Coal mine closure processes are being carried out in the European Union due to the current energy transition. The use of coal-fired power plants has been significantly reduced in recent years. Because of the significant financial outlays, processes of rationalization and minimization of the mine liquidation cost should be carried out. In this paper, a statistical analysis of the liquidation processes in hard coal mines in Poland was carried out. A new tool was developed in order to optimize the mine liquidation costs. The mine liquidation process can be divided into ten different processes, which have been analyzed in detail in this research work. The method of the assessment of the amount of estimated liquidation costs described is based on the analysis of the total liquidation cost. The presented method of signaling deviations of the costs of the liquidation of the mining plant from the average value is a useful tool in the process approach to the issues connected with the restructuring of post-industrial property. The presented cost assessment procedure may facilitate the monitoring of conducted activities in terms of rationalization and minimization of the costs incurred. Finally, the proposed method for assessing the cost of mine liquidation is understandable, simple, and easy to use for applications in preliminary design works and on-going engineering works.
PurposeThrough portfolio diversification, the author identifies the risk sharing deposit contract in a three-period model that maximizes the ex ante expected utility of depositors.Design/methodology/approachIn this paper, the author extends the study by Allen and Gale (1998) by adding a long-term riskless investment opportunity to the original portfolio of a short-term liquid asset and a long-term risky illiquid asset.FindingsUnlike Allen and Gale, there are no information-based bank runs in equilibrium. In addition, the model can improve consumers' welfare over the Allen and Gale model. The author also shows that the bank will choose to liquidate the cheaper investments, in terms of the gain-loss ratios for the two types of existing long-term assets, when there is liquidity shortage in some cases. Such a policy reduces the liquidation cost and enables the bank to meet the outstanding liability to depositors without large liquidation losses.Originality/valueThe author believe that the reader would be interested in this article because it is relevant to real world where depositors rush to withdraw their deposits from a bank if there is negative information about future prospect of the bank asset portfolio and bank investment. Economists and financial analysts need to determine the suitable mechanism to improve the stability of the bank and the depositor welfare.
Few derived versions based on the classic bank run model have taken into account the framing effect of general lenders. The purpose of this study is to revisit the issue and discuss a model of bank run equilibrium combined with biased risk preference, which is applied to analyze how portfolio allocation and liquidity buffer in commercial banks are affected by liquidation cost and the reference point. The results suggest the condition on which the liquidity buffer of a particular bank should provide. Liquidation cost is positively correlated with the lower bound of liquidity buffer. The effect of the reference point on liquidity buffer partially depends on the slope of yield curve term structure. Higher reference point could typically cause a lower portion of long-term investment.
AbstractThis study considers how to implement an efficient allocation of a financial intermediation model, including liquidation costs. The main result shows that there is a mechanism such that, for any liquidation cost, an efficient allocation is implementable in strictly dominant strategies. There is no need for third-party assistance, such as deposit insurance. In addition, the mechanism is tolerant of a small, unexpected shock caused by premature withdrawals.
A New Method to Analyze the Mine Liquidation Costs in Poland