Are banks using leverage to target return on equity? Evidence from the US and the EU

2019 ◽  
Vol 72 (3) ◽  
pp. 863-892 ◽  
Author(s):  
Spyros Pagratis ◽  
Eleni Karakatsani ◽  
Helen Louri

Abstract We find evidence that banks actively use leverage to attain RoE targets and that leverage adjustments are primarily driven by capital distributions to shareholders. Using a large group of publicly-traded commercial banks from the US and the EU for the period 2001–2013, we demonstrate that this effect particularly holds for large banks before the crisis. Such behaviour may have led banks to enter the crisis with insufficient capital buffers to absorb losses, requiring unprecedented support by the public sector to maintain their solvency. Therefore, recent policies restricting the use of RoE as a metric in remuneration schemes and introducing constraints to capital distributions unless banks maintain certain buffers above the regulatory minimum, are in the right direction.

2015 ◽  
Vol 9 (2) ◽  
pp. 61-83
Author(s):  
Mireille Van Eechoud

The EU Directive on Re-use of Public Sector Information of 2013 (the PSI Directive) is a key instrument for open data policies at all levels of government in Member States. It sets out a general framework for the conditions governing the right to re-use information resources held by public sector bodies. It includes provisions on non-discrimination, transparent licensing and the like. However, what the PSI Directive does not do is give businesses, civil society or citizens an actual claim to access. Access is of course a prerequisite to (re)use. It is largely a matter for individual Member States to regulate what information is in the public record. This article explores what the options for the EC are to promote alignment of rights to information and re-use policy. It also flags a number of important data protection problems that have not been given serious enough consideration, but have the potential to paralyze open data policies. 


2020 ◽  
Vol 19 (6) ◽  
pp. 1101-1120
Author(s):  
O.V. Shimko

Subject. The article investigates key figures disclosed in consolidated cash flow statements of 25 leading publicly traded oil and gas companies from 2006 to 2018. Objectives. The focus is on determining the current level of values of the main components of consolidated statement of cash flows prepared by leading publicly traded oil and gas companies, identifying key trends within the studied period and factors that led to any transformation. Methods. The study draws on methods of comparative and financial-economic analysis, as well as generalization of materials of consolidated cash flow statements. Results. The comprehensive analysis of annual reports of 25 oil and gas companies enabled to determine changes in the key figures and their relation in the structure of consolidated cash flow statements in the public sector of the industry. It also established main factors that contributed to the changes. Conclusions. In the period under study, I revealed an increase in cash from operating activities; established that capital expenditures in the public sector of the industry show an overall upward trend and depend on the level of oil prices. The analysis demonstrated that even integrated companies’ upstream segment prevail in the capital expenditures structure. The study also unveiled an increase in dividend payments, which, most of the time, exceeded free cash flows thus increasing the debt burden.


1986 ◽  
Vol 15 (3) ◽  
pp. 273-292 ◽  
Author(s):  
N.J. Williams ◽  
J. Sewel ◽  
F. Twine

ABSTRACTIt has been argued that council house sales will contribute towards a more general process of residualization of public sector housing. Empirical evidence is presented in this context derived from surveys of purchasers and non-purchasers of council dwellings in the city of Aberdeen. This evidence confirms that purchasers and non-purchasers exhibit different socio-economic characteristics and after only four years of the Right to Buy legislation significant numbers of households in social classes I, II and III have left the public sector via the mechanism of sales. The small number of sales relative to the stock as a whole, however, has meant that the overall contribution of sales towards residualization has been small. This evidence from Aberdeen is compared to evidence from elsewhere and related to the varying pattern of sales across the country as a whole.


2008 ◽  
Vol 56 (4) ◽  
pp. 429-433 ◽  
Author(s):  
K. Harlander

Bioethanol is made from sugar- or starch-containing plants that are also used in food production. In the public perception this has led to an emotional resistance against biofuels, which in real terms is not substantiated. Generally biofuels are a political product. Triggered by the oil crisis in the 1970s, fuel ethanol programmes were first launched in Brazil and in the United States. Concerns regarding energy security and sustainability, together with the option of new markets for surplus agricultural production, have led to similar measures in the EU and other countries in recent years. Accordingly, the industry invested heavily in new bioethanol plants — especially in the US — and created an additional demand for maize and wheat, with some record-breaking prices noted in late 2007. A look back into statistics shows a drastic decline in real prices for decades, which have now simply returned to the level of 30 years ago. The grain used for bioethanol is currently only 1.6% in the EU and is therefore unlikely to be the real driver of price development. The European Commission concludes in its review of agricultural markets that Europe can do both: nutrition and biofuels.


2014 ◽  
Vol 4 (2) ◽  
pp. 99-118
Author(s):  
Sergejs Stacenko ◽  
Biruta Sloka

AbstractThe article will show major dimensions in the experience of EU Member States that could be shared with the Eastern Partnership (EaP) countries. The framework of the study is the EU concept of trade unions in social dialogue and social partnership in the public sector. This study outlines the concept of social dialogue as a core element of industrial relations and will focus on industrial relations specifically in the public sector. The authors have elaborated the approach to industrial relations and social dialogue taking into account comparative approach to definitions provided by international institutions such as ILO and OECD, as well as institutions in the EU and Latvia. Latvia is also a case study for Eastern Partnership countries as these countries and their trade unions are in a transition period from socialist structures to structures that possess liberal economies. Trade unions in these countries are members of the International Trade Union Confederation. The major transformation that trade unions underwent from being part of the socialist system and becoming an independent institution since Latvia regained independence in 1991 has been studied. The paper discusses the current developments related to the position of Latvian Free Trade Union Federation in the system of decision-making process related to the public administration management. Finally, the prospective role of trade unions in the EU and in Latvia is analysed and possible revitalisation of trade union is discussed. This approach could be applied to the Eastern Partners of the EU.


2002 ◽  
Vol 8 (4) ◽  
pp. 688-700
Author(s):  
Marie-Armelle Souriac

The right to strike has been recognised in France, even as a right guaranteed by the Constitution, since 1946. Strikes in the public sector are subject to specific legal regulation, including requirements for minimum notice periods and, in some circumstances, minimum service requirements. This contribution examines these special legal features of public-sector strikes. It is necessary to clarify the respective roles and responsibilities of the management of public enterprises (or administrative authorities) and the government. The article also considers alternative (and new) forms of collective action and agreements. In the future there may well be even greater scope for the regulation of strikes to be covered by collective bargaining.


Author(s):  
Ferran ARMENGOL FERRER

LABURPENA: Egonkortasuneko Mekanismo Europarrean (EME) baldintzapena nola aplikatzen den aztertuko dugu artikulu honetan, Europar Batasunaren esparruan aitortuta dauden oinarrizko eskubideen ikuspegitik. Horretarako, giza eskubideen alorrean nazioarteko hitzarmenak aplikatzearen alde egin duten jarrera doktrinalak hartu dira erreferentziatzat, Nazioarteko Diru Funtsak (NDF) eta nazioarteko beste finantza-erakunde batzuek garapen bidean diren herrialdeekiko operazioetan txertatu duten baldintzapenari muga jartzeko. Europar Batasunaren eremuan 2009-2010 urteetako zor publikoaren krisiari erantzuna emateko sortu diren organismoek eta, batez ere, EMEk (euro eremuan egonkortasuna ziurtatzeko organismoak,) ordea, egiturazko elementu gisa sartu dute baldintzapena haien operazioetan, NDFaren antzeko filosofia hartuta, hau da, zuhurtziaren bitartez lortu nahi dute hazkunde ekonomikoa, eta, horren ondorioz, oinarrizko eskubide batzuk ezin izan dira behar bezala gauzatu. Horrek mahai gainean jartzen du kontu bat, ea politika horiek bateragarri ote diren Europar Batasunaren helburu eta printzipioekin; hasiera batean «zuzenbidezko komunitatea» esamoldeaz definitu baitzuten EB, eta giza eskubideetan oinarrituta eraiki. Justizia Auzitegiak horri buruz idatzi zuen lehenengo epai —goiztiarrak— (Pringle epaiak), ordea, ez zuen zehaztu EMEren baldintzapenak Europar Batasunaren xede eta printzipioekin eta giza eskubideekiko errespetuarekin bat egiten ote duen. Hala ere, badirudi irizpide hori aldatzen ari dela, Ledra Advertising-en duela gutxi eman den epaiaren harira; izan ere, jabetzarako eskubideari dei egiteko atea ireki du, baldintzapena ezartzearen ondorioz eragindako kalteengatiko ordaina eskatzeari dagokionez. Hortaz, EME Europako Diru Funtsean eraldatuta bakarrik heldu ahalko zaie oinarrizko eskubideei, EME erkideko erakunde gisa eratzen bada, baldintzapenaren ondorio kaltegarriak geldiarazteari edo arintzeari begira. Are gehiago, Europako Diru Funtsean baldintzapena judizialki kontrolatzea erreferentea izan liteke nazioarteko beste finantza-erakunde batzuentzat. RESUMEN: El presente artículo analiza la aplicación de la condicionalidad en el Mecanismo Europeo de Estabilidad (MEDE) desde la perspectiva de los derechos fundamentales reconocidos en el ámbito de la Unión Europea. A tal efecto, se toman como referencia las posiciones doctrinales que han venido defendiendo la aplicación de los convenios internacionales en materia de derechos humanos como límite a la condicionalidad introducida por el FMI y otras instituciones financieras internacionales en sus operaciones con los países en desarrollo. Los organismos creados en el ámbito de la Unión Europea para dar respuesta a la crisis de la Deuda pública de 2009-10, y de modo singular el MEDE, organismo creado para garantizar la estabilidad de la zona euro, han introducido, sin embargo, la condicionalidad como un elemento estructural en sus operaciones, con una filosofía parecida a la del FMI, es decir, conseguir el crecimiento económico a partir de la austeridad, con lo que se ha visto perjudicado el ejercicio de diversos derechos fundamentales. Ello plantea la cuestión de la compatibilidad de tales políticas con los objetivos y principios de la Unión Europea, definida en su día como «Comunidad de Derecho» y fundada sobre los valores de los derechos humanos. La primera —y temprana— sentencia dictada al respecto por el Tribunal de Justicia (sentencia Pringle) dejó, sin embargo, en el aire la cuestión de la compatibilidad de la condicionalidad del MEDE con los objetivos y principios de la Unión Europea y el respeto de los derechos humanos. Parece, no obstante, que este criterio tiende a modificarse a partir del reciente fallo en Ledra Advertising, que ha abierto la puerta a invocar el derecho de propiedad para ser indemnizado por los daños causados por la aplicación de la condicionalidad. Con todo, será a partir de la transformación del MEDE en el Fondo Monetario Europeo, si éste se constituye como institución comunitaria, como puede hacerse efectiva la invocación de los derechos fundamentales para frenar o mitigar los efectos perjudiciales de la condicionalidad. Más aún, el control judicial de la condicionalidad en el FME podría servir como referente para otras instituciones financieras internacionales. ABSTRACT: This article analyses the application of conditionality within the European Stability Mechanism (ESM) from the perspective of the fundamental rights recognized within the EU. To this end, we take as a reference the doctrinal positions that have been defending the application of international conventions on human rights as a limit to the conditionality introduced by the IMF and another financial international institutions in their operations with developing countries. The public agencies created within the EU in order to meet the demands of the public debt crisis of 2009-10, and specifically the ESM, a body created to guarantee the Euro zone’s stability, have nonetheless introduced the conditionality as a structural element in their operations, with a philosophy comparable to that of the IMF, i.e. to achieve economic growth from austerity, thus impairing the exercise of several fundamental rights. That raises the question of compatibility of those policies with the objectives and principles of the EU, defined one day as a «community of law» and founded upon the values of fundamental rights. The first —and early— judgement delivered on this ground by the European Court of Justice (Pringle case) left nevertheless in the air the compatibility of the conditionality of ESM with the objectives and principles of the EU and with the respect to human rights. It seems however that this criteria tends to be modified by the recent judgment Ledra Advertising that opened the door to invoke the right to property in order to be compensated by damages caused as a consequence of conditionality. Even so, it will be after the transformation of the ESM into an European Monetary Fund, if this is constituted as a Community institution, that invoking fundamental rights shall be effective in order to stop or mitigate the adverse effects of conditionality. What is more, the judicial control over conditionality within the EMF might serve as a reference for other international financial institutions.


Author(s):  
Michael Schillig

The exercise of extensive powers by authorities during the recovery and resolution process may interfere with constitutionally protected fundamental rights of stakeholder in a multitude of ways. Particularly relevant are the right to conduct a business and the right to property under the EU Charter of fundamental rights, as well as the takings clause under the US constitution. A balance needs to be struck between the aims and objectives of bank resolution and the rights of investors and the requirements of due process. This is normally achieved through expedited and limited judicial review. This chapter assesses whether and to what extent the respective procedures are in line with constitutional and fundamental rights requirements.


Author(s):  
Markus Patberg

This chapter takes up the public narrative of ‘We, the multitude of Europe’, which suggests that the only hope for progressive change in the EU lies in a politics of disruption, and asks whether this idea can be defended based on a systematic model. To that end, it resorts to the political theory of destituent power, according to which opposition to or withdrawal from public authority can function as a legitimate trigger for constitutional change. Distinguishing between anti-juridical and juridical conceptions of destituent power, the chapter discusses to what extent the disruptive political strategies put forward by protest movements in the EU can be regarded as justifiable. Focusing on the juridical strand as the more plausible one, it argues that ideas of destituent power as ‘state civil disobedience’ run into a problem of authorization. By contrast, popular sovereignty-based approaches illuminate a neglected dimension of constituent power: the right to dismantle public authorities without the intention to create new ones. While such a model of destituent power in part captures the actions and demands of EU protest movements, it can only complement, not replace, the constructive side of constituent power.


Author(s):  
Dries Verlet ◽  
Carl Devos

Although policy evaluation has always been important, today there is a rising attention for policy evaluation in the public sector. In order to provide a solid base for the so-called evidence-based policy, valid en reliable data are needed to depict the performance of organisations within the public sector. Without a solid empirical base, one needs to be very careful with data mining in the public sector. When measuring performance, several unintended and negative effects can occur. In this chapter, the authors focus on a few common pitfalls that occur when measuring performance in the public sector. They also discuss possible strategies to prevent them by setting up and adjusting the right measurement systems for performance in the public sector. Data mining is about knowledge discovery. The question is: what do we want to know? What are the consequences of asking that question?


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