Financial Disruption Research Articles

SOCIO-ECONOMIC APPROACH AS A PROMISING INTERVENTION TO REDUCE LEPROSY-RELATED STIGMA

The context of the journal is about people with leprosy-related stigma have low self-esteem not only because their physical impacts such as deformity and the color of their skin, but also their psychological aspect like negative feeling and emotion about their body. In social aspect, they may feel rejection, discrimination, loneliness, and fear to interact with others. Further more, they may loose their job and make financial disruption. In this journal intervention research, the researchers have a goal to make a better life for people with leprosy and dissolve the stigma.

The Souk al-Manakh Crash

From 1978 to 1981, Kuwait’s two stock markets, one the conservatively regulated “official” market and the other the unregulated Souk al-Manakh, exploded in size, growing to the point where the amount of capital actively traded exceeded that of every other country in the world except the United States and Japan. A year later, the system collapsed in an instant, causing huge real losses to the economy and financial disruption lasting nearly a decade. This Commentary examines the emergence of the Souk, the simple financial innovation that evolved to solve its rapidly increasing need for liquidity and credit, and the herculean efforts to solve the tangled problems resulting from the collapse. Two lessons of Kuwait’s crisis are that it is difficult to separate the banking and unregulated financial sectors and that regulators need detailed data on the transactions being conducted at all financial institutions to give them the understanding of the entire network they must have to maintain financial stability. If Kuwaiti officials had had transaction-by-transaction data on the trades being made in both the regulated and unregulated stock markets, then the Kuwaiti crisis and its aftermath might not have been so severe.

THE INFLUENCE OF RECESSION HARDSHIPS ON THE PSYCHOSOCIAL WELL-BEING OF SANDWICHED AND FILIAL CAREGIVERS

The 2007-2009 U.S. Great Recession impacted the lives of many families, and it has been documented that multigenerational households in the U.S. increased by 10% during this period. Given the vulnerability of providing care to multiple generations, there is a need to examine the influence of recession hardships on sandwiched caregiving and psychosocial well-being in the context of more normative caregiving (e.g., filial caregiving). Informed by the life course perspective, this study assessed the impacts of types of family caregiving (sandwiched and filial caregivers) on psychosocial well-being (e.g., affect, environmental mastery, and social actualization) and the moderating role of recession hardships (e.g., job loss, foreclosure). Sandwiched and filial caregivers (N=127; Mage=53; SD=11.02) from the Refresher Cohort of the Midlife in the United States (MIDUS) Survey provide information on demographics, recession hardships, family caregiving, and well-being. Results from regression analyses showed that sandwiched caregivers exhibited lower levels of positive affect and environmental mastery than filial caregivers. Moderation analyses showed that filial caregivers with lower recession hardships exhibited lower positive affect and social actualization when compared to sandwiched caregivers with lower recession hardships. Filial caregivers with lower recession hardships exhibited lower positive affect and social actualization than sandwiched and filial caregivers with greater recession hardships. These results illustrate the complexity of family caregiving in that providing care to multiple generations does not necessarily translate to lower levels of well-being. Study findings have the potential to inform programs that may promote sandwiched caregivers’ well-being and support filial caregivers navigating financial disruptions.

Speculation and Counter-Speculation

This paper explores the ways in which financial speculation and disruption have become common traits defining our artistic and political imagination. In this discussion a variety of notions emerge – namely, the move from value to price, from labor to debt, from revolution to disruption, and from avant garde to speculation. Finance is speculation on debt. Speculation is commonly used in recent years in philosophy, literature, politics, the arts and the sciences. As varied as the usages of the term may be, the current emergence of speculation in these different fields stems from the world of finance capital and its premise of managing risk. Speculation proves to be a form of pragmatism that generates more and more extreme models within the current system of control and accumulation by dispossession. Whatever the extreme scenarios it generates might be, they always depend on a stable variant – the continuation of finance capital. This paper wishes to offer in addition, the notion of counter-speculation by using the work of contemporary thinkers and artists. Counter-speculation invites potentials for actualization. While exploring new forms for being in uncertainties against financialization, counter-speculation assigns scenarios and narration that actualize onto the present its own potentials. By that it opens a new horizon for our political imagination beyond finance.

Testimony of Erik F. Gerding Before the U.S. House of Representatives Subcommittee on Consumer Protection and Financial Institutions on 'Emerging Threats to Stability: Considering the Systemic Risk of Leveraged Lending'

Risk is building in the leveraged loan and collateralized loan obligation (“CLO”) markets. These two markets are connected: leveraged loans are being repackaged into CLOs just as mortgages and mortgage-backed securities were used to create collateralized debt obligations (“CDOs”), the financial products at the heart of the financial crisis 11 years ago. There are important differences but also troubling parallels between the leveraged loan/CLO markets and the earlier mortgage/CDO markets. One alarming similarity is the decline in leveraged loan underwriting standards: the market is now dominated by “covenant-lite loans.” Covenant-lite loans permit greater leverage by borrowers and remove an early warning system for lenders. Purchases of CLOs by banks and other regulated financial institutions made in order to game crucial regulatory capital requirements (“regulatory capital arbitrage”) remain a significant concern . Like mortgages and CDOs, leveraged loans and CLOs form a pipeline or system. Disruptions at either end of the system can cause financial havoc on the other end and then ricochet back. This is akin to a coiled spring or “crisis accordion.” Losses or disruptions in the leveraged loan/CLO markets, even if they do not approach the levels of mortgages/CDOs in the global financial crisis could still be significant, e.g., amplifying a recession. We should be humble about our ability to predict the upper bound of financial market disruptions or crises. Some tranches of CLO securities appear not to trade actively. Many CLO securities trade on opaque markets lacking transparent prices. A lack of trading of CLO securities undermines the economic rationale of these securities, as well as their safety and favorable regulatory treatment. A lack of transparent prices means that neither the marketplace nor regulators can rely on prices to police risk-taking in the CLO market. Regulators must monitor and analyze data on leveraged loans and CLO markets. The OFR needs cooperation from other financial regulators in assessing risk in these markets. Lack of data sharing among financial regulators remains a crucial weakness. The OFR needs an independent source of funding. Regulators need minimum standards in their examinations with respect to assessing bank exposure to leveraged loans. I also recommend: - Stress testing of financial markets, not just individual institutions; - Requiring financial regulators to conduct war games to prepare for market disruptions; - Underscoring that the burden is on financial institutions to prove that leveraged loans and CLOs are safe rather than on regulators to prove that they are unsafe. If data gathering reveals significant systemic risk in leveraged lending/CLO markets, regulators should use a mix of tools, including limiting bank investments in CLOs, enhanced and countercyclical capital requirements, and the Volcker Rule “covered funds” provisions.

Banking stability, natural disasters, and state fragility: Panel VAR evidence from developing countries

Panel VAR methodology is used in this study to empirically evaluate the effects of natural disasters and state fragility on economic and financial dimensions in developing countries such as GDP per capita, banking and financial system deposits, banks’ Z-scores, and non-performing loans. Results based on three panels of up to 66 countries and 17 years of annual data indicate that natural disasters and state fragility may cause significant economic and financial disruption in low-income and middle-income countries. Shocks from natural disasters seem to be temporary and detrimental only to non-performing loans, while shocks from state fragility appear to be permanent and to create detrimental economic and financial feedback loops.

Business cycles, credit cycles, and asymmetric effects of credit fluctuations: Evidence from Italy for the period of 1861–2013

We propose a joint dating of Italian business and credit cycles on a historical basis by applying a local turning-point dating algorithm to the level of the variables. In addition to short cycles corresponding to traditional business cycle fluctuations, we also investigate medium cycles because there is evidence that financial booms and busts are longer and more persistent than business cycles. The results show that medium-term cycles account for the largest part of fluctuations of the Italian credit cycle. Second, we find evidence that credit and business cycles are weakly synchronized in the medium term, whereas they steadily comove in the short term, when the GDP cycle is leading the bank credit cycle. However, the study found that, over the medium cycles, economic downturns associated with credit crunches and financial disruption are more severe than other types of economic downturns. Finally, by modelling interaction between credit and business cycles in a simple threshold VAR model, we confirm that GDP response to credit shock is much more intense in the recessionary phase of credit cycle.

The impact of demonetization on Indian firms’ performance: does company’s age make a difference?

The main aim of this paper is to evaluate the impact of demonetization on Indian firm’s quarterly financial performance before and after demonetization period (March-December, 2017), and to find out if companies’ age helps to face financial disruption. Four variables, which are net sales, total income, net profit after tax, and earnings per share, were taken as proxies for analyzing the quarterly financial performance of 2,892 companies listed on Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and Calcutta Stock Exchange (CSE). Nonparametric test, particularly Wilcoxon Matched-Pairs Signed Rank Test and Kruskal-Wallis one-way analysis of variance, were applied in analyzing the data. Results reveal that there is a statistically significant difference between the financial performance before and after demonetization at 5% level of significance. It was also found that the decrease/increase in the financial performance of all the firms was affected by the demonetization process, irrespective of their ages. The findings could be useful for financial managers and financial consultants, as they would be able to focus on the issues that matter most at the time of financial disruption.

“War of Position”: Liberal Interregnum and the Emergent Ideologies

What are the leading forces and ideas that are shaping our age? In the West, a decade of financial disruption, austerity, and stagnant wages has produced a popular rejection of market fundamentalism that prevailed for over forty years. Mass immigration and multiculturalism have contributed to rapid changes in both family and community life that leave many people feeling dispossessed or even humiliated. Unresponsive government is exacerbating people’s sense of powerlessness and anger. The revolt against the status quo is fuelling a political insurgency against the establishment that replaces the old opposition of left versus right with a similarly simplistic dichotomy pitting the people against the elites. We are witnessing the failure of dualistic thinking and this will not be resolved by substituting one binary for another. Our contemporary conjuncture is such a period of interregnum and a war of position between the hitherto hegemonic ideology of liberalism and its populist rivals. The popular revolt against liberalism, which is driving the political insurgency across the West, highlights the collapse of the authority of the professional political class dominated by liberals. In what follows I shall argue that the emergent ideologies which are vying for hegemony are hyper-liberalism, nationalist traditionalism, and tech utopianism. All of them are variously anti-humanist, to which one can oppose updated versions of one-nation conservatism and ethical socialism. Before setting out the unfolding ‘war of position,’ I will first explore the new anti-humanism that underpins the main ideological movements.

A Study of Digital Payments

The challenges and emergence of a global economy and a Digital First World has created financial disruptions in e-commerce and e-business around the globe. The collaborations of banks with Fintech companies have led to digitalization being an important component of their business and marketing strategy. The application of e-banking has been demonstrated as an effective cost reduction, risk management and provides quick services to the customers. Nowadays, e-banking services have already ensured opportunities to reduce expenditures on physical structures. However, in some previous studies it has been showed that e-banking has helped banks and financial institutions to reduce costs, increase revenue, and increase customer experience. With the growth of digital banking in India, it is significant to analyze the actual situation of customer satisfaction in the banking sector. This article evaluates the various new digital banking technologies in the banking sector of India which have gained momentum after various banking reforms like the digital financial inclusion, demonetization and GST implementation. It also identifies the relationship between the increasing trends in the usage of electronic banking and a customer paradigm shift from traditional cash and paper-based cheque payment systems and evaluates various challenges and opportunities in the implementation of digitalization. This research was carried out using multiple methodologies.

Bend, Don't Break: Small Business Financial Resilience after Hurricanes Harvey and Irma

This report assesses the impact of hurricanes Harvey and Irma on small businesses’ cash inflows, outflows and balances. We leverage an anonymized sample of 40,000 firms who hold business banking deposit accounts with Chase to produce a daily view of small business cash flows from August 2017 to November 2017. We find that cash balances for the typical small business dropped by 7.4 percent after landfall in Houston and Miami, but recovered within two to three weeks. Moreover, inflows dropped by over 63 percent and recover in about a week, and outflows dropped by over 54 percent and recovered in two to three weeks. While balances and cash flows fell in all industries the week of landfall, construction, repair and maintenance firm balances increased the most in the weeks following landfall. These findings provide insight into the major financial disruption that small businesses experienced in the wake of Hurricanes Harvey and Irma, and the relative financial resilience of firms in the face of these impacts.

Determinants of the recovery of financially distressed nonprofits

Financial ratios are traditionally used to predict and diagnose financial vulnerability; this is helpful, but leaves unanswered how the vulnerable nonprofit should prioritize this information in order to survive. Using panel data, this empirical study observes the financial behaviors of distressed nonprofits for 4‐year periods where the first 2 years are financially vulnerable. Two definitions of vulnerability are tested: when liabilities exceed assets (insolvency) and when net assets shrink by more than 25% annually (financial disruption). In determining which nonprofits recover during the final 2 years, we find that the type of vulnerability impacts which financial indicators a nonprofit should target, and that common tactics such as improving profitability may be counterproductive. Finally, we do not find evidence for liabilities of newness or smallness in the statistical analysis.

Financial Crisis And Reform in the Ottoman State

The Ottoman State faced with many financial and administrative crises, especially after the 16th century. As well as t he relevant crisis periods are called as depressed ones ,they also have an important place in terms of fading of the state after the rising period of that. In this context, as the comprehension between arm and finance began to weaken, the crises began to become chronic and caused the state to regress and enter into a period of disintegration. Although appearance of the crises may seem because of the administrative reasons, it would generally be more appropriate to attribute them to the developments in the west. The Ottoman State stayed behind t he european states due to the reasons such as especially renaissance and reform movements, industrial revolution, development of capitalist production system etc ,and couldn’t keep pace with new order. However, the factors such as the inability to win wars, corruption of land management applied, inadequate production in domestic market, and some financial disruptions have also been identified as factors that trigger the crisis in the Ottoman State. In this study, the causes of the financial crisis in the Ottoman Empire will be examined , and how the changes performed to overcome the financial crisis resulted will be discussed.Besides, the topic of that to what extent a set of essential innovation movements organized by management straightened the financial structure establishes the original aspect of the study

An enactment theory model of supplier financial disruption risk mitigation

PurposeThe purpose of this study is to examine supplier financial risk through the lens of Enactment Theory, to explore the role of transparency and communication on buyers’ perceptions of supplier default risk. The authors develop a theoretical model proposing that buyer communication with suppliers leads to preemptive actions that may prevent supplier financial default and fewer supply disruptions. The results suggest that reducing equivocality in buyers through communication with suppliers leads to understanding of financial factors not captured through third-party financial indicators, leading to proactive risk mitigation activities that prevent disruptions during recessionary economic cycles. This research proposes that transparency and communication reduces equivocality in buyers, spurring them to take contractual actions that reduces, financial default in key suppliers, which leads to fewer supply disruptions.Design/methodology/approachSurvey data collected from 175 firms in the North America and Brazil during a period of the global recession is used to test the impact of communication with suppliers on supply chain disruptions in periods of economic crisis. This relationship is mediated by proactive contract renegotiation and supplier financial health, supporting a model grounded in Enactment Theory.FindingsResults show that buyers who regularly assess and develop an understanding of their key suppliers’ financial conditions are more likely to re-negotiate contracts that revise payment terms, leading to improved supplier working capital and fewer supply chain disruptions.Research limitations/implicationsValidation of industry-specific financial ratios and figures could provide a richer set of insights and some quantitative measures for establishing baseline on what levels of financial ratios actually result in disruptions. However, future research should consider using a cross-sectional sample and, in addition, a qualitative approach to capture risk from a greater variety of industries and supply chain dynamics.Originality/valueThe notion of effective communication flows as a means for reduction of supplier disruption risk is aligned with Enactment Theory views that emphasize the benefits of risk reduction. Equivocality is reduced in buyers through information exchange and formal assessments in complex environments. This research suggests that while such communication does not have a direct effect on supply disruption risk, it is mediated through proactive buyer actions to improve supplier financial health and contract re-negotiation mechanisms that may preempt financial distress. These are important lessons learned that provide guidelines for supply chain executives in future economic recessions that may occur in the coming years.

Financial disruption and state dependent credit policy

This paper analyzes unconventional monetary policy decisions related to transitory episodes of financial intermediation disruption. We consider unconventional monetary policy decisions as temporary policies aimed at dampening the consequences of financial and real shocks on the provision of loans. In a DSGE model with financial frictions, we provide a simple approach to the decision to begin and end up unconventional policy measures, by specializing this kind of policies to periods with loan supply shortages. Accounting for an endogenous length of loan supply shortages we find that this policies have two main effects. As previously found in the literature, by raising the value of the lending accelerator in a situation of loan scarcity, they dampen the consequences of shocks. As a second effect (new in the literature), such policy measures increase the length of the loan saturation period making the combination of conventional and unconvential policies an enduring policy solution. These results extend to the Zero Lower Bound situation.

The Lived Experience of ‘Being Evaluated’ for Organ Donation

Background and objectives Comprehensive evaluations are required to safeguard voluntarism and minimize harm to living kidney donors. This process is lengthy, invasive, and emotionally challenging, with up to one fifth of potential donors opting out. We aimed to describe donors’ experiences of the evaluation process. Design, setting, participants, & measurements We conducted 14 focus groups involving 123 kidney donors who completed donation from three transplant centers (Australia and Canada). Transcripts were analyzed thematically. Results We identified six themes reflecting donors’ experiences of evaluation. The themes that related to perseverance included emotional investment (prioritizing the recipient’s health, desperation for a normal life, protecting eligibility, shame of disappointing others, and overcoming opposition), undeterred by low risks (medical confidence and protection, worthwhile gamble, inherent invincibility, and normalizing risks), and mental preparation (avoiding regret, resolving decisional ambivalence, and managing expectations of recovery). The challenges included underlying fears for health (processing alarming information, unsettling uncertainty, and preoperative panic), system shortfalls (self-advocacy in driving the process, stressful urgency, inconsistent framing of safety, unnerving bodily scrutiny, questioning risk information, and draining finances); and lifestyle interference (living in limbo, onerous lifestyle disruption, and valuing flexibility). Conclusions Previous donors described an emotional investment in donating and determination to protect their eligibility, despite having concerns for their health, financial and lifestyle disruption, and opposition from their family or community. Our findings suggest the need to prepare donors for surgery and recovery, minimize anxiety and lifestyle burdens, ensure that donors feel comfortable expressing their fears and concerns, reduce unnecessary delays, and make explicit the responsibilities of donors in their assessment process. Podcast This article contains a podcast at https://www.asn-online.org/media/podcast/CJASN/2017_10_16_CJASNPodcast_17_11_.mp3

Financial disruptions and the cyclical upgrading of labor

Amid total factor productivity (TFP) shocks job-to-job flows amplify the volatility of unemployment, but the aggregate implications of job-to-job flows amid financial shocks are less understood. To develop such understanding we model a general equilibrium labor-search framework that incorporates on-the-job (OTJ) search and distinctly accounts for the differential impact of TFP and financial shocks. Surprisingly, we find that the interaction of OTJ search with financial shocks is sufficiently different from its interaction with TFP shocks so that, under standard calibrations, our model generates aggregate dynamics exceedingly in line with the behavior of key U.S. macro data across several decades and in the wake of the Global Financial Crisis (GFC) as well. Importantly, as in the data, the model yields relatively high volatilities of consumption, labor income, and unemployment. As such, our work contributes to resolving two limitations of current general equilibrium labor-search theory: under standard calibrations and amid TFP shocks, only, models without OTJ search generate implausibly low unemployment volatility, while models with OTJ search generate unemployment volatility closer to the data but at the expense of implausibly low consumption and labor-income volatility.

Financial Disruptions and the Cyclical Upgrading of Labor

Amid total factor productivity (TFP) shocks job-to-job flows amplify the volatility of unemployment, but the aggregate implications of job-to-job flows amid financial shocks are less understood. To develop such understanding we model a general equilibrium labor-search framework that incorporates on-the-job (OTJ) search and distinctly accounts for the differential impact of TFP and financial shocks. Surprisingly, we find that the interaction of OTJ search with financial shocks is sufficiently different from its interaction with TFP shocks so that, under standard calibrations, our model generates aggregate dynamics exceedingly in line with the behavior of key U.S. macro data across several decades and in the wake of the Global Financial Crisis as well. Importantly, as in the data, the model yields relatively high volatilities of consumption, labor income, and unemployment. As such, our work contributes to resolving two limitations of current general equilibrium labor-search theory: under standard calibrations models without OTJ search generate implausibly low unemployment volatility, while models with OTJ search generate unemployment volatility closer to the data but at the expense of implausibly low consumption and labor-income volatility.

Financial Disruptions and the Cyclical Upgrading of Labor

Amid total factor productivity (TFP) shocks job-to-job flows amplify the volatility of unemployment, but the aggregate implications of job-to-job flows amid financial shocks are less understood. To develop such understanding we model a general equilibrium labor-search framework that incorporates on-the-job (OTJ) search and distinctly accounts for the differential impact of TFP and financial shocks. Surprisingly, we find that the interaction of OTJ search with financial shocks is sufficiently different from its interaction with TFP shocks so that, under standard calibrations, our model generates aggregate dynamics exceedingly in line with the behavior of key U.S. macro data across several decades and in the wake of the Global Financial Crisis as well. Importantly, as in the data, the model yields relatively high volatilities of consumption, labor income, and unemployment. As such, our work contributes to resolving two limitations of current general equilibrium labor-search theory: under standard calibrations models without OTJ search generate implausibly low unemployment volatility, while models with OTJ search generate unemployment volatility closer to the data but at the expense of implausibly low consumption and labor-income volatility.

On the Retreat of Liberalism and the Renewal of Politics

The Center Has Not Held Across the West, the old liberal center is coming apart and the extremes are resurgent. A decade of financial disruption, austerity, and stagnant wages has produced a popular rejection of market fundamentalism. Mass immigration, multiculturalism, and weaker civic ties have left many people feeling dispossessed and humiliated. Part of the revolt against the elite consensus comes from economic and cultural insecurity, and it is fueling the support for anti-establishment insurgents not just on the fringes but also in the mainstream of Western politics—whether the radical right of Donald Trump and the Tory arch-Brexiteers, or the…