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Article
Publication date: 20 April 2010

Carolyn Sissoko

The purpose of this paper is to analyze the consequences of the “safe harbor” provisions of the US Bankruptcy Code that were enacted from 1984 through 2005 and that protect…

Abstract

Purpose

The purpose of this paper is to analyze the consequences of the “safe harbor” provisions of the US Bankruptcy Code that were enacted from 1984 through 2005 and that protect certain financial contracts from standard bankruptcy procedures.

Design/methodology/approach

Qualitative methods are used to evaluate whether these provisions of the Bankruptcy Code were successful in their stated goal of reducing systemic risk in the financial system. A model of systemic risk is presented verbally in order to frame the discussion.

Findings

Recent evidence indicates that the “safe harbor” provisions, in fact, destabilized the financial system by encouraging collateralized interbank lending, discouraging careful analysis of the credit risk of counterparties and increasing the risk that creditors will run on a financial firm.

Practical implications

This paper indicates that the rewriting of the Bankruptcy Code to favor financial firms has had a profoundly destabilizing effect on the financial system. To put the financial system on more secure foundations, the author proposes that large complex financial institutions be prohibited from posting collateral on over the counter derivative transactions and that the repo‐related bankruptcy amendments passed in 2005 be repealed.

Originality/value

This paper proposes an original framework for understanding systemic risk which drives the results in the paper.

Details

Journal of Financial Economic Policy, vol. 2 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Article
Publication date: 1 April 2002

Katherine Tyler and Edmund Stanley

In 1997, in this journal, Elizabeth Sheedy published a paper investigating exchange relationships in derivative markets. This paper was significant for two reasons. It was the…

1731

Abstract

In 1997, in this journal, Elizabeth Sheedy published a paper investigating exchange relationships in derivative markets. This paper was significant for two reasons. It was the first article to consider the marketing of these important financial instruments. Second, her article set out a forceful argument that relationships in this context were breaking down, and that the advantages associated with a relationship model of exchange had not appeared, and indeed had to some extent facilitated the series of well publicised derivative disasters. In this paper, the authors respond to Sheedy’s call for further research through an empirical examination of the over‐the‐counter equity derivatives market in the USA and Britain, arguing that while relationships in this market do, to a limited degree, exhibit characteristics atypical of wider financial services contexts, the relationship paradigm continues to be relevant, and indeed inherent, to over‐the‐counter derivative exchange.

Details

International Journal of Bank Marketing, vol. 20 no. 2
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 28 June 2011

Erin Cavusgil, Z. Seyda Deligonul and Roger Calantone

This paper aims to explore market dynamics and strategic issues that contribute to a late entrant's success in achieving market leadership in the prescription (Rx) and…

1326

Abstract

Purpose

This paper aims to explore market dynamics and strategic issues that contribute to a late entrant's success in achieving market leadership in the prescription (Rx) and over‐the‐counter (OTC) markets. In the Rx market, consumers must receive physicians' approval before purchasing the product. In the OTC market, consumers make the final drug choice.

Design/methodology/approach

Data on sales (both Rx and OTC) and direct‐to‐consumer advertising expenditures for nine gastrointestinal drug products were obtained covering a 17‐year period. Ordinary least squares regression was employed.

Findings

The findings show that late‐market entrants, despite existing challenges, can become market leaders. This applies to both the Rx and OTC markets, via varying mechanisms.

Originality/value

This study is unique in demonstrating the differential mechanism in achieving market success for late entrants in the Rx and OTC markets.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 5 no. 2
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 1 May 2009

Yu‐Shan Chen and Bi‐Yu Chen

The purpose of this paper is to use data envelopment analysis (DEA) to evaluate the efficiency of the wafer fabrication industry in Taiwan.

1195

Abstract

Purpose

The purpose of this paper is to use data envelopment analysis (DEA) to evaluate the efficiency of the wafer fabrication industry in Taiwan.

Design/methodology/approach

The input variables are total assets, operation costs, and operation expenditures, and the output variable is net sales. This study uses the Pearson correlation to indicate positively correlation between input and output variables, applies DEA to analyze the efficiency scores, and utilizes Mann‐Whitney U‐test to compare the efficiency score of stock exchange market group (SEM group) with that of over‐the‐counter market group (OTC group). Moreover, this paper explores the efficiency performance over different periods by use of the Malmquist productive Index (MPI).

Findings

This study indicates that Taiwan Semiconductor Manufacturing Corporation (TSMC) has the most relative efficiency in the wafer fabrication industry of Taiwan. In addition, this study finds out the average constant returns to scale (CRS) efficiency of the Taiwanese wafer fabrication industry from 1999 to 2003 is 84.98 per cent, and the average CRS efficiencies of all nine wafer fabrication companies are over 70 per cent. This study finds out that net sales and scale efficiency of SEM group are higher than those of OTC group. Moreover, this study shows that the main inefficient causes of four companies of SEM group except TSMC and Nanya are from the inefficiency of variable returns to scale efficiency, while the main inefficient causes of all companies of OTC group are from the inefficiency of scale efficiency. Finally, according the results of the MPI in this study, the wafer fabrication industry should introduce the new technology to improve its technology change effect.

Originality/value

This study provides a valuable reference for wafer fabrication companies not only in reviewing their efficiency, but also in enhancing their operational performance.

Details

Journal of Manufacturing Technology Management, vol. 20 no. 4
Type: Research Article
ISSN: 1741-038X

Keywords

Article
Publication date: 18 April 2016

Volker Nienhaus and Abdullah Karatas

This paper aims to explore whether the market perceives liquid international sovereign sukūk as distinct from comparable bonds and as an asset class of their own that could shield…

1295

Abstract

Purpose

This paper aims to explore whether the market perceives liquid international sovereign sukūk as distinct from comparable bonds and as an asset class of their own that could shield investors against turbulences in the bond markets.

Design/methodology/approach

If sukūk and bonds belong to the same asset class, then basically the same supply and demand factors determine inverstors’ activities in both markets. This should lead to matching patterns of yield curves for sukūk and bonds comparable in terms of issuers, maturity, currency, size, liquidity and rating. Only a rough analysis of holding and trading patterns of conventional and Islamic sukūk investors was possible, as most sukūk market transactions are “over-the-counter” and not registered in the Bloomberg database. However, price information could be used for an analysis of yield curves of liquid sovereign sukūk and comparable bonds.

Findings

Conventional investors participate in the sukūk market, but their influence on prices is rather small, as they act primarily as intermediaries (i.e. market makers) as opposed to price setters. The yield curves of the selected bonds and sukūk widely match. This suggests that bonds and liquid sovereign sukūk belong to the same asset class. Furthermore, as turbulences in conventional markets are also reflected in the sukūk markets, Islamic investors themselves play a role in the transmission.

Research limitations/implications

The study of holding patterns and of the market perception of sovereign sukūk and bonds required a focus on four countries with deep and (potentially) liquid sukūk markets (Malaysia, Turkey, Indonesia and Hong Kong) and US$-denominated international securities. Some suitable combinations of sukūk and bonds are relatively young issuances with time series data for two to three years only. Data on holding patterns are sketchy and require interpretations based on market knowledge.

Practical implications

Parallel yield curves indicate that conventional investors do not perceive international sovereign sukūk as an asset class of their own distinct from conventional government bonds. This market perception of liquid international sovereign sukūk could have an impact on other types of sukūk (e.g. on international corporate sukūk) if sovereign sukūk are taken as pricing and performance benchmarks.

Originality/value

The paper sheds light on institutional investor behavior in the bond and sukūk markets and outlines data availability issues that constrain quantitative analyses in over-the-counter markets.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 9 no. 1
Type: Research Article
ISSN: 1753-8394

Keywords

Book part
Publication date: 23 December 2005

Jing Chi and Martin Young

While China is currently moving toward the full development of its own financial derivatives markets, to date, China's experience with these has been a negative one. This paper…

Abstract

While China is currently moving toward the full development of its own financial derivatives markets, to date, China's experience with these has been a negative one. This paper examines the importance to China of developing a fully integrated financial derivatives market from both the economic and financial market perspectives. It examines the best way forward for derivative trading, both market based and over-the-counter, and the types of products best suited to both, given the current state of the Chinese financial markets. Consideration is given to market structure, regulation, trading and settlement systems and international cooperation.

Details

Asia Pacific Financial Markets in Comparative Perspective: Issues and Implications for the 21st Century
Type: Book
ISBN: 978-0-76231-258-0

Article
Publication date: 14 September 2015

Haitham Nobanee and Jaya Abraham

– The purpose of this paper is to investigate the relationship between a firm’s net trade cycle, its size and liquidity.

2238

Abstract

Purpose

The purpose of this paper is to investigate the relationship between a firm’s net trade cycle, its size and liquidity.

Design/methodology/approach

The relation between the firm’s net trade cycle and its liquidity is examined using Generalized Method of Moment Dynamic Panel-Data System Estimation with Robust Standard Errors for a sample of 5,802 US non-financial firms listed in the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and Over the Counter Market for the period 1990-2004 (87,030 firm-year observations). The analysis is applied at the levels of the full sample and divisions of the sample by size.

Findings

The results show negative and significant relationship between net trade cycle, as a comprehensive measure of efficiency in working capital management, and liquidity for small firms.

Originality/value

Most of the existing literature focusses on the large firm’s experience of working capital management. Small firms generally face liquidity problems and have limited access to external capital, and studies on their efficiency in working capital management are scant. Thus the present study is useful in understanding the relation between the firm’s net trade cycle and liquidity of small firms.

Details

Journal of Economic Studies, vol. 42 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 4 May 2012

Stan Cerulus

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

Abstract

Purpose

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

Design/methodology/approach

A meticulous legal research is carried out. First, the pre‐crisis regulatory regime for credit default swap (CDS) is reviewed, from a securities law angle as well as from a comparative Euro‐American perspective. Next, the regulatory processes leading to the adoption of the central clearing regulations are discussed. Thereafter, a material comparative analysis is made of the provisions related to central clearing in the EU and US regulatory initiatives. Finally, the paper is concluded with an evaluation of both legislations in the light of all previous analyses.

Findings

The research first shows that central clearing regulations rely on a series of presumptions, both concerning the gravity of counterparty risk threats and the necessity of central clearing. Additionally, the EU and US clearing regulations are similar with regard to the broad innovations they introduce, i.e. the mandatory central clearing of a variety of over‐the‐counter derivatives and counterparty risk management requirements for central clearing institutions and for non‐cleared swaps. However, the specific content of the provisions often differs. Furthermore, both legislations are limited to enouncing broad principles. This is also the case for the crucial provisions related to counterparty risk management. Therefore, these provisions in se do not guarantee the proper regulation of counterparty risk management practices. Consequently, much is to be expected from the implementing measures adopted by regulatory institutions.

Originality/value

The paper provides an overview of those provisions in the European and US regulations that specifically concern central clearing for CDS. It is one of the first papers which does this in a very well‐structured and clearly written manner. Also it is one of the first to provide a clear comparison between the provisions in the EU and the US regulations.

Details

Journal of Financial Regulation and Compliance, vol. 20 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 9 March 2012

Shwu‐Ing Wu and Jui‐Ho Chen

The purpose of this paper is to determine whether passing ISO accreditation can effectively enhance business performance, and further to explore the major contributions of ISO…

11902

Abstract

Purpose

The purpose of this paper is to determine whether passing ISO accreditation can effectively enhance business performance, and further to explore the major contributions of ISO accreditation for companies. Although there are some current debates on the effectiveness of ISO9000, for many companies having ISO9000 accreditation is mainly for marketing purposes. However, no company really knows the detailed performance effects of ISO accreditation. In this study, both the Balanced Scorecard (BSC) and Activity Based Costing (ABC) methods are used to compare the direction and strength of each performance indicator for companies that have passed, or not passed, ISO accreditation.

Design/methodology/approach

Companies in the manufacturing industry and service industry, with stocks listed in Taiwan's regular stock market and over‐the‐counter stock market, are selected as the research targets. A total of 212 valid questionnaires from the manufacturing industry and 120 from service industries are collected for further analysis of business performance using the BSC method. In addition, ABC measures are used to compare the performance difference through objective financial data.

Findings

Through qualitative and quantitative methods, this study develops key measurement indicators along four performance constructs based on the Balanced Scorecard. These include 38 indicators for the manufacturing industry and 32 indicators for the service industry. Through evaluation and comparison, the study shows that the pass of ISO accreditation by an enterprise can enhance its business performance and financial benefits. Higher effects are especially apparent in the manufacturing industry.

Originality/value

This study uses the concept of the BSC to construct performance measurement indicators and to evaluate the business performance of enterprises. In addition, the differences in business performance attributed to the pass or fail of ISO accreditation have been compared through BSC and ABC methods. From the performance analysis, it can clearly analyze the difference displayed by enterprises that have passed or not passed ISO accreditation. These results can be referenced by different industries when performing performance evaluation and strategy making.

Details

International Journal of Quality & Reliability Management, vol. 29 no. 3
Type: Research Article
ISSN: 0265-671X

Keywords

Article
Publication date: 1 October 2004

P. Kevin Carwile and Valerie Hollis

Focuses on the infiltration of the US stock market by organised crime in the shape of La Cosa Nostra (LCN). Defines what organised crime is and goes on to the history of Cosa…

Abstract

Focuses on the infiltration of the US stock market by organised crime in the shape of La Cosa Nostra (LCN). Defines what organised crime is and goes on to the history of Cosa Nostra, its reasons for tackling Wall Street and how it does this, analysing two specific cases of infiltration: Mob Stocks and Operation Uptick. Describes the various sectors of the securities market involved: the over‐the‐counter market, penny stocks, and chop stocks. Shows how LCN has invaded securities schemes, including trading scams and brokerage scams; its techniques include protection rackets, hidden ownership, and “pump and dump” schemes, but violence remains as the last resort. Assesses the scope of the corruption and whether organised crime is really a threat to the stock market.

Details

Journal of Financial Crime, vol. 11 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

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