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on Regulation |
| By: | Dimitrios Tsomocos; Charles Goodhart; M.U. Peiris; Alexandros Vardoulakis |
| Abstract: | Until recently, financial services regulation remained largely segmented along national lines. The integration of financial markets, however, calls for a systematic and coherent approach to regulation. This paper studies the effect of market based regulation on the proper functioning of the interbank market. Specifically, we argue that restrictions on the payout of dividends by banks can reduce their expected default on (interbank) loans, stimulate trade in this market and improve the welfare of consumers. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp648&r=reg |
| By: | Köhler, Matthias |
| Abstract: | This paper gives an overview over corporate governance and banking regulation in Germany. Particular attention is put on legal and regulatory changes that were made in response to the financial market crisis. The paper shows that the changes mainly focus on the remuneration of managers and on further professionalizing the supervisory board. Problematic is that several laws that were enacted in the past years to improve corporate governance focus on listed firms. Furthermore, some of the recommendations and suggestions made to improve corporate governance in Germany are not legally binding even for stock corporations. Recent empirical evidence, moreover, suggests that bank shareholders pushed for greater risk-taking and not managers. This contrast with public view that the bank managers are pushed by aggressive remunerations schemes to increase risk-taking and indicates that the recent legal and regulatory changes fail to remove all weaknesses of the German corporate governance system. -- |
| Keywords: | Corporate governance,banks,regulation,remuneration schemes,supervisory board |
| JEL: | G21 G34 G38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10002&r=reg |
| By: | Alberto F. Alesina; Yann Algan; Pierre Cahuc; Paola Giuliano |
| Abstract: | Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots. |
| JEL: | J2 K2 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15747&r=reg |
| By: | Siregar, Reza Yamora; Lim, CS Vincent |
| Abstract: | Whenever a financial crisis occurs, threatening a possible financial meltdown, central banks have to be at the forefront in combating, neutralizing the crisis and restoring financial stability and economic growth. In this regards, the present sub-prime crisis which originated from the US highlights a few key issues for the Southeast Asian Central banks (SEACEN). This paper reviews the policy responses to the crisis which include exit policy strategies from stimulus monetary packages. To strengthen the soundness of the financial system, going forward, the paper also highlights counter-cyclical and macro-prudential regulations that central banks may want to actively look into. These include cross-border policy cooperation and coordination, particularly in the form of the college of supervisors. |
| Keywords: | - SEACEN; -Central Banks; - Financial Stability; - Prudential Regulation; -Supervision. |
| JEL: | E58 E44 E41 |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20846&r=reg |
| By: | Maria De Paola; Vincenzo Scoppa; Mariatiziana Falcone (Dipartimento di Economia e Statistica, Università della Calabria) |
| Abstract: | Using data on road accidents, traffic fatalities and driving offences taking place in Italy over the period 2001-2005, we estimate the effects of the introduction on July 2003 of a penalty point system for driving offences. To identify the causal effect of the penalty point system on road safety we use a Regression Discontinuity Design. It emerges that, controlling for weather conditions, police patrols, speed cameras, gasoline price, the introduction of the penalty point system has led to a reduction of about 10% of road accidents and of about 25% of traffic fatalities. These findings are robust to different specifications of the model and different time windows. Moreover, it emerges that the driving offences for which the introduction of the new regime has determined a sharp change in the sanction scheme have reacted more than offences for which the change was less relevant. |
| Keywords: | Law Enforcement, Deterrence, Safety and Accidents, Panel Estimations |
| JEL: | K32 K42 R41 R48 C23 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201004&r=reg |
| By: | Céline CARRERE (Centre d'Etudes et de Recherches sur le Développement International); Jaime MELO DE (Université Genève) |
| Abstract: | Alternative approaches to estimating the effects of non-tariff measures (NTMs) on trade flows are discussed and evaluated critically. Recent econometric studies point to three results: (i) NTM restrictiveness measures based on an aggregate of ‘core' NTMs are more restrictive than existing tariffs and, because of export composition towards agricultural products, in the aggregate, these ‘core' NTMs limit market-access most for low-income countries; (ii) Proxies for individual NTMs, have a negative effect on the volume of bilateral trade for the detailed product under scrutiny; (iii) harmonization of standards is trade enhancing. Case studies confirm several of these patterns, and also that perceived severity of NTMs varies across products and across destinations for a given product. Across broadly-defined imports at the section level, NTMs are more restrictive than the corresponding tariffs with two-thirds of the AVE estimates in the 25%-50% range. Technical regulations and non-automatic licensing are the most used single-NTM measures and the restrictiveness of technical regulations increases with income per capita. |
| Keywords: | Export diversification, Latin America, international trade |
| JEL: | O11 F1 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1130&r=reg |
| By: | Julien Chevallier (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre) |
| Abstract: | The European Union Emissions Trading Scheme (EU ETS) is the largest emissions trading scheme to date. This article summarizes the principle elements behind the trading system, and details the carbon price dynamics during Phase II (2008-2012), along with an analysis of traded volumes. The main findings emphasize that the EU ETS is a rapidly growing market, which yields to innovative learning process for all participants involved: policy makers, industrial operators, and financial analysts. Besides, these results shed some light on the usefulness of credit project mechanisms, which may result in the medium-term in integrated ‘world' carbon markets between various regional and/or national ETS. |
| Keywords: | EU ETS; Carbon Price; Phase II; CER ; Spot Price ; Futures Price ; Options Price |
| Date: | 2010–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00459140_v1&r=reg |
| By: | Elisa Lanzi (School of Advanced Studies in Venice (SSAV) and Fondazione Eni Enrico Mattei (FEEM)); Ian Sue Wing (Dept. of Geography & Environment, Boston University and Joint Program on the Science & Policy of Global Change, MIT) |
| Abstract: | This paper argues for introducing the role of capital malleability into the analysis of environmental policies. The issue is explored by means of a theoretical model, a numerical analysis and a computable general equilibrium (CGE) model. Considering the three approaches together is fundamental in obtaining theory-compatible policy-relevant results. The model outcomes reveal differences between results under separate assumptions regarding the malleability of capital. When capital is imperfectly malleable a carbon policy is less effective than under the assumption of perfect malleability of capital. Therefore, it is important that, especially for the analysis of short-term environmental regulations, the issue of capital malleability is taken into consideration. |
| Keywords: | General Equilibrium, CGE Models, Climate Change Policy |
| JEL: | C68 D58 H22 Q43 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.19&r=reg |
| By: | Julien Chevallier (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre) |
| Abstract: | The Emissions Trading Scheme (ETS) constrains industrial polluters to buy/sell CO2 allowances depending on a regional depolluting objective of -8% of CO2 emissions by 2012 compared to 1990 levels. Companies may also buy carbon offsets from developing countries, funding emissions cuts there instead, under a Kyoto Protocol Clean Development Mechanism (CDM). This article critically analyzes the price relationships in the EU emissions trading system. The United Nations Framework Convention on Climate Change (UNFCCC) delivers credits that may be used by European companies for their compliance needs. Certified Emissions Reductions (CERs) from CDM projects are credits flowing into the global compliance market generated through emission reductions. EUAs (EU Allowances) are the tradable unit under the EU ETS. Besides, the EU Linking Directive allows the import for compliance into the EU ETS up to 13.4% of CERs on average. This article details the idiosyncratic risks affecting each emissions market, be it in terms of regulatory uncertainty, economic activity, industrial structure, or the impact of other energy markets. Besides, based on a careful analysis of the EUA and CER price paths, we assess common risk factors by focusing more particularly on the role played by the CER import limit within the ETS. |
| Keywords: | Kyoto Protocol; Clean Development Mechanism; EU Emissions Trading Scheme; Greenhouse Gases Reductions; Emissions Markets; CDM; EU ETS |
| Date: | 2010–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00458728_v1&r=reg |
| By: | Masako Ikefuji (nstitute of Social and Economic Research Osaka University); Jun-ichi Itaya (Hokkaido University); Makoto Okamura (Hiroshima University) |
| Abstract: | This paper explores optimal environmental tax policy under which duopoly firms strategically choose the location of their plants in a simple three-stage game. We examine how the relationship between the optimal emission tax and the choice of location of duopoly firms affects the welfare of the home country. We characterize the relationship between the optimal emission tax and the fixed cost, depending on the degree of environmental damage from production. Finally, we show the existence of asymmetric equilibrium in which either firm chooses relocation of its plant even if the duopoly firms are identical ex ante. |
| Keywords: | Environmental policy, Relocation, Welfare |
| JEL: | H23 L13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.6&r=reg |
| By: | Rogge, Karoline S.; Linden, Christian |
| Abstract: | In this paper, we conduct a cross-country quantitative analysis of the replacement incentives generated by the EU ETS for the power sector in 2008-12. In order to do so, the allocation rules of the Member States are applied to concrete reference power plants for three different fuel types (lignite, hard coal and gas). Based on these calculations, we compare installation-specific replacement in-centives across the Member States. Our analysis shows that replacement incentives vary significantly across Member States and typically deviate from the incentives provided in the reference case of full auctioning. Furthermore, the EU ETS allocation rules lead to perverse incentives in approximately 30% of the possible replacement options. Only 5 MS do not provide any perverse incentives. Finally, we explore the link between replacement incentives and allocation types. Based on our findings, we derive policy recommendations for the design of emission trading schemes emerging around the world. -- |
| Keywords: | EU emission trading scheme (EU ETS),replacement,adoption,diffusion,power sector,allocation rules |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s12010&r=reg |
| By: | Pollitt, M.G. |
| Abstract: | The aim of this paper is to look at the UK’s renewable energy policy in the context of its overall decarbonisation and energy policies. This will allow us to explore the precise nature of the ‘failure’ of UK renewables policy and to suggest policy changes which might be appropriate in light of the UK’s institutional and resource endowments. Our focus is on the electricity sector both in terms of renewable generation and to a lesser extent the facilitating role of electricity distribution and transmission networks. We will suggest that the precise nature of the failure of UK policy is rather more to do with societal preferences and the available mechanisms for encouraging social acceptability than it is to do with financial support mechanisms. Radical changes to current policy are required, but they must be careful to be institutionally appropriate to the UK. What we suggest is that current policies exhibit an unnecessarily low benefit to cost ratio, and that new policies for renewable deployment must pay close attention to cost effectiveness. |
| Keywords: | Renewable electricity, Feed-in-Tariff, Renewable Obligation |
| JEL: | H23 L98 |
| Date: | 2010–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1007&r=reg |