Transitional Arrangements Research Articles

Ending Too-Big-To-Fail: Progress Since the Crisis, the Importance of Loss-Absorbing Capacity and the UK Approach to Resolution

In 2008 the largest cross-border banks were too big to fail and had to be bailed out, inappropriately penalising taxpayers and rewarding bank investors. This paper reviews the major progress since then in seeking to end ‘too-big-to-fail’. This has involved several strands: the development of resolution regimes; the negotiation and agreement of cooperative resolution strategies for global systemically-important banks (G-SIBs); the identification of barriers to resolvability; and paving the way to removing those barriers. A crucial aspect of this is requiring all banks to have sufficient loss-absorbing capacity to ensure their orderly resolution. Following adoption by the G20 of the Financial Stability Board’s standard on total loss-absorbing capacity (TLAC), the UK authorities have recently published their policy on TLAC and its Bank Recovery and Resolution Directive equivalent Minimum Requirement for Own Funds and Eligible Liabilities (MREL)—the minimum requirement for own funds and eligible liabilities. The provisions link both the quantum and quality of TLAC or MREL resources to the preferred resolution strategy, whether that is bail-in, partial transfer or liquidation, on a case-by-case basis. This ensures that a one-size-fits-all approach is not taken to resolution of different types of bank. The UK rules also provide a degree of flexibility to UK banks in meeting their MRELs, both by specifying appropriate transitional arrangements and by making the final requirements subject to review by the UK authorities. This will take into account any changes to the UK regulatory environment in coming years and the actual experience of UK banks in raising loss-absorbing resources.

Health care for young adults undergoing predictive genetic testing for cardiomyopathies

Background: Predictive genetic testing is important for risk stratification in inherited cardiac conditions, yet may cause psychological distress. The aim of this study was to determine the healthcare needs of young adults undergoing predictive testing for inherited cardiomyopathies. Method: In this qualitative study, 11 young adults (aged 16–25 years) were interviewed; data was analysed inductively using thematic analysis. Results: Interviewees had a reasonable understanding of inheritance but there was often confusion between cardiac imaging and genetic testing results. Young adults who described a traumatic experience following a family member's diagnosis showed more anxiety than those who had known about their risk since birth. Participants expressed anxiety regarding their future health, reproductive plans and career choices. Conclusion: Confusion, reliance on parents and limited communication with others may be especially applicable to young adults having predictive testing. Implications: Tailored counselling is needed, with appropriate transitional arrangements to enable young adults to assume responsibility for their health care.

Inevitability and contingency: The political economy of Brexit

Placing Britain’s vote on 23 June 2016 to leave the European Union (EU) in historical time raises an immediate analytical problem. What was clearly the result of a number of contingencies, starting with the 2015 general election where we can see how events could readily have turned out otherwise, the result might also represent the inevitable end of Britain’s membership of the EU seen from the distant future. This article seeks to take both temporal perspectives seriously. It aims to provide an explanation of the turn to Brexit that recognises the referendum result as politically contingent and also argues that the political economy of Britain generated by Britain’s position as non-euro member of the EU while possessing the offshore financial centre of the euro-zone and Britain’s eschewal in 2004 of transition arrangements on freedom of movement for that year’s accession states made Brexit an eventual inevitability, saving a prior collapse of the euro-zone.

Brexit – Customs borders will impose costs and delays

▀ The UK's decision to leave the EU customs union is likely to see physical customs borders being introduced, including in Ireland. This will impose administrative costs and delays, with our modelling suggesting that introducing customs checks would reduce the level of UK GDP in 2030 by between 0.7–1.3%. But there are opportunities for the two sides to limit the damage through cooperation and the UK could also mitigate the costs by agreeing free‐trade agreements (FTA) with third countries. ▀ The UK can take as ‘light‐touch’ an approach to customs checks on imports from the EU as it desires. But it is likely that the EU will introduce customs checks on goods imported from the UK, even if the two sides agree an FTA, to ensure regulatory compliance and that ‘rules of origin’ have been satisfied – this will be particularly important if the UK agrees FTA with countries the EU does not have deals with. ▀ Introducing customs borders would pose some logistical problems, particularly in the Dover Strait where existing infrastructure is limited and there are space constraints. A potential fivefold increase in customs declarations will also pose challenges on the IT front. If the UK and EU are unable to agree transitional arrangements, then the additional infrastructure would need to be up and running in a very short period of time. This risks a period of substantial disruption. ▀ Traders will have to complete additional paperwork – such as export licences and import declarations – but much of this can be dealt with electronically, which should help to limit costs and delays. In addition, if the two sides were to share information then this could help to limit the extent to which risk‐based inspections caused delays. ▀ The Government is effectively calculating that the benefits from agreeing FTA with other countries will outweigh the costs of customs controls on the UK‐EU border. This judgement looks doubtful and, at best, would take many years to bear fruit.

Towards the Definitive VAT System – Update on the Implementation of the VAT Action Plan

The article provides an update on the implementation of the VAT Action Plan as regards the Commission’s proposal setting out the fundamental principles of the definitive single EU VAT area and a number of short-term measures to improve the functioning of the VAT system until the definitive regime has been implemented. It explains problems with the current transitional VAT arrangements, goes through the options for review as set out in the Impact Assessment accompanying the proposal and develops reasoning behind the preferred option. It then presents the contents of the proposal: cornerstones of the definitive system and the “quick fixes” relating to the call-off stock arrangements, VAT identification number, chain transactions and the proof of the intra-Community transport of the goods. It includes the explanation of the notion of the certified taxable person introduced by the proposal.

World Economic Prospects

Overview: A world with higher inflation Our world GDP growth forecasts are unchanged this month, at 2.6% for 2017 and 2.9% in 2018. But we expect a sizeable increase in inflation, to 3.3% in 2017 from an estimated 2.8% in 2016, as the effect of higher oil prices feeds through. Global indicators continue to point to a pick‐up in activity towards the end of last year, driven by stronger manufacturing activity. The global manufacturing PMI rose to the highest level in almost three years in December, while the composite index – which includes services – was at a 13‐month high. World trade should be underpinned by stronger growth in the US (2.3% in 2017 and 2.5% in 2018), bolstered by the anticipated effects of President Trump's expansive fiscal policies. That said, uncertainties around our central forecast are unusually high given the high level of uncertainty surrounding the Trump administration. Encouragingly, there are increasing signs that the tighter labour market is leading to a pick‐up in wage inflation in the US, which will support consumers. Given these reflationary trends, we expect two increases in the Federal funds rate this year and US bond yields are likely to continue to rise. The widening of interest rate differentials between the US and the Eurozone will drive the euro down to parity with the US dollar by end‐2017 for the first time since 2002. We have revised our Brexit assumptions this month. We now assume that the two‐year period of exit negotiations is followed by a transitional arrangement lasting 2–3 years. This would provide breathing space to negotiate a free trade agreement with the EU. Emerging market growth on the whole will improve in 2017 but performance will differ across countries: Russia and Brazil will exit recession, but countries with weak balance of payments positions, high dollar debt and exposure to possible US protectionist actions will be at risk. In China, policymakers are moving to greater emphasis on reducing financial risks and less focus on the 6.5% GDP growth target for 2017. Continued action is also likely to dampen further depreciation of the CNY.

Should the UK Pay an EU Divorce Bill?

The UK is leaving the EU and needs to close its accounts. In a divorce, the two sides divide up the assets and liabilities. But the situation here is more like leaving a club, so the question is when the obligation to pay membership fees should end. One option would be simply be for the UK to cease payments at the end of March 2019 (with no bills thereafter). The UK would be on strong legal ground if it decided to do so. Article 50 is clear that, in the absence of any other agreement, EU treaty obligations will cease to apply after that date. However, a more flexible stance could help secure better terms on other aspects of the negotiations, including any transitional arrangements before a comprehensive free trade deal can be concluded. It seems fair that the UK should be asked to make some contribution towards long-term financial commitments undertaken when the UK was a member – even if the money is spent after the UK has left. A sensible cut-off date would be the end of 2020, when the EU’s current multi-year budget process is completed. If the UK continues its planned payments until then, the bill would ocme to around €25 billion, which might be topped up to €30 billion (£26 billion) with a few reasonable extras. However, the EU is demanding a lot more than this, including large contributions to spending likely to take place long after 2020, and upfront payments for contingencies that may never materialise. If the EU is unwilling to compromise, the UK can, and should walk away without paying a penny.

Brexit Transitional Arrangements: Legal and Political Considerations

This paper assesses the different options for the post-Brexit transition. It explores each option in detail, considering how it could be achieved in practice, what the salient legal and policy implications are, and whether it is politically feasible. The most desirable and simplest transition option, consistent with the UK and EU’s position, is extending the acquis communautaire, without membership. It would mean minimal disruption to UK-EU cooperation and trade. However, it would entail continued budgetary contributions, ECJ jurisdiction and the primacy of EU law (including free movement).

Transition enfant-adulte au cours de la mucoviscidose

Because of early and effective therapies, an increasing numbers of young people with cystic fibrosis (CF) reach adulthood. Preparing for and maintaining high quality CF care in the adult healthcare is critical for prolonged survival. Because adverse health consequences occur when inadequate transition arrangements are in place, safely transferring patients from pediatric to adult care is a priority. Key features include an early preparation, planning and self-management skills, a coordinated approach and a detailed communication between patients, families, pediatric and adult teams. Formal transition protocols and audits can support the process and be helpful for multidisciplinary teams.

Transition arrangements to a new editorial structure

Transition arrangements to a new editorial structure

Negotiating the UK's Post-Brexit Trade Arrangements

This paper considers the agenda for UK trade negotiations over the post-Brexit period. There are several groups of countries that will need to be dealt with and we consider the priorities among them. Negotiations with the WTO and the EU are the most important and the most pressing in time, and should be pursued simultaneously. On the former, the UK must try quickly to establish its independent WTO status, which will be greatly facilitated by minimising the changes it proposes to its tariffs schedules. On the EU the UK needs to consider the choices between remaining in the customs union, creating an FTA with the EU and maintaining the ‘regulatory union’ that is the European Economic Area (EEA). Only when relations with the EU and WTO are clear will it be feasible to negotiate trade deals of various sorts with other countries, ranging from those with which we already have deals via the EU to those that currently trade with us on ‘WTO rules’. All of this takes time and we argue that it may be worth pursuing transitional arrangements to extend certain current trading arrangements a few years beyond Brexit in order to make time for serious negotiations.

"It Can't Happen Soon Enough." The Role of Readiness in Residential Moves by Older Parents.

My father moved from his home of 92 years to a care community in a distant location. This is the story of his move, from the perspective of a gerontologist and soon-to-be young-old daughter. I describe the events that prompted my father's decision to make the move, how I chose the care community, the transition arrangements, and the outcomes. I discuss key factors that contributed to the successful transition, all with a focus on readiness. Other factors included drawing on my knowledge as a gerontologist, using informal networks to identify a care community, visiting the care community repeatedly, and communicating openly and often with family. I briefly describe my father's quality of life after the move. I examine my experiences in the context of relevant research in gerontology, recommend how gerontologists can manage transitions to care communities for their aging parents, and offer suggestions for research.

Pupils’ perceptions of Key Stage 2 to Key Stage 3 transition in modern foreign languages

Modern foreign languages (MFL) are now established on the timetable of English primary schools. This study accesses the views of the pupils on the experience of learning this relatively new subject and of making the transition to secondary school languages classes. By means of semi-structured interviews with the same sample of 18 pupils in Year 6 (age 10 or 11) and again in Year 7 (age 11 or 12), we learn that, whilst they enjoy languages at primary school, the enjoyment is all the greater in secondary school. As pupils look back from secondary school on the primary school experience, they identify that they want to feel challenged by more, harder work and to know that they are progressing and achieving. They want to be taught by teachers with MFL competence and appropriate training. Limited resources mean that MFL learning and teaching and transitional arrangements are not perfect. The insights which the pupils provide raise questions about how schools might be enabled by policy-makers to address the imperfections.

Syria: Laying the Foundations for a Credible and Sustainable Transition

Despite its extreme fragility, the ceasefire in place in Syria since February 2016 has afforded the opportunity to assess the options for a set of interim governance and transitional justice arrangements. These could establish the foundations for a transition following the conclusion of the Syrian civil war, regardless of its endpoint. Drawing on the specifics of the Syrian case and wider studies of interventions in, and transitions from, civil war, Scott Lucas, Christalla Yakinthou and Stefan Wolff consider the challenges of peace- and state-building, identifying both risks and mitigating actions. The article argues that risk mitigation is possible and should begin now. These efforts need to be supported by the international community in order to lay the foundations for a credible and sustainable post-civil war transition in Syria.

Articulation and Concordance: A Dialogue on Civil–Military Relations in Fiji

Articulation and Concordance: A Dialogue on Civil–Military Relations in Fiji

Is the European banking system robust? An evaluation through the lens of the ECB׳s Comprehensive Assessment

The results of the Comprehensive Assessment conducted by the ECB seem to attest the soundness of the European banking system since only 8 of 130 assessed banks had to raise capital (€6bn) when results were released. However, non-failing banks are not completely healthy. If the Comprehensive Assessment has been a very complex exercise, it has flaws that lead to middling conclusion on the soundness of the Eurozone banking system. Relying on stress tests׳ literature and an international comparison, we show that the assumptions used for the Asset Quality Review and stress tests lead to weak capital requirements. Using public bank-level data provided by the ECB and the EBA, we address some critics and highlight substantial capital shortfalls due to the transitional arrangements, an implementation of Basel III sovereign debt requirements instead of the zero risk weights applied in Europe and a stressed leverage ratio as a complementary indicator of banks soundness. Finally, we show that the low profitability, the massive dividend distribution and the incurred fines, give rise to concern on the ability of Eurozone banks to meet the incoming capital requirements.

Improving transitions from hospital to home.

❛The success of out-of-hospital care will partly be judged by its ability to offer older people a quality dimension to their life experience.❜ The imperative of making integrated care a reality is widely accepted. However, yet again, there is evidence that some patients do not transition between hospitals and community settings in an effective manner (Ungoed-Thomas, 2015), with some NHS Trusts experiencing delayed discharges in excess of 100 days. During the year ending March 2015, the University Hospital Southampton NHS Foundation Trust had 207 patients who waited 4 weeks or longer after having been declared fit for discharge (Ungoed-Thomas, 2015). While only a minority of patients experience long delays when medically fit for discharge, the need to improve transition arrangements was the basis of the recent National Institute for Health and Care Excellence (NICE) (2015) guidance. The NICE guideline rightly recommends that those with social care needs should have a care plan that addresses all aspects of their life. The care plan should include agreed preferences relating to their care needs and information exchange, so that care decisions are always person-centred and respectful, with the involvement of the individual and his/her family and/or carer as appropriate. Importantly, the care plan should incorporate agreed decisions relating to advance care plans and end-of-life care. Indeed, it is possible that the very old or very frail do not want to be admitted to hospital at all, having expressed their desire to have a dignified death in their current home. However, if a hospital admission is appropriate, the NICE guideline emphasises coordination between the hospital-based and community-based multidisciplinary teams so that there is a seamless approach across the services. Good record-keeping of assessments, treatments (prescribed and non-prescribed medications), and progress toward discharge are essential to ensure the timely transfer back to the patient’s current home or an alternative. NICE recommends the use of discharge protocols that include good information-sharing arrangements between health and social care providers, as well as between patients and their families. Knowing the preferred place of death of those at the end of life provides community nursing services the opportunity to enable a dignified death in the preferred setting, utilising generic and specialist palliative care services. The NICE guideline recommends that such patients should be followed up within 24 hours of hospital discharge so that ongoing care plans can be agreed and carers given practical support. Other hospital discharges will relate to ongoing care and re-enablement, and again, the importance of a follow up within 24–72 hours of discharge is emphasised so that the care delivery meets expectations and unnecessary readmissions are avoided. The increasing social isolation and loneliness of older people may exacerbate their vulnerability. Identifying local resources such as ‘Contact the Elderly’ (www.contact-the-elderly. org.uk/) for those aged over 75 years and living alone may be one strategy to reduce the experience of loneliness. It offers connectivity with a social group with whom to share conversations and develop new friendships. The success of out-of-hospital care will partly be judged by its ability to offer older people a quality dimension to their life experience, because no advanced society should condone life extension without a reasonable quality of life. Community nurses, as advocates of their clients, should be at the forefront of promoting a high quality of life for all those receiving nursing at home. BJCN

The 'Comitology Procedure' Under the European Parliament and Council Regulation (EU) No 182/2011 and its Importance for EU Banking Law

The present working paper provides an analysis of Regulation (EU) No 182/2011, of the European Parliament and of the Council laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, which repealed Council Decision 1999/468/EC of 28 June 1999, as in force after its amendment by Council Decision 2006/512/EC of 17 July 2006. It is structured in four Sections: (i) Section 1 examines the Comitology procedures within the system of law-making under the TFEU. (ii) A closer look into the general aspects of Regulation (EU) No 182/2011 and the 'Comitology Committees' provided therein is the subject of Section 2. (iii) In Section 3, the two main Comitology procedures laid down by the Regulation (the examination and the advisory procedures) are analysed. (iv) Finally, Section 4 presents the other provisions of the Regulation (namely those on immediately applicable implementing acts and on controls by the European Parliament and the Council, the transitional provisions and arrangements, as well as the review clause).

Influence of the Camp Changed to Increase the Advantages and Disadvantages of Logistics Enterprises and Countermeasure Analysis

The main function of the camp changed to increase is tax cut, which aims to avoid duplication of tax, reduce the tax risk and enterprise cost, which will have a profound significance to the long-term survival and development of logistics enterprises. But the logistics enterprises generally reflect that the deductible items are few, that the deductible conditions is tough, that the transport rate is too high, that the tax burden of enterprises increases significantly and so on. After all, the reform of the value-added tax rate is a necessary transitional arrangement. It needs to reform tax rates constantly and timely according to the needs. This paper focuses on the discussion of the influence of the camp changed to increase the advantages and disadvantages of logistics enterprises, and their countermeasures, so as to improve the level and quality of the tax cost control of logistics enterprises, and to promote the survival and development of enterprises.

What Went Wrong in South Sudan in December 2013

South Sudan, the world’s newest state, has been engulfed in renewed violent conflict since December 2013, with ongoing mediation efforts yet to provide a lasting truce. This briefing paper examines the underlying triggers of the mid-December 2013 conflict. It provides policy suggestions for sustainable peace in South Sudan, which include accountability for the crimes committed and monitoring of the proposed transitional power-sharing arrangement.