach (100% debt) realised the shortest payback period and the highest internal rate of return values. The authors, however, maintain that the optimal funding strategy for a concession depends ultimately on the financial goals of the investor.

This research makes a contribution to the existing literature on port finance and development by presenting a structured approach to the evaluation of the valuation and funding techniques, which can be used in terminal development subject to the specific local context and institutional constraints (in this case applicable to SSA). The study provides practical insight into the potential cost of the considered terminal concession for private or public sector participants and a view of the most cost advantageous funding strategy available for interested investors.

In the United States, a child with a disability is vested with the statutory right to a free appropriate public education. Public school districts fulfill this right with an individualized education program designed to address the educational needs of the child. As with all governmental programs designed to extend positive benefits, statutory rights to a free appropriate public education come with attendant and commensurate costs that must be paid by the taxpayer. Rights have costs, and while the rights may be absolute, the remedy to a rights deficiency is subject to political processes. To borrow from Ronald Dworkin’s famous aphorism, costs and politics ultimately trump the right to a free appropriate public education.