Characteristics and development of corporate and sovereign CDS

2014 ◽  
Vol 15 (5) ◽  
pp. 482-509 ◽  
Author(s):  
Christina E. Bannier ◽  
Thomas Heidorn ◽  
Heinz-Dieter Vogel
Keyword(s):  
Debt Crisis ◽  
Research Question ◽  
Subprime Crisis ◽  
Content Type ◽  
Main Research ◽  
Risk Hedging ◽  
Market Participants ◽  
Regulatory Changes ◽  
Broad Variety ◽  
European Debt Crisis

Purpose – This paper aims to provide an overview of the market for corporate and sovereign credit default swaps (CDS), with particular focus on Europe. It studies whether the subprime crisis of 2007/2008 and, particularly, the European debt crisis 2009/2010 led to a differential development on corporate and sovereign CDS markets and investigates the primary use (speculative risk-trading or risk-hedging) of the two markets in recent years. Design/methodology/approach – The authors use aggregate market data on the size of the respective markets and on the structure of market participants and their changes over time to assess the main research question. They enhance existing data from public sources such as the Bank for International Settlements and Depository Trust and Clearing Corporation with their own statistics on European sovereign CDS and combine their conclusions with observations regarding standardisation efforts and regulatory changes in the CDS market. Findings – The authors show that after the subprime crisis 2007/2008 and the European debt crisis 2009/2010, the corporate and sovereign CDS markets developed quite differently. They provide evidence that since mid-2010, market participants started to use the sovereign CDS market more strongly for speculative purposes than for risk-hedging. This shows both in the shift of risk-quality of sovereign CDS contracts and in the changing structure of market participants. The ongoing standardisation and regulation in the CDS market – leading to further increases in transparency and reductions in transaction costs – may be expected to trigger a similar change also for corporate CDS. Originality/value – Based on a broad variety of market infrastructure data, the authors show a diverging development of corporate and sovereign CDS markets in Europe in recent years. Particularly the sovereign CDS market appears to have shifted from a risk-hedging instrument to being used more strongly for speculative risk-trading. The authors combine their findings with recent regulatory action and market standardisation schemes and draw conclusions for the future development of CDS markets.

Stakeholders and opportunities of debt settlement as a values-based banking activity in Hungary

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zsuzsanna Győri ◽  
Borbála Benedek
Keyword(s):  
Research Question ◽  
Good Practice ◽  
Banking System ◽  
Financial Inclusion ◽  
Stressful Situation ◽  
Content Type ◽  
Main Research ◽  
The Poor ◽  
Lessons Learnt

Purpose The purpose of this paper is to discuss the stakeholders of debt settlement programmes in general and some lessons learnt from the most significant debt settlement programmes of recent years in Hungary. The study also presents a planned debt settlement programme in Hungary. The paper explores and details behaviours and motivations of different stakeholders in debt settlement in general and also with reference to a specific case study. As for its main research question, the paper seeks to identify the preconditions of a successful debt settlement programme with specially emphasis on the poor. Design/methodology/approach Data from semi-structured in-depth expert interviews, documents and former research papers were collected for identifying previous Hungarian debt settlement programmes and potential lessons learnt. After a general discussion, based on primary and secondary sources, a case study is presented to obtain a more comprehensive understanding of opportunities and challenges of debt settlement. Findings Six preconditions of successful debt settlement targeting the poor are identified. In the case study, the existence and relevance of these preconditions are tested: the main finding is that they all are important for solving the situations, so a partial solution is not sufficient. In the scope of the case study, more precisely within the planned innovative banking solution, the motivations of the bank and the coordinator NGO are identified. On the part of the bank, motivations for solving social problems (both as far as business and moral issues are concerned) are relevant, while – as for the other party – the situation of the debtor is important to understand so that opportunities of cooperation can be identified. In addition, as other stakeholders also influence the potentials of the programme, their cooperative attitude is also needed. Research limitations/implications Limitations consist in generalisation: the study presents some cases from one single country and finally it focuses only on one specific case in one specific social and economic context in Hungary. Having recognized this risk, the author opted for basing research questions on theory, documented the process in detail, and also used triangulation through applying a multiple data collection (interview, content analysis, literature review) method. Practical implications Besides presenting an academic understanding of the phenomena, the goal of the study is to contextualize and interpret the case, to help the realization of currently frozen initiatives and to promote similar future ones. Social implications Indebtedness is a stressful situation affecting families, smaller communities and broader society as well. The planned cooperation of BAGázs and MagNet tries to help people excluded from the banking system. So that a deeper debt trap can be avoided, the goal of this programme is to purchase, partially discharge and reschedule pre-accumulated debts of carefully selected people who have regular income and are willing to undertake bearable repayment. The idea is very innovative with literally no good practice to follow. The research seeks to clarify the pitfalls and opportunities to help the realization of the project and similar future ones. Originality/value A certain form of values-based banking concerns the financial inclusion of the poor, e.g. debt settlement. Nevertheless, over-indebtedness and the settlement of existing debts as well as the relevance of such issues to the financial inclusion are not emphasized enough in the literature or in practice. Besides presenting an academic understanding of the phenomena, the goal of the study is to contextualize and interpret the case, to help the realization of currently frozen initiatives and to promote similar future ones.

Assessing sovereign risk: the case of rich countries

2014 ◽  
Vol 6 (3) ◽  
pp. 212-225 ◽  
Author(s):  
Norbert Gaillard
Keyword(s):  
Sovereign Debt ◽  
Credit Rating ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
Bond Yields ◽  
Content Type ◽  
The Great Recession ◽  
Market Participants ◽  
Investment Grade ◽  
Rich Countries

Purpose – This paper aims to shed new light on the inability of credit rating agencies (CRAs) to forecast the recent defaults and so-called quasi-defaults of rich countries. It also describes how Moody’s sovereign rating methodology has been modified – and could be further improved – to solve this problem. Design/methodology/approach – After converting bond yields into yield-implied ratings, accuracy ratios are computed to compare the respective performances of CRAs and market participants. Then Iceland’s and Greece’s ratings at the beginning of the Great Recession are estimated while accounting for the parameters included in the new methodology implemented by Moody’s in 2013. Findings – Market participants outperformed Moody’s and Standard & Poor’s in terms of anticipating the sovereign debt crisis that hit several European countries starting in 2008. However, the new methodology implemented by Moody’s should lead to more conservative and accurate sovereign ratings. Originality/value – The chronic inability of CRAs to anticipate public debt crises in rich countries is dangerous because the countries affected – which are generally rated in the investment-grade category – are substantially downgraded, amplifying the sovereign debt crisis. This study is the first to demonstrate that Moody’s has learned from its recent failures. In addition, it recommends ways to detect serious threats to the creditworthiness of high-income countries.

The use of social media by South African organisations

2018 ◽  
Vol 15 (2) ◽  
pp. 198-210 ◽  
Author(s):  
Nomusa Nomhle Dlamini ◽  
Kevin Johnston
Keyword(s):  
South Africa ◽  
Social Media ◽  
South African ◽  
Quantitative Research ◽  
Brand Management ◽  
Research Question ◽  
Management Tool ◽  
Content Type ◽  
Quantitative Research Methods ◽  
Main Research

Purpose The purpose of this paper is to present how organisations in South Africa are using social media. The paper further explores the value of social media to South African organisations and if it is important for an organisation to have a social media presence. Design/methodology/approach The study used quantitative research methods to answer the main research question and sub-questions. Findings The data collected revealed that most organisations in South Africa are using social media for free advertising, CRM and marketing. The popular social media sites used by these organisations are Facebook and Twitter, with LinkedIn increasing in popularity. The data further revealed that social media is important in organisations for relationship building, contact keeping advertising, marketing, attracting customers, brand management and information gathering. Research limitations/implications The role of social media is changing, it was initially a marketing tool, but the findings revealed that majority of organisations are using social media for free advertising, CRM and marketing. Social media is an easy CRM tool that offers effective and efficient capabilities. Practical implications It is important to use integrate social media with the organisations processes to market and advertise new products, it is an instant and cost-saving way of communicating with customers, and helps in reaching and attracting new customers. Social implications Social media is important for keeping contact and building relationships with customers, advertising and marketing, way to attract customers, brand management tool and gathering information. Originality/value The study provides guidance to how organisation can use social media, identifying the value of using social media and highlighting the importance of social media in an organisation in the South African context.

Analyst Information Processing, Financial Regulation, and Academic Research

2009 ◽  
Vol 84 (4) ◽  
pp. 1073-1083 ◽  
Author(s):  
Mark T. Bradshaw
Keyword(s):  
Information Processing ◽  
Financial Regulation ◽  
Conflicts Of Interest ◽  
Research Question ◽  
Academic Research ◽  
Earnings Forecasts ◽  
Stock Recommendations ◽  
Market Participants ◽  
Regulatory Changes ◽  
Similarities And Differences

ABSTRACT: Changes in regulations governing capital markets always provide a rich setting for archival researchers to examine how such changes affect the behavior of market participants. Barniv et al. (2009; hereafter, BHMT) and Chen and Chen (2009; hereafter CC) examine the impacts of recently enacted regulations aimed at curbing perceived abused by sell-side analysts. There were no less than six significant regulations issued between 2000 and 2003 that affected the activities of analysts. BHMT and CC emphasize different regulations, but both predict that analysts' recommendation will be less biased as a result of the collective regulatory changes. The evidence in both studies is strong and convincing that the association between analysts' earnings forecasts and stock recommendations has changed, consistent with analysts' personal conflicts of interest having less impact on their analyses. However, the attribution of what regulation, if any, effected this change is less clear. Collectively, the similarities and differences in the studies provide a nice setting to understand how different authors approach the same research question.

Listening to bank customers: the meaning of trust

2020 ◽  
Vol 12 (3) ◽  
pp. 355-370
Author(s):  
Aviv Kidron ◽  
Yvonne Kreis
Keyword(s):  
Design Methodology ◽  
Research Question ◽  
Relational Exchange ◽  
Exchange Relationship ◽  
Banking Services ◽  
Content Type ◽  
Main Research ◽  
Trust Beliefs ◽  
Structural Assurance ◽  
Customer Trust

Purpose In banking services, trust is crucial to any relational exchange situation. Using the example of Israeli banks, the main research question driving this paper is – What are the reasons for trusting or not trusting banks? To date, few studies have examined the reasons of ongoing low trust during so-called “normal times”. Design/methodology/approach This paper is unique in approaching the study of customer trust in banks through qualitative analysis by using the interdisciplinary trust approach. Findings The results offer important insights regarding situational normality, structural assurance and customers’ tendencies to trust the bank. The insights about trust derived from this complicated relationship between customers and banks reveals that customers grow dissatisfied and their level of trust consequently decreases when they perceive an imbalance in the exchange relationship with their bank. Originality/value This study provides novel insights into hidden attitudes and feelings behind each component of trust beliefs in the bank–customer trust relationship through interdisciplinary trust perspective.

Gauging the value of MOOCs

2017 ◽  
Vol 7 (2) ◽  
pp. 141-154 ◽  
Author(s):  
Joseph A. Rosendale
Keyword(s):  
Higher Education ◽  
Labor Force ◽  
Quantitative Methods ◽  
Online Survey ◽  
Research Question ◽  
Job Applicants ◽  
Employment Decisions ◽  
Content Type ◽  
Main Research ◽  
Hiring Managers

Purpose The purpose of this paper is to examine hiring managers’ perceptions of massive open online courses (MOOCs) as compared to traditional degree-conferred forms of higher education in relation to hiring and employment decisions. Design/methodology/approach A literature review is presented along with a triangulated theoretical framework. Using online survey data, quantitative methods reveal findings related to the main research question: what are hiring managers’ attitudes toward MOOCs as a form of post-secondary education? Findings Analysis of the data reveals that hiring managers have a clear preference for traditionally educated job applicants but employer demographics, apart from organizational procedures, do not significantly impact their overall perceptions of MOOCs’ value. Research limitations/implications Most of the research is based on anecdotal research. Very little has been written on how to fix this problem. Practical implications This paper illustrates implications of MOOCs’ future development and implementation both in higher education and in the labor-force. The main implication is that MOOCs represent neither a panacea to the issues facing higher education and the American labor-force nor an alarming threat to stakeholders appreciative of the status quo. Originality/value This paper fills a current research gap as evidenced in the literature; employers’ perceptions of MOOC-educated job applicants when compared to traditionally educated/degree-conferred job applicants. By determining the value of MOOCs as employers pragmatically view them, stakeholder groups can better determine their future positioning of MOOC-related resources in addition to time and money allocated in MOOCs’ direction.

Impact of accounting software utilization on students' knowledge acquisition

2014 ◽  
Vol 10 (1) ◽  
pp. 22-48 ◽  
Author(s):  
Emilio Boulianne
Keyword(s):  
Knowledge Acquisition ◽  
Curriculum Design ◽  
Course Design ◽  
Business Students ◽  
Research Question ◽  
Survey Method ◽  
Content Type ◽  
Main Research ◽  
Accounting Software ◽  
The Impact

Purpose – This study investigates the impact that software utilization may have on students' knowledge acquisition of the accounting cycle. Differences in knowledge acquisition are examined between three groups of students: those who completed an accounting case manually using the traditional pencil and paper approach, using software, and first manually and then using software. The main research question is: “To what extent does using computers to study the accounting cycle lead to better knowledge acquisition?” This paper aims to inform changes in accounting education. Design/methodology/approach – The survey method was employed to collect information from accounting students in a Canadian business school. A total of 1,053 usable questionnaires were returned. Declarative knowledge and procedural knowledge are the theoretical underpinnings. Findings – The results indicate that students who first completed the case manually and then completed the same case using accounting software experienced the best knowledge acquisition. This suggests that the best manner for students to acquire concrete knowledge of the accounting cycle is by completing cases using both methods. The results also indicate that students who completed the case using only the software experienced better knowledge acquisition than did students who completed the case only manually. This suggests that software can be effectively utilized and integrated in class to improve knowledge acquisition of accounting information systems. Originality/value – Little investigation has been performed on the usefulness and impact accounting software utilization may have on students' level of learning. The findings may benefit students and faculty members by helping in curriculum design changes, course design, and computer implementation decisions. The findings of this study have the potential to make a difference in the way that educators teach and business students learn. Business education may be improved by the judicious use of software in the classroom.

Impact of regulatory changes on government bond market liquidity

2017 ◽  
Vol 25 (3) ◽  
pp. 307-317 ◽  
Author(s):  
Hans Blommestein
Keyword(s):  
Market Liquidity ◽  
Adverse Impact ◽  
Bond Markets ◽  
Government Bond ◽  
Content Type ◽  
Market Participants ◽  
Regulatory Changes ◽  
Survey Results ◽  
Government Bond Markets ◽  
The Impact

Purpose The purpose of this study is to assess the seriousness of the impact of new regulatory factors on liquidity in government bond markets since the onset of the global financial crisis. Design/methodology/approach Questionnaires were circulated for examining the adverse impact of regulatory changes on liquidity. New evidence was presented about the adverse impact of the process of regulatory changes on market liquidity. Findings The paper presents new survey results on the adverse liquidity impact of regulations on market liquidity. Responses show that government issuers differ in their assessment on the severity of the impact of the various regulations. Determining this longer-term impact is quite complex because measures of liquidity may not only reflect the impact of regulatory changes, but also the responses by policymakers and market participants (to these regulatory changes), covering in particular the following: market transparency, trading practices, market infrastructure and other policies to promote liquidity, including by reducing unconventional monetary policy measures. Also, market dynamics may have become more complex due to responses by market participants. Practical implications Debt managers need to take into account regulations with a significant adverse influence on both market liquidity and the price discovery process. As liquidity in government bond markets also has a direct impact on funding possibilities and financing costs, funding liquidity may also be affected, especially during periods with market stress. This means that the funding strategy may need to be adapted. Originality/value The paper presents new survey results on the impact of new regulations on market liquidity. This assessment is quite complex because measures of longer-term liquidity may reflect the impact of regulatory changes and the responses by policymakers and market participants to these changes.

Method for performance measurement of car companies from a stability-value leverage perspective

2019 ◽  
Vol 10 (1) ◽  
pp. 411-434 ◽  
Author(s):  
Wouter Beelaerts van Blokland ◽  
Sebastiaan van de Koppel ◽  
Gabriel Lodewijks ◽  
Wouter Breen
Keyword(s):  
Performance Measurement ◽  
Lean Manufacturing ◽  
Business Performance ◽  
Research Question ◽  
Company Performance ◽  
Maturity Model ◽  
Content Type ◽  
Main Research ◽  
Performance Measurement Systems ◽  
Level I

Purpose Today, most of the car manufacturers world-wide have embraced the principles of lean manufacturing on strategic and operational level. On strategic level car companies like Toyota (Womack et al., 1990) shifted 63 per cent of the value of the car towards the first, second and third tier suppliers for the co-production and co-development of cars as an effect of lean implementation. However, lean implementation was also followed by for instance Ford and GM in the USA, the latter company faced a sudden disruption in 2009 due to the break-out of the financial crisis in 2008, while Ford survived. Could this be foreseen? The exclusive use of (classic) financial performance indicators may give a false image of a company’s current and future performance. There is a need for a model to identify “the stars and the laggards’ regarding car companies by taking into account non-financial and intangible dimensions as advocated by Neely et al. (2003) regarding the third generation of business performance measurement systems. The purpose of this paper is therefor to propose a method to measure and benchmark car company performance which includes the non-financial R&D dimension as well as supply chain, value creating and employee dimensions. These dimensions are present in the value leverage model (van Blokland et al., 2012a, 2012b) which can serve as a basis for this method. The aim is to contribute to the third generation business performance measurement systems by further development of the value leverage model towards a maturity model for benchmarking car company performance. The proposed method can provide a big picture and give insight regarding company performance and direction of the performance. Design/methodology/approach Value leverage can be measured by a correlation analysis regarding three dimensions, namely, supply chain, R&D and value creation, all relative to the employee or capita which results in the average value leverage (AVL) factor. This AVL factor can be used to compose a combined relative and absolute ranking. The score regarding the AVL results in a relative ranking expressing the level of stability regarding the car companies value chain and system. For the absolute ranking the car companies receive per variable parameter a score according to their absolute performance relative to the other car companies. The relative and absolute ranking are presented on the vertical and horizontal axes forming a matrix. The matrix is the basis for the stability-value leverage maturity model for measuring and benchmarking company performance. With the proposed method, the following main research question can be answered: “How can company performance be measured and benchmarked from a stability-value leverage perspective?”. Findings With the proposed method, stability-value leverage performance can be measured. The relative ranking on the vertical axis and the absolute ranking form together a matrix which is presented by a scatterplot. A matrix with four maturity levels emerged from the analysis by introducing the average score of all the car companies together in the data set crossing the matrix vertical and horizontal. The four levels are as follows: Level I, low stability – low value leverage; Level II, low stability – high value leverage; Level III, high stability – low value leverage; and Level IV, high stability – high value leverage. Stability-value leverage performance of car companies can be measured over time which makes it possible to observe to which direction the car company migrates for instance from Level I to Level III, before and after the financial crises in 2008. The car companies BMW, Daimler, Audi, Ford and Honda are the best performing companies in stability-value leverage over the period 2000-2014, as they are situated at Level IV. With the findings, the main research question can be answered. The value leverage indicators can be used for measuring and benchmarking company performance regarding four maturity levels of stability and value leverage. The direction of performance can be observed as well. Research/limitations/implications This research is limited to the car industry. Further research is devised to test the indicators for instance on the truck manufacturing industry. Further research towards new variables is part of the ongoing research. Practical/implications With the value leverage maturity model, it is possible to inform stakeholders about stability, value leverage and value creation capability of car companies. Weak performing companies can be identified in an early stage with this method to anticipate for instance on possible discontinuation of a car company effecting in merger an acquisition processes. Social/implications With the method stakeholders such as employees, users of cars and investors can be informed about how and why car companies perform in an unstable or stable manner. Originality/value This research towards ranking and classification of car companies aligns with theories regarding lean manufacturing and maturity models, as these models are used to compare companies on their level of perfection or excellence.

scholarly journals Assessing large-scale digitization using Web analytics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Emily Lapworth
Keyword(s):  
Large Scale ◽  
Research Question ◽  
Web Analytics ◽  
Digital Collections ◽  
Content Type ◽  
Main Research ◽  
Item Level ◽  
Digital Collection ◽  
One Year ◽  
The Impact

Purpose The purpose of this study is to assess the use of digital collections created via the large-scale digitization of archival collections. The large-scale digitization method specifically examined is the reuse of archival description from finding aids to create digital collections that consist mainly of compound digital objects, equivalent to a folder of items, minimally described at the aggregate level. This paper compares Web analytics data for two large-scale digital collections and one digital collection with rich, item-level description. Design/methodology/approach This study analyzed one year of Web analytics for three digital collections. The main research question of this study is: Are digital collections of minimally described compound objects used less than digital collections of richly described single objects? Findings This study found that the large-scale digital collections analyzed received less use than the traditional item-level collection, when examined at the item level. At the object level, the large-scale collections did not always receive less use than the traditional item-level collection. Research limitations/implications This study is limited to three different digital collections from one institution. Web analytics also represent a limited interpretation of “use.” Practical implications This study presents a method for other institutions to assess their own large-scale digitization efforts and contributes to the profession’s understanding of the impact of large-scale digitization. Originality/value This paper is unique because it uses Web analytics to compare the use of large-scale digital collections to the use of traditional boutique digital collections.

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