Financial Storm Research Articles

A Pandemic's grip: Volatility spillovers in Asia-Pacific equity markets during the onset of Covid-19

The emergence of Covid-19 in late 2019 rapidly shattered the Asia-Pacific region (APR), a bastion of economic dynamism, and it became the epicenter of the global health crisis. This unprecedented pandemic not only triggered a public health catastrophe but also unleashed a financial storm, exposing vulnerability within the region's interconnected economies. This study identifies the factors driving volatility spillovers within Asian-Pacific financial markets during the initial wave of the Covid-19 pandemic (January 2020–February 2021). We analyze the interplay of pandemic transmission dynamics, government interventions, central bank policies, and socioeconomic variables. Our findings reveal a robust and persistent association between the rising number of Covid-19 cases per million and volatility spillovers. We introduce three novel determinants—the number of intensive care unit beds, population density, and the proportion of the elderly population—which significantly impact volatility transmission in response to new cases. Stringent government measures, such as travel bans and lockdowns, mitigate volatility spillovers. Conversely, central bank policies increase volatility spillovers. These insights contribute to a deeper understanding of financial market dynamics in the context of global health emergencies. This knowledge equips policy makers in the APR with valuable tools for navigating future crises.

Strategic decisions in the Indian aviation sector: A comparative analysis before and after covid-19

Imagine four Indian airlines soaring high before the pandemic – Air India, IndiGo, GoFirst, and AirAsia India – each with unique financial strategies fueling their flight paths. This report takes you on a deep dive into their pre-COVID cockpits, exploring their investment choices, loan agreements, dividend payouts, and how they kept the fuel gauge steady. Then, brace for turbulence as COVID-19 rocks the industry. We'll see how these airlines adapted, tightened their belts, and navigated the financial storm, learning valuable lessons from growth, debt, and operational efficiency in both calm and chaotic skies. Get ready for a nuanced tale of resilience, adaptation, and the sky never being quite the same again for these Indian aviation giants.

Analysis of the Relationship between Expansionary Monetary Policy and the Housing Bubble in the United States based on the Taylor Rule

The "subprime crisis" refers to a situation that occurred in the United States in which investment funds were compelled to close due to the bankruptcy of subprime mortgage institutions, causing stock market volatility brought on by the financial storm. This situation occurred between 2006 and 2009 and is referred to as the bubble economic crisis. It caused a liquidity crisis in the major financial markets around the world. In the spring of 2006, the "subprime mortgage crisis" in the US started to manifest. The Taylor rule argues that expansionary monetary policy is the cause. The housing bubble in the United States and expansionary monetary policy are the subjects of this essay. As a result of the analysis of related phenomena, this paper concludes that the subprime crisis is caused by expansionary monetary policy.

50th Anniversary of TPRC—Research Conference on Communications, Information and Internet Policy: Looking Ahead to the Next 50 Years

50th Anniversary of TPRC—Research Conference on Communications, Information and Internet Policy: Looking Ahead to the Next 50 Years

Does it pay to be a faithful investor? A risk-based approach performance analysis of Islamic funds vs UCITS schemes

PurposeThis paper empirically investigates the performance of Islamic funds, which have been praised for weathering the 2008 financial storm relatively well and compares it to a European product designed to protect the most vulnerable of investors, UCITS funds.Design/methodology/approachThis paper builds on 128 time-series regressions using various factor models to analyse the risk-return relationship of 242 Islamic and UCITS funds relative to a market benchmark, over a 10-year period starting January 2006, to capture severe bear and bull market conditions.FindingsIslamic funds do not face a competitive disadvantage arising from their strict compliance with Sharīʿah principles, and their performance and investment style is relatively similar to UCITS schemes.Practical implicationsIslamic funds represent a low risk investment due to their very mild betas. Therefore, when forming part of a diversified portfolio, they can act as a hedging tool against adverse market movements.Social implicationsMuslim investors are not punished relative to conventional retail investors when following their own beliefs. Other investors can consider Islamic funds in their portfolio allocation, especially those who seek socially and ethically responsible investments.Originality/valueThis paper fills a lacuna in the existing literature, because the sample is made up of Islamic funds established worldwide and includes not only equity, but also fixed income and mixed allocation funds.

Barbados sovereign debt restructuring 2018–2019—like the island, small but perfectly formed

The Caribbean is no stranger to sovereign debt restructurings. It is hard to imagine another region of the world with a higher ratio of GDRs per capita. In only the last ten years (a blink of an eye in sovereign debt years), each of Antigua and Barbuda, Belize, Grenada and St Kitts and Nevis have undergone debt restructurings and Jamaica has done so twice. So what is newsworthy about the debt restructuring just completed by Barbados? There are two significant “firsts”, as will be described in more detail in this article: - first use in the Caribbean of local law legislation to introduce a class voting system across exiting local law sovereign bonds, a la Greece ; and - first country to take advantage of a re-papering of the terms of its domestic and foreign sovereign debt to include a “natural disaster” clause to enable the deferral of debt service costs in the event of significant damage caused by a natural disaster. Barbados is, economically, in a relatively privileged position within the Caribbean. Its GDP per capita is in the same IMF bracket as Portugal and Mexico and three and four times than the GDP per capital of Dominica and Jamaica, respectively . Geographically too, Barbados is in a relatively privileged position. It stands out on its own, about 150kms east of the crescent of islands that make up the Windward Islands and Leeward Islands, known collectively as the Lesser Antilles. It’s latitude makes it one of the more southerly of the Lesser Antilles, which is believed to make the island less at risk of hurricane damage than more northerly islands. However, Barbados’ privileged position made it particularly vulnerable to the financial storm that followed the global financial crisis. As a service provider of higher end Caribbean vacations, Barbados was particularly impacted by the downturn in vacation spending by those in the UK, US and Europe whose disposable income had been constrained by the financial crisis. As one of the wealthier countries in the Caribbean, international private creditors had been keen to provide loans and buys bonds issued by Barbados in the boom years leading up to the financial crisis. Even before the fall in GDP per capita that coincided with the financial crisis, the debt to GDP of Barbados had been rising precipitously from 53.8% in 1999 to 100% in 2009. By the time prime minister Mia Mottley swept into government following a landslide election victory in May 2018 (in which her party won all 30 seats in the Barbados parliament), the island’s debt to GDP had reached 175% including arrears. With characteristic decisiveness, immediately on entering office Ms Mottley announced that there would be a restructuring of the country’s debts.

An earthquake or a category 4 financial storm? A corpus study of disaster metaphors in the media framing of the 2008 financial crisis

AbstractThis study investigates the use of disaster metaphors in the American media coverage of the 2008 global financial crisis. More specifically, it aims to examine the role of different sub-metaphors in performing various pragmatic and rhetorical functions in financial news discourse. Using the Metaphor Identification Procedure, this study identifies key words from the 1-million-word corpus which comprised the news articles published from September 15, 2008 to March 15, 2009, and examines the associated concordance lines to discern their metaphorical connotations. The findings show that a wide range of sub-source domains of disaster—namely, wind, storm, and water—metaphors was deployed by journalists to capture the various negative impacts of the financial crisis. These findings suggest that the salient extension and mixing of metaphors could enhance the popularization of specialist financial news discourse. The findings also indicate that the news media was complicit in constructing the collective illusion that the financial crisis was unavoidable and not caused by anyone.

Technology and the Predicament of Time in Don DeLillo’s Cosmopolis

Based on a close reading of Don DeLillo’s Cosmopolis, the concept of time has been explored from three perspectives: the evacuated now, the unreturnable past and the lost future. Great emphasis is put on the influences global capital market has on the perception of time. The predicament of time has been deeply influenced by the mechanism of the acceleration caused by the chaotic financial market and influences on subjectivity in the financial storm which everyone has been wrapped in.

Brewed for decades: Cyprus' perfect financial storm

The Cypriot banking catastrophe was a momentous point in economic history at which a tiny island suffered such acute financial distress that it shook the entire Eurozone. Here we trace how Cyprus go to that point, via a series of mishaps and misjudgements, and missed escape routes going back over four decades. Cyprus will go down in history as one of the closest there has ever been to a perfect storm of financial instability, brewed from terrible decisions by its banks, supervisors and politicians; compounded by rotten luck and bad timing. Even Cyprus’ political and financial strengths made things worse by delaying firm action and allowing losses to build. Most imaginable horrors that could happen to a banking system did happen, and that was even before the controversial and partially botched international rescue operation. It was an international crisis in many senses of the word. The crisis was hosted in Cyprus, massively escalated by events in Greece, and paid for in large part by Russian depositors. There are lessons for Greece, but the experiences also have important differences. Crucially, there was a strong constituency in Cyprus to support painful austerity and structural reforms necessary to get rid of capital controls. That does not exist in Greece. The dramatic unfolding of events on the night of 15 March 2013 also provides a lesson that was not heeded in Greece. All‐night negotiating sessions against hard‐deadlines tend to lead to highly flawed agreements, though they are also a symptom of such commitment to the euro that things might work out in spite of the flaws.

海上丝绸之路建设对人民币区域化的助推作用—以中国–东盟自由贸易区(CAFTA)为例

中国经济实力的不断增强，以及1997年的亚洲金融危机和2008年的全球金融风暴为推进人民币区域化提供了契机。但随着西方发达国家经济体经济复苏，人民币区域化面临挑战。2013年国家提出建设21世纪海上丝绸之路的区域经济发展战略，本文在介绍现阶段人民币区域化现状，并说明建设21世纪海上丝绸之路实际上是推进海上丝绸之路经济区域贸易一体化的基础上，从贸易视角用中国——东盟自由贸易区(CAFTA)背景下人民币区域化进展的经验论证中国建设21世纪海上丝绸之路将助推人民币区域化，并提出在建设21世纪海上丝绸之路过程中助推人民币区域化的措施。 The rising power of China’s economy, the 1997 Asian financial crisis and the 2008 global financial storm provided opportunities to promote the RMB regionalization. But with the recovery of western developed countries, the RMB regionalization faced challenges. Meanwhile, the Chinese government put forward the national strategy of construction of the 21st Century Marine Silk Road in 2013. This article introduced the present status of the RMB regionalization, indicating that the construction of the 21st Century Maritime Silk Road actually facilitated regional trade integration, and then took an example of the China-ASEAN free trade area (CAFTA) to demonstrate that the construction of the 21st Century Marine Silk Road would push the RMB regionalization from the perspective of trade. At last, several measures, which boosted RMB regionalization in the process of the construction of the 21st Century Marine Silk Road, were provided.

Hard times: the divisive toll of the economic slump

2008 was a watershed year for global finance. The banking system was eventually pulled back from the brink, but the world was saddled with the worst slump since the 1930s Depression, and millions were left unemployed. While numerous books have addressed the crisis, very little has been written about its social consequences. Journalist Tom Clark draws on the research of a transatlantic team led by Professors Anthony Heath and Robert D. Putnam to determine the great recession's toll on individuals, families, and community bonds in the United States and the United Kingdom. The ubiquitous metaphor of the crisis has been an all-encompassing financial storm, but Clark argues that the data tracks the narrow path of a tornado--destroying some neighborhoods while leaving others largely untouched. In our vastly unequal societies, disproportionate suffering is being meted out to the poor--and the book's new analysis suggests that the scars left by unemployment and poverty will linger long after the economy recovers. Politicians on both sides of the Atlantic have shown more interest in exploiting the divisions of opinion ushered in by the slump than in grappling with these problems. But this hard-hitting analysis provides a wake-up call that all should heed.

Impact of the economic recession on the etiology of maxillofacial fractures in Greece.

The global economic crisis and the subsequent austerity measures taken in Greece in 2010 have moved the country to the epicenter of a financial storm with negative effects on the national health sector and all aspects of social life. Records of patients admitted for treatment of maxillofacial fractures in two different periods of time were used in this study. Data concerning the etiology of fractures from 2006 to 2009 were compared with data from 2010 to 2013 to investigate whether the economic recession has significantly influenced the causality of trauma. Our study demonstrates that the rate of facial fractures caused by motor vehicle accidents before the worsening of the crisis was significantly reduced in the period after 2010 but that the incidence of fractures due to interpersonal violence increased during the period of the severe economic crisis. We discuss the reasons that may have led to these changing patterns of trauma.

Utilities in the Eye: Caught in the Perfect Financial Storm [In My View

Utilities in the Eye: Caught in the Perfect Financial Storm [In My View

Is Financial Regulation Appropriately Dealing with Systemic Risk? Are We Really Fixing Existing Problems or Creating New Ones?

What is the purpose of financial sector regulation? What problem are we trying to solve? We are not (or should not be) trying to eliminate from the market. There is an optimal level of and surely it is not zero. That means that there could exist inefficiently high levels of risk, but also inefficiently low levels.Instead, we are trying to eliminate what might be called risk. But what makes excessive? To an economist, that can only mean which is priced too low, perhaps even not priced at all. But that is another way of saying which has not been fully internalized in the market, which is another way of describing an externality. In this article I summarize important shortfalls of current regulatory requirements, namely stress testing, to deal with the actual problem.I argue that the to fix the problem of risk by the banks is to directly look into the banks’ liabilities that are prone to a bank run and regulate these instead. It is simpler, straight to the core of the problem, significantly less costly to implement and less costly in terms of negative effects that excessive and mis-targeted regulation can have in terms of economic growth, than the approach actually adopted.There were many components to the 2007-2009, which did create a perfect financial storm. But at the end of the day, it was fundamentally a problem of too much leverage on very short term debt. This fact was the trigger of the run and I believe also a key driver of contagion throughout the financial sector. Therefore, avoiding excessive will require that financial institutions taking deposits, borrowing overnight and issuing fixed-value money-market shares or any other type of asset that can cause a bank run then it will have to back up 100% of its liabilities with short term treasuries or reserves at the Fed.

Surprising Comparison Of Risk And Return Factors Between Real Estate Investment Trusts (REITs) And The S&P 500 Index During The 2000-2011 Time Period

<p>We composed and contrasted stock returns for large capitalized companies (S&P 500) with returns of real estate investment trusts using the Financial Times equity, mortgage and composite indexes. The time period which was chosen was 2000 through 2011. This period is significant because up until the crash of 2008, the real estate bubble was forming. Major real estate problems were already in force in 2007, but serious deflation really did not fully commence until the stock market crash in the late summer and early fall of 2008. With such heavy doses of deflation, one would think real estate was doomed. We found that average returns for the S&P 500 during this time period was 2.44% vs. a 13.73% average return for the composite Real Estate Investment Trusts (REIT) index. We calculated the geometric returns of .0054% for the S&P 500 vs. 11.21% for the composite REIT. This geometric return calculation was necessary because of many negative returns over a short period of time. The real surprise came when we risk adjusted our numbers using coefficients of variation. Using average returns, we found that the S&P 500 took 7.9959 units of risk for each unit of return, while the composite REIT composite only took 1.6497 units of risk per return. Even the SE Mortgage index only took 2.4914 units of risk per unit of return, while the Equity REIT index took on 1.5744 units of risk per return. Utilizing geometric returns or compounded rates of return, we found a coefficient of variation (CV) of 9.755 for the S&P 500, where the composite REIT experienced a 2.0205 CV and the FTSE Mortgage index showed a 4.0023 CV. Even though mortgage REITs took a greater hit than equity REITs, we still found a favorable relationship of risk and return vs. investment in common stocks. Money managers, who were properly diversified, rode out the financial storm much more comfortably with REITs as part of their diversification parameters.</p>

Operating Performance of Public Banks in Taiwan after Privatization

The study selected nine state-owned banks in Taiwan that went on privatization in 1998 and foreign banks with similar assets scales and more branches in Taiwan as sample. Data Envelopment Analysis (DEA) is applied to explore the variation condition of efficient values for the periods between 1995 and 2007, prior and after each state-owned bank became privatized. To avoid data bias, the years affected by financial storm (from 2008 to 2010) were eliminated. Empirical results of the study are: The number of branches and assets return ratio are positively correlated to overall technical efficient value; savings and government holding ratio are negatively correlated to overall technical efficient value, showing that government releasing stock holdings through privatization can actually improve bank operating efficiency. The result of MannWhitney non-parametric examinations show that: Before the state-owned banks in Taiwan privatized, their average operating efficiency is significantly lower than that of foreign owned banks. After privatization, there is no significant difference in operating efficiency between state-owned and foreign-owned banks, revealing that privatization has effect of enhancing operating efficiency in public banks.

Trends in hotel investment and financial management in Canada

PurposeThis paper aims to analyse trends related to hotel investment in Canada and propose innovative practices for the financial management of hotels.Design/methodology/approachThe foundation for this paper was laid during a well‐attended Worldwide Hospitality and Tourism Themes (WHATT) roundtable discussion between industry leaders and hospitality educators in May 2012. Topics of hotel investment and financial management in Canada are discussed in the context of the theme for the 2012 Canadian WHATT roundtable and the strategic question: “What innovations are needed in the Canadian hotel industry and how might they be implemented to secure the industry's future?”FindingsThe paper outlines historic hotel investment patterns dating back to the 1980s and analyses the current investment climate. Out of 850 hotels sold in Canada during the first decade of this millennium, foreign investor participation was less than 10 per cent. Currently the foreign interest in hotel investment in Canada is increasing and hotel assets in the 100‐175‐room range are more popular.Practical implicationsThe paper presents three innovative practical tools for strong financial management of hotels to optimise ROIs – profit sensitivity analysis, strategic revenue management and embracing historical low interest rates.Originality/valueAlthough Canada has done well weathering the global financial storm, Canadian hoteliers should exercise due diligence in financial management. As the team of authors represents both the industry and academia, this paper will be of immense value to students, researchers, and educators, as well as practitioners.

My Yale Students’ Turn: Sunzi, Laozi, and Zhuangzi as Solutions to Today's Financial Crisis

A year ago my Yale colleague Harold Bloom, in his op-ed in The New York Times (entitled “Out of Panic, Self- Reliance”) pointed out the striking similarities between the financial crashes of 1837 and 1929, and also 2008. He noted that in 1837 the great American writer Ralph Waldo Emerson was so “electrified” by the financial storms that he proposed “self-reliance” as the solution to the American people at the time. Emerson felt that his generation was “bankrupt of principles and hope, as of property” and so he hoped that all Americans would use the chance to recover their traditional value of self-reliance. Seeing a recurrence of the great depression in 2008, Bloom strongly urged today's new American president to find a similar solution to the economic crisis.My Yale students, however, do not believe that Emerson, the 19th century Concord philosopher, has the solution for our financial crisis in today's global age. Instead, my students look to the Eastern civilization for guidance, thinking that it is time for the West to learn from the intuitive mind of the East.In my course on Sunzi, Laozi, and Zhuangzi last semester, our main topic of discussion naturally focused on the applicability of these ancient Chinese thoughts to modern issues. Coincidentally the students in my class fall into 3 groups: (1) those who apply Sunzi's pragmatic military advice to today's economic issues, (2) those who believe in Zhuangzi's idealistic Daoism and prefer a solution that is beyond the immediate, and (3) those who mediate between the first two positions, while drawing their ideas largely from Laozi.It is the purpose of this paper to sum up how my Yale students, in these three different (but complementary) groups, applied the ancient Chinese philosophers and their texts to a diverse range of contemporary issues--especially as a response to today's financial crisis.

From the Water Commons Movement to the Commonification of the Public Realm

When the economic and financial storm broke, the Italian government asked the collectivity to come together to defend capital and the international financial powers by satisfying their thirst for privatization. The government plan was to sell off the country’s common patrimony, starting with water services and other local utilities, which would have been obliged to open to private shareholders. The Italian people, on the contrary, answered by coming together to defend the commons, voting en masse in June 2011 at the referendum called by the social movements against the privatization of the management of water and other local services of general interest. Ninety-five percent of those voting voted against allowing a profit to be made from managing a commons. This vote was against privatization but also against the old public model, which has at this time been completely subjected to and aligned with private and market reasoning. The exploitation of the common realm as a whole (both material and nonmaterial) thus constitutes the heart of capitalist accumulation and directs new waves of enclosures.

Retirement, Recessions and Older Small Business Owners

Retirement, Recessions and Older Small Business Owners