This paper examines how corporate financial structure shapes the impact of a financial crisis on the real sector by way of its effects on flows of funds and on corporate real expenditures.
It is one of the first papers to utilize extensive cross-country flow and balance sheet data and also to examine
subcomponents of GDP in the wake of banking and currency crises rather than focusing exclusively on aggregate GDP.
Investors in MMMFs choose these funds because of the stability and liquidity that they provide
. This is
precisely why these investors are prone to run during a financial crisis when either or both of these
product features may be compromised. If investor losses resulted from market events more frequently, it
is possible that the investor base and level of interest in the funds today would be very different.
This paper studies the responses of residential property and equity prices,
inflation and economic activity to monetary policy shocks in 17 countries,
using data spanning 1986-2006. We estimate VARs for individual economies
and panel VARs in which we distinguish between groups of countries on the
basis of the characteristics of their financial systems. The results suggest that
using monetary policy to offset asset price movements in order to guard
against financial instability may have large effects on economic activity.
There is no general consensus on how to define various risk-related terms, including the term
“risk” itself, and people may have different views on how those terms apply to their particular
organization. Both fund boards and advisers would benefit from establishing a common
understanding of the terms and concepts they use in risk-related discussions, as well as how they
apply to their funds. Some advisers include definitions or descriptions of how they view risk and
risk management in their board presentations.
Finally, the analysis of national sanctioning regimes carried out by the Commission, along
with the Committees of Supervisors (now transformed into European Supervisory
Authorities) has shown a number of divergences and weaknesses which may have a negative
impact on the proper application of EU legislation, the effectiveness of financial supervision,
and ultimately on competition, stability and integrity of financial markets and consumer
Interest income is recognized on the accrual basis.
Dividend income and distributions from investment
trust units are recognized on the ex-dividend and
ex-distribution date, respectively.
Interest on inflation-indexed bonds will be paid
based on the principal value, which is adjusted for
inflation. The inflation adjustment of the principal
value is recognized as part of interest income in the
Statement of Operations.
The largest support instance noted relative to AUM was the $336.8 million, or 6.3% of AUM, support to
the Russell Money Market Fund. This entire amount was due to the purchase of the Fund’s Lehman
holdings, as noted in the following disclosure, “On September 14, 2009, the Lehman Securities were
purchased by Frank Russell Company from the Fund at amortized cost of $402,764,934 plus accrued
interest of $775,756.
Different PHI functions give rise to specific policy challenges. Primary PHI markets often create
access-related challenges, especially for high-risk and vulnerable groups, where they represent the sole
form of cover for some population groups.15 Where public and private delivery systems are linked to
different funding sources, as in systems with duplicate private health insurance, differences in access to
care, choice levels and utilisation patterns occur between individuals with and without private insurance.
The remainder of the paper is as follows. The next section defines the standard approach
and the notion of luck. Then, we define the F DR and explain our new methodology
which allows us to compute the F DR among the best and worst funds separately.
Section 3 presents the performance measures, the estimation technique to compute the
p-values as well as the mutual fund data. Section 4 contains the empirical analysis of
the impact of luck on performance across the four investment categories. Section 5 concludes.
For example, SLAT Prime Obligation Fund disclosed a variety of asset purchases occurring in the year
ended June 30, 2009, but did not disclose transaction dates. Second, even if the date of the support was
disclosed, in many cases that date represented when the sponsor chose to provide direct support, but the
direct support may have been preceded by indirect support such as guarantees that were important in
stabilizing the NAV, reassuring investors and preventing runs.
Company Act of 1940.
If the current rules were in place in 2007 and 2008, prime MMMFs could still
have held the distressed asset-backed commercial paper and Lehman debt securities that triggered support
for many funds and the break the buck event for the Reserve Fund. Indeed, Lehman debt maintained the
highest short term ratings up through the time it filed for bankruptcy.
And recent sponsor behavior
indicates that support is still a likely event in the face of such credit events or uncertainty.
Federal funds are the heart of the money market in the sense that they are the core of the overnight market
for credit in the United States. Moreover, current and expected interest rates on federal funds are the basic
rates to which all other money market rates are anchored. Understanding the federal funds market requires,
above all, recognizing that its general character has been shaped by Federal Reserve policy. From the
beginning, Federal Reserve regulatory rulings have encouraged the market's growth.
Social Security payments and DB pension plans have traditionally provided the
bulk of retirement income in the United States. For example, the U.S. Social
Security Administration reports that 44 percent of income for people 65 and older
came from Social Security income in 2001 and 25 percent came from DB pensions.
As Figure 1.
Examples of embedded derivatives which are not required to
A derivative embedded in an insurance contract is considered to be closely
related to the host insurance contract if the embedded derivative and the
host insurance contract are so interdependent that an entity cannot
measure the embedded derivative separately. In this situation, an entity
would not separate the embedded derivative.
Among funds, there are substantial differences in risk-return profiles,
investment horizons, asset allocation, eligible instruments, risk tolerances, and
Because each fund is different and has varying goals and objectives,
it is difficult to generalize about the investment strategies of SWFs as a class. For
example, an oil-exporting economy may initially establish a SWF for stabilization
The first SWF was established by Kuwait in 1953 as a means to help stabilize
the economy from fluctuating oil prices.
In 1956 the Gilbert Islands (now Kiribati)
established the Revenue Equalization Reserve Fund to manage profits from
phosphate mining. Following Kuwait and Kiribati, the next major SWFs were
created in the 1970s in the wake of the oil shock. The most recent wave began in the
1990s with the Norway Government Pension Fund-Global in 1990 and continues to
This study was mandated by Congress in the National
Defense Authorization Act for Fiscal Year 2002
(P.L. 107-107), Section 253: Study and Report on Effectiveness
of Air Force Science and Technology Program
Changes (see Appendix A).
The extension of central bank liquidity eased the pace of asset-shedding
observed in late 2011, but did not turn the underlying trend. If the banks in the
EBA sample, for instance, failed to roll over their senior unsecured debt
maturing over a two-year horizon, which amounts to more than €1,100 billion
(€600 billion among banks with a capital shortfall), they would have to shed
funded assets in equal measure. By covering these funding needs, the LTROs
and dollar swap lines helped avert an accelerated deleveraging process.
Sovereign Wealth Funds (SWFs) are investment funds owned and managed by
national governments. Originally created in the 1950s by oil and resource-producing
countries to help stabilize their economies against fluctuating commodity prices, and
to provide a source of wealth for future generations, they have proliferated
considerably in recent years. Although their lack of transparency makes estimating
SWF investment levels difficult, it is estimated that they currently manage between
$1.9 and $2.9 trillion.
Africa is still undergoing a process of economic stabilization, and many countries are facing
specific issues of post-conflict reconstruction that call for emergency social funds interven-
tions. The region already has the largest concentration of social funds, with the AGETIP agen-
cies of West Africa regrouped within AFRICATIP. The social funds of Eastern and Southern
Africa will develop their own network to be called Social Funds NET.