Journal Article The Need for a Specific Overcrowding Policy: Can Overcrowding “Automatically” Disappear? Get access H. W. Singer H. W. Singer Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 3, Issue 2, February 1936, Pages 130–139, https://doi.org/10.2307/2967503 Published: 01 February 1936

Journal Article A Note on Tautologies and the Nature of Economic Theory Get access T. W. Hutchison T. W. Hutchison Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 2, Issue 2, February 1935, Pages 159–161, https://doi.org/10.2307/2967564 Published: 01 February 1935

We study the interaction between relationship banking and short-term arm’s length activities of banks, called trading. We show that a bank can use the franchise value of its relationships to expand the scale of trading, but may allocate too much capital to trading ex post, compromising its ability to build relationships ex ante. This effect is reinforced when trading is used for risk shifting. Overall, combining relationship banking and trading offers benefits under small-scale trading, but distortions may dominate when trading is unbridled. This suggests that trading by banks, while benign historically, might be distortive with deeper financial markets.

Popular investment advice recommends that stock/bond and stock/wealth ratios should rise with investor risk tolerance and investment horizon respectively, prescriptions that are difficult to reconcile with the simple mean-variance model. We show that extending the mean-variance model to include human capital, without any other modifications, can simultaneously justify both recommendations, so long as the correlation between labour income and stock returns falls within a range determined by market and investor-specific parameters. Aggregate labour income data from 11 countries generally satisfy this requirement, as do plausible individual income processes. We also consider the implications of human capital for the optimal bond/wealth ratio over the investment horizon, and examine the sensitivity of the stock/bond mix to the volatility of labour income.

This paper documents the effects of large (block) transactions on the prices of common stocks traded on the New York Stock Exchange. We examine whether mean temporary and permanent price effects associated with large and small transactions differ and whether the price effects vary cross-sectionally according to the size of the block. Alternative definitions of block size are investigated – percentage of the equity traded, block volume in relation to normal trading volume, and dollar value of the block. The results suggest that price effects are predominantly temporary for seller-initiated transactions and permanent for buyer-initiated transactions.

Financial intermediation has distinct value from transforming financial claims to create liquidity and mitigate risks. However, research and policy competition analyses often neglect this value or minimally account for it. We review findings to better incorporate this value. We suggest shifting the mix of individual services analyzed to better represent the distinct value, focusing more on topics closely aligned with the distinct value concept beyond individual services, and accounting for the multimarket nature of financial intermediation. We recommend attention on future competition with digital FinTech, BigTech, and DeFi firms and policies to best preserve the distinct value of financial intermediation.

In this paper, we study credit risk transfer (CRT) in an economy with endogenous financing (by both banks and non-bank institutions). Our analysis suggests that the incentive of banks to transfer credit risk is aligned with the regulatory objective of improving stability, and so the recent development of credit derivative instruments is to be welcomed. Moreover, we find the transfer of credit risk from banks to non-banks to be more beneficial than CRT within the banking sector. Intuitively, this is because it allows for the shedding of aggregate risk which must otherwise remain within the relatively more fragile banking sector. Therefore, regulators should act to maximize the benefits from CRT by encouraging the development of instruments favorable to the cross-sectoral transfer of aggregate credit risk (including basket credit derivatives such as collateralized debt obligations). Finally, we derive the optimal regulatory stance for banks relative to non-bank financial institutions. We show that a level playing field approach is sub-optimal. Regulatory stances should be set to actively encourage cross-sector CRT, first because of the higher fragility of the banking sector and second to induce banks to incur the costs of CRT which otherwise lead them to undertake an insufficient amount of CRT.

Journal Article The Expectations Hypothesis, the Yield Curve, and Monetary Policy: Comment Get access Jack W. Cox, Jack W. Cox Federal Reserve Bank of New York Search for other works by this author on: Oxford Academic Google Scholar Frederick W. Deming Frederick W. Deming Federal Reserve Bank of New York Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 80, Issue 2, May 1966, Pages 333–335, https://doi.org/10.2307/1880697 Published: 01 May 1966

I. Subject and methods of the inquiry: Industries covered and questions asked, 1. — A pre-war period selected, 7. — Arrangement of the returns by classes and groups, 9. — II. Stock ownership by executives: Their salaries, 11. — Extent to which executives hold stock in large concerns, 12. — In moderate and small concerns, 14. — Stockholdings by relatives or friends of the executives, 18. — Executive salaries, by classes and groups, 19. — Fixity of salaries; only in the long run adjusted to corporate earnings, 20. — Proportion of management expense to capital, 23. — Proportion in close corporations and in those widely owned, 27. — Rarity of arrangements for bonus or profit-sharing, 28. — III. Earnings and surpluses, for all classes, 30. — For the first class, 33. — For the second class, 34. — Earnings in the first class more regular but less high, 35. — Dividends and surpluses, 37. — Significance of surplus, 39. — IV. The theory of profits: Contrast between American and European practice, 40. — Two views on theory: the one regarding business profits as a form of wages, the other as distinct from wages, 40. — American practice in accord with the second view, 42. — European practice, especially on the Continent, implies more nearly the first view: The tantième, 43. — The merits and demerits of the two practices, 48. — Conclusion, 59.

Journal Article Agricultural Syndicates in France Get access Henry W. Wolff Henry W. Wolff Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 8, Issue 1, October 1893, Pages 98–102, https://doi.org/10.2307/1882880 Published: 01 October 1893