External Assets Research Articles

Network valuation in financial systems

AbstractWe introduce a general model for the balance‐sheet consistent valuation of interbank claims within an interconnected financial system. Our model represents an extension of clearing models of interdependent liabilities to account for the presence of uncertainty on banks' external assets. At the same time, it also provides a natural extension of classic structural credit risk models to the case of an interconnected system. We characterize the existence and uniqueness of a valuation that maximizes individual and total equity values for all banks. We apply our model to the assessment of systemic risk and in particular for the case of stress testing. Further, we provide a fixed‐point algorithm to carry out the network valuation and the conditions for its convergence.

Liban : illusion financière, illusion monétaire

Afin de comprendre les raisons de la tension économique et financière au Liban et d'en explorer les issues possibles, il est nécessaire d'envisager les fonctions de l'intermédiation financière au Liban à la fois sous l'angle théorique, car elles présentent un cas extrême d'imbrication des risques bancaires, fiscaux et monétaires, et sous l'angle politique, car l'alternative entre leur reconfiguration et leur préservation s'impose comme un enjeu décisif. Au Liban, le système financier est intrinsèquement imbriqué au système politique, dont il est l'un des instruments essentiels. Sa « résilience » est le résultat d'une action politique longue qui tire avantage du défaut d'immunité de la société. Aujourd'hui, le Liban fait face à une crise majeure de la balance des paiements et vouloir occulter les pertes dans l'attente d'un miracle improbable ne fera que les aggraver et épuisera les derniers avoirs extérieurs. Il est donc nécessaire de procéder à une allocation des pertes et des risques qui soit à la fois socialement juste, et par suite politiquement justifiable, et économiquement orientée vers la restructuration de l'économie pour qu'elle ne soit plus structurellement dépendante des flux externes de capitaux. Classification JEL : F41, G21, O16, O53.

Global imbalances from a stock perspective: The asymmetry between creditors and debtors

After the global financial crisis, a reduction in global current account (flow) imbalances was observed. Still, global disequilibria as measured in terms of countries’ net foreign assets (stock imbalances) kept increasing. This paper explores the link between stock and flow imbalances. Our results show that stock imbalances are self-correcting or stabilizing in debtor countries but self-feeding or destabilizing in creditor countries. In debtor economies, the negative net foreign asset position improves the current account balance, helping to limit the accumulation of net external debt. In creditor countries, the positive net foreign asset position also improves the current account, leading to additionally increasing net external assets. The decomposition of the current account reveals that the income balance widens stock imbalances in both cases. The asymmetry between creditors and debtors is explained by the differential behavior of the trade balance, which fails to adjust in the case of creditors.

학업스트레스와 회복탄력성의 관계에서 외적발달자산의 매개효과: 중·고등학생의 비교를 중심으로

학업스트레스와 회복탄력성의 관계에서 외적발달자산의 매개효과: 중·고등학생의 비교를 중심으로

Recursos personales y contextuales predictors de afectos positivo y negativo en adolescentes

Este estudio tuvo como objetivo explorar la relación entre la experiencia de recursos del desarrollo —Developmental Assets®— personales y contextuales y los afectos positivo y negativo. Fue evaluada una muestra de conveniencia constituida por 503 estudiantes, entre los años escolares 9° y 12°, con edades comprendidas entre los 13 y los 19 años (M = 15,92; dp = 1,17), mayoritariamente del género femenino (63 %). Los resultados indican que los adolescentes que experimentan un mayor número de recursos tienden a revelar una experiencia superior de afecto positivo e inferior de afecto negativo. Los datos sugieren el impacto de los subconjuntos de recursos del desarrollo en la predicción de los afectos positivo y negativo (explicando el 30 y el 31 % de varianza en los resultados, respectivamente). Ambos recursos, internos y externos, contribuyeron con la varianza de los resultados, y constituyeron los recursos internos predictores más fuertes. Se sugiere la utilidad del modelo de recursos de desarrollo para comprender la experiencia de afecto positivo y afecto negativo en la adolescencia, con el propósito de promover un desarrollo exitoso.

Hope, Self-Efficacy, and Crushed Dreams: Exploring How Adolescent Girls’ Future Aspirations Relate to Marriage and Childbearing in Rural Mozambique

In rural Mozambique, girls commonly marry and have children before age 18. We use a Positive Youth Development lens to examine how constructs of confidence and competence were related to adolescent girls’ ability to and progress toward achieving their future aspirations. As part of an intervention evaluation, we used a longitudinal qualitative design, conducting in-depth interviews with 47 adolescent girls aged 13 to 19 at the end of the intervention and 1 year later. We explored adolescent girls’ future aspirations and examined their progress toward achieving their goals and three distinct groups emerged: (a) hopeful with self-efficacy, on track to reach goals; (b) hopeful with mixed levels of self-efficacy, not on track to reach goals; and (c) lacking hope and self-efficacy, not taking any actions to reach goals. Having hope and self-efficacy and behavioral competence enabled progress toward achieving goals, but poverty, early marriage, and childbearing were major obstacles. We conclude that fostering individual-level protective factors (e.g., hope and self-efficacy) is useful in interventions targeted toward young women to prevent pregnancy and child marriage, but that external assets (e.g., community, structural interventions) should be promoted to facilitate girls staying in school, provide sustainable economic opportunities, and improve adolescent contraceptive access and use.

External Imbalances, Gross Capital Flows, and Sovereign Debt Crises

Abstract The experience of the European monetary union has been characterized by current account imbalances, widening gross external positions, and a severe sovereign debt crisis. I argue that institutional features of the European Economic and Monetary Union have contributed to all three. I show in a model that subsidies on holdings of assets issued within the union contribute to current account imbalances, to gross capital flows, and to the severity of the crisis. In a quantitative model with heterogeneous countries, I show that the subsidies account for a substantial fraction of the widening of gross external positions in the euro area by inducing countries with high income and external assets to engage in intermediation of gross capital flows.

Revisiting the Monetary Presentation of the Euro Area Balance of Payments

We explain how the external counterpart of the euro area M3 can be analysed by using the euro area balance of payments (b.o.p.). This is possible because the net external assets of the monetary financial institutions (MFIs) are present in two statistical frameworks that follow similar conventions: the balance sheet items (BSI) of MFIs and the balance of payments statistics. The first step to including external flows in the monetary analysis is to understand the nature of the flows between resident money holders and the rest of the world. This is possible thanks to the monetary presentation of the b.o.p, which provides information on the nature of external transactions and therefore guidance on the persistence of the monetary signal stemming from external flows.Over the past five years, the increase in the euro area’s external competitiveness has given rise to a sustained current account surplus that has consistently supported monetary inflows into the euro area. At the same time, portfolio transactions, which closely reflect financial and monetary policy conditions, have fluctuated significantly, increasing monetary inflows in the period from mid-2012 to mid-2014 and turning them into net outflows during the asset purchase programme (APP) period.

Can the world’s largest pension fund, Japan’s GPIF, be a responsible steward? Stewardship responsibility as asset owner

The number of institutional investors has seen a marked increase in the past few decades. For the purpose of the long-term economic success of portfolio companies, it is crucial to encourage investee companies to establish better corporate governance structure within them. The U.K. and Japan introduced the Stewardship Code, and the Government Pension Investment Fund (GPIF) of Japan defines itself to fulfill its roles and responsibilities as an asset owner in line with Japan’s Stewardship Code. However, passive funds that have occupied a large share of the market have no financial incentive to incur the costs for engagement with investee companies. The purpose of this article is to review the two Stewardship Codes, the stewardship structure, policies of the GPIF that has accepted Japan’s Stewardship Code, and to explore how the GPIF fulfills its stewardship responsibility, based on the Japan’s Code, requires its external asset managers to comply with its stewardship principles and continuously monitors the stewardship activities of asset managers. The findings are that continually improving stewardship and engagement by utilizing the PDCA cycle, the GPIF can be a responsible steward in the Japanese market.

Appreciative Advising Inventory

The major purpose of this study was to illustrate how the Appreciative Advising Inventory (AAI) can be used in student success programs to identify students' assets and strengths in order to promote their successful transition to college. The results of the study indicated that college students who are placed on academic probation shared internal assets related to their commitment to learning and positive values. The student success programming described in this study appeared to facilitate students' development of external assets, especially regarding boundaries and expectations, and constructive use of time. Students' positive values, positive identity, and support/connectedness were noted as indicators for their academic success in college. Implications of the study for college administrators, staff, instructors and students were also discussed.

Promoting Youth Competence Through Balanced and Restorative Justice: A Community-Based PYD Approach

As responses to first-time, nonviolent juvenile offenders move towards community-based restorative justice, approaches such as the Balanced and Restorative Justice (BARJ) Model are prominent. The BARJ Model engages the youth offender, offense victim(s), and community in which the offense occurred with three associated goals: accountability, community safety, and competency development. However, while the goals of accountability and community safety are often prioritized, many community-based restorative justice programs neglect the goal of competency development, which is ultimately a disservice not only to the youth offender, but to the community. To interrupt the cyclical nature of juvenile offending and support the long-term rehabilitation of the youth offender, the integration of the BARJ model and a positive youth development (PYD) approach within the context of community-based restorative justice is proposed. PYD is grounded in the belief that all youth have the potential for healthy development, viewing them as assets and resources in community settings. To enhance long-term development, PYD objectives simultaneously promote protective factors, develop internal and external assets, and mitigate risk factors. The integration of a PYD approach within the BARJ model addresses the need to enhance youth competency development through PYD indicators inherent to many community-based programs. This article explores the conceptual compatibility of integration of the BARJ model and a PYD approach with the goal of promoting competency development among youth offenders in a restorative justice context.

Collateral rehypothecation, safe asset scarcity, and unconventional monetary policy

We build a mark-to-market model where commercial banks can enlarge their balance sheets, repledging the available collateral several times to exchange liquidity through the interbank market. In bad times, the fall of risky asset price disrupts the length of the repledging chain due to the increase of the haircut and the decrease of external assets' value. In such a scenario, the central bank can intervene implementing unconventional monetary policies by purchasing a fraction of the banking system's external assets, both safe treasury bonds, and risky asset-backed securities, to inject liquidity. Our results show that a quantitative easing policy that purchases only safe assets is highly ineffective in restoring the intermediation activity to the pre-crisis level due to its inability to sustain the risky asset price and the repledging chain of collateral. Instead, focusing on risky assets only, the monetary authority can sustain risky asset prices, avoiding the freezing of the money market.

고등학생의 학업성취도에 영향을 미치는 외적발달자산 내적발달자산 및 학업스트레스의 관계

고등학생의 학업성취도에 영향을 미치는 외적발달자산 내적발달자산 및 학업스트레스의 관계

Dynamics of digital entrepreneurship and the innovation ecosystem

PurposeThe purpose of this paper is to investigate the dynamics of digital entrepreneurship and the role of innovation ecosystem in its shaping by applying a multilevel perspective on the phenomenon.Design/methodology/approachAn exploratory in-depth analysis of an IT company in Brazil is conducted using a quasi-mixed method design and three analytical techniques: pattern-matching, data exposure and social network analysis. The study is based on qualitative data, complemented by quantitative data. The case company is investigated within its time (historical development) and spatial (entire ecosystem) dimensions, providing an integrative approach to analysis.FindingsThe results revealed significant differences in a set of supporting innovation ecosystem’s actors and relationships throughout the development of the company from lower to higher levels of digitalization. The findings are discussed within a framework that links ecosystem’s actors at different layers with different levels of business digitalization.Research limitations/implicationsThis research brings implications to SMEs in high-tech industries that are aiming to transform their business toward greater digitalization, and stresses the importance of strategic partners in innovation ecosystem in this process.Originality/valueThe novelty of this research is related to how external actors contribute to a company to adapt and create value, and how companies may exploit opportunities by configuring internal resources and external assets from strategic relationships. The study considers digital entrepreneurship in dynamics, distinguishes between different levels of digitalization and prescribes them different enablers and sets of relationships.

Network model of credit risk contagion in the interbank market by considering bank runs and the fire sale of external assets

We construct a network model of credit risk contagion in the interbank lending market based on time series. Such network model is based on imperfect information considering that the initial credit default of the debt bank will cause the creditor bank to run on its debt bank and the debt bank’s fire sale of external assets held to repay the debt or control the leverage ratio that reduce asset prices and create spillovers. By the theoretical deduction and simulation method, we study how the contagion effects of credit risk accumulate and spread in the interbank market network. In addition, we study the evolution characteristics of credit risk contagion caused by the initial default of debt banks in the interbank market. The following are the results of the study. First, when banks sell external assets at a fixed price, the fire sale of external assets can effectively reduce the probability of credit default. However, when the price of external assets decrease with the increase of fire sales volume, banks’ fire sale of external assets will lead to more serious contagion spillover consequences than that of none of the banks’ selling strategies. Second, the panic of bank decision makers in the banking system has a nonlinear evolution characteristic of increasing and decreasing credit risk contagion. Third, the higher the proportion of banks’ liquid assets, the stronger their ability to resist credit risks. Last, the higher the proportion of banks’ interbank assets, the stronger the contagion effect of credit risk on the entire banking system.

Barriers and assets to external funding for African American faculty

External funding is required for promotion and tenure in many disciplines, especially at research intensive universities. The purpose of this study was to identify barriers and assets to external funding for African American faculty at a research intensive university. A phenomenological approach was used to capture the voice of 16 African American faculty through focus groups and interviews. Data were interpreted through the lens of Critical Race Theory. The three primary themes were: (1) barriers, (2) influence of race, and (3) assets. Barriers included lack of mentors and collaborators; teaching load and lack of protective time; scarcity of funding; and lack of administrative support and infrastructure for getting grants out. Faculty reported several assets for securing funding. These included both personal (e.g. good training, innovation) and external (e.g. collaborations with community members) assets. Recommendations for addressing barriers are provided.

Specifics of Interrelations between the Russian and European Financial Markets

The subject of the researchis the state of interrelationship between the Russian and European financial markets in the context of the economic and financial sanctions imposed on Russia by the European Union.The relevanceof the research stems from the strategic goal set by the President of the Russian Federation — to ensure the “breakthrough” of the Russian economy in order to enter the top five world’s developed economies by 2024–2025.The purpose of the paperwas to develop a roadmap for the implementation of the mobilization model of cross-border flows of the Russian capital in the context of modern transformations of the global monetary and financial system. Based on the revealed and analyzed mainstream trends in the interaction of the Russian and European financial markets, a mobilization model of cross-border flows of the Russian capital under the modern conditions has been developed. The asymmetry in mutual exchanges between the Russian and European financial markets is revealed and the risks of all identified forms of asymmetry are defined. The reference structure of foreign assets of the Russian financial market is determined, priority directions for the correction of the structure of external assets and liabilities have been established, and the institutional structure of the monetary and financial regulation of the Russian financial market are specified.It is concludedthat based on the roadmap for the model of cross-border flows of the Russian capital under conditions of modern transformations of the global monetary and financial system developed for the period 2019–2025, the Russian financial market is expected to be fairly stable over the next three years, which should be taken into account by the Bank of Russia in making decisions on the monetary policy and accumulation of international currency reserves.

The 2014–15 Financial Crisis in Russia and the Foundations of Weak Monetary Power Autonomy in the International Political Economy

ABSTRACTThis article contributes to international political economy debates about the monetary power autonomy (MPA) of emerging market and developing countries (EMDs). The 2014–15 Russian financial crisis is used as a case study to explore why an accumulation of large international reserves does not provide protection against currency crises and macroeconomic adjustments in EMDs. The analysis centres on the interplay between two dimensions of MPA: the Power to Delay and the Power to Deflect adjustment costs. Two structural factors condition Russia’s low MPA. First, the country’s subordinated integration in global financial markets increases its financial vulnerability. The composition of external assets and liabilities, combined with cross-border capital flows, restrict the use of international reserves to delay currency crises. Second, the choice of a particular macroeconomic policy regime embraced the financialisation of the – mainly state-owned – Russian banking sector, thus making it difficult to transform liquidity inflows into credits for enterprises. Russia’s main comparative advantage, hydrocarbon export revenues, is not exploited. The type of economy created due to the post-Communist transition means that provided ‘excessive’ liquidity remains in the financial system and is channelled into currency arbitrage. This factor increases exchange rate vulnerability and undermines Russia’s MPA.

Assessing the Effect of External Assets and Debts on FX Market Liquidity in Korea

Assessing the Effect of External Assets and Debts on FX Market Liquidity in Korea

From surviving to thriving: characterizing positive youth development among youth in Ethiopia

ABSTRACT Studies that characterize youth from a strengths-based perspective are lacking in Africa and specifically in Ethiopia. This study examined the positive development of youth in Ethiopia focusing on their assets profile and corresponding thriving outcomes. Six hundred and thirty-six students (349 girls, 287 boys; Mage = 17.00 years, SD = 1.53; with age range of 13–21 years) drawn from secondary and college preparatory schools in Addis Ababa completed measures on developmental assets and thriving outcomes. Results indicated that students had vulnerable assets profile, mainly lacking external and contextual assets with gender and living arrangements accounting for differences in the report of the assets. Hierarchical regression analyses showed that external and internal assets significantly contributed to youth thriving. Though the youth were living in asset-depleted contexts, they demonstrated adequate possession of internal assets implying that the youth were going beyond survival and demonstrating signs of thriving.