The efficiency of bank branches Berger, Allen N.; Leusner, John H.; Mingo, John J.
Journal of monetary economics,
09/1997, Volume:
40, Issue:
1
Journal Article
Peer reviewed
Open access
An understanding of bank branch efficiency may help resolve a number of conceptual, measurement, and policy questions about efficiency at the bank level. We measure the efficiency of over 760 ...branches of a large U.S. commercial bank. We find that there are about twice as many branches as would minimize costs, but this may be optimal from a profitability standpoint because ‘overbranching’ raises revenues from providing extra customer convenience. X-inefficiencies are quite large, over 20% of operating costs. These findings may help explain some efficiency results commonly found in bank-level analysis, and have important implications regarding bank M&As and interstate branching.
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The current regulatory capital standard for banks – the Basle Accord – is a lose/lose proposition. Regulators cannot conclude that a bank with a nominally high regulatory capital ratio has a ...correspondingly low probability of insolvency. On the other hand, because the Accord often levies a capital charge out of proportion to the true economic risk of a position, banks
must engage in “regulatory capital arbitrage” (or exit their low risk business lines). Since such arbitrage is costly, the capital regulations keep banks from maximizing the value of the financial firm. Regulators need to answer three questions: (1) What are the goals of prudential regulation and supervision? (2) How should bank “soundness” be defined and quantified? (3) At what level should a minimum “soundness” standard be set in order to meet the (perhaps conflicting) goals of prudential regulation and supervision? Possible answers to these questions are attempted, then the paper analyzes the two leading proposals for rationalizing the Accord – a “modified-Basle” (or ratings-based) approach and a “full-models” approach.
The Amphibian Metamorphosis Assay (AMA) is used to determine if a tested chemical has potential to impact the hypothalamic-pituitary-thyroid (HPT) axis of Xenopus laevis tadpoles, while the Fish ...Short Term Reproduction Assay (FSTRA) assesses potential effects on the hypothalamic-pituitary-gonadal (HPG) axis of fish such as the fathead minnow (Pimephales promelas). Several global regulatory programs routinely require these internationally validated tests be performed to determine the potential endocrine activity of chemicals. As such, they are conducted in accordance with standardized protocols and test criteria, which were originally developed more than a decade ago. Sizeable numbers of AMA and FSTRA studies have since been carried out, which allows for the mining of extensive historical control data (HCD). Such data are useful for investigating the existence of outlier results and aberrant control groups, identifying potential confounding variables, providing context for rare diagnoses, discriminating target from non-target effects, and for refining current testing paradigms. The present paper provides histopathology HCD from 55 AMA studies and 45 fathead minnow FSTRA studies, so that these data may become publicly available and thus aid in the interpretation of future study outcomes. Histopathology is a key endpoint in these assays, in which it is considered to be one of the most sensitive indicators of endocrine perturbation. In the current review, granular explorations of HCD data were used to identify background lesions, to assess the utility of particular diagnostic findings for distinguishing endocrine from non-endocrine effects, and to help determine if specific improvements to established regulatory guidance may be warranted. Knowledge gleaned from this investigation, supplemented by information from other recent studies, provided further context for the interpretation of AMA and FSTRA histopathology results. We recommend HCDs for the AMA and FSTRA be maintained to support the interpretation of study results.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
This paper analyzes the riskiness of credit enhancements offered on securitized pools of commercial and industrial loans. It develops a technique for allocating capital to such credit enhancements, ...based on setting the expected value of the credit losses in excess of allocated capital equal to the expected value of losses beyond required capital on the original loan pool. The resulting capital allocations are compared with those derived from a more general, bank-wide capital decision-rule, as well as newly published agency proposals regarding capital for credit enhancements.
Abstract
We present a morphological and spectral study of a sample of 99 BL Lac objects using the LOFAR Two-Metre Sky Survey Second Data Release (LDR2). Extended emission has been identified at ...gigahertz frequencies around BL Lac objects, but with LDR2 it is now possible to systematically study their morphologies at 144 MHz, where more diffuse emission is expected. LDR2 reveals the presence of extended radio structures around 66/99 of the BL Lac nuclei, with angular extents ranging up to 115″, corresponding to spatial extents of 410 kpc. The extended emission is likely to be both unbeamed diffuse emission and beamed emission associated with relativistic bulk motion in jets. The spatial extents and luminosities of the extended emission are consistent with the unification scheme for active galactic nuclei, where BL Lac objects correspond to low-excitation radio galaxies with the jet axis aligned along the line of sight. While extended emission is detected around the majority of BL Lac objects, the median 144–1400 MHz spectral index and core dominance at 144 MHz indicate that the core component contributes ∼42% on average to the total low-frequency flux density. A stronger correlation was found between the 144 MHz core flux density and the
γ
-ray photon flux (
r
= 0.69) than between the 144 MHz extended flux density and the
γ
-ray photon flux (
r
= 0.42). This suggests that the radio-to-
γ
-ray connection weakens at low radio frequencies because the population of particles that give rise to the
γ
-ray flux are distinct from the electrons producing the diffuse synchrotron emission associated with spatially extended features.
This paper surveys the current state-of-the-art in credit risk modeling at large U.S. banks. Within this context, the paper examines the near-term feasibility of an internal models approach to ...setting formal regulatory capital requirements for banks, as a replacement for the 1988 Basle Accord. Such an overhaul of the international capital standards would require, in our view, specific attention to several deficiencies in current modeling practices, including questions relating to model specification, parameter estimation, and model validation procedures. The paper also discusses possible uses of internal risk models for setting regulatory capital requirements against
selected credit instruments and/or improving examination guidance dealing with the capital adequacy of large, complex banking organizations.
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Abstract Introduction: Despite the clear genetic evidence linking serous tubal intraepithelial carcinoma (STIC) and high-grade serous ovarian carcinoma (HGSOC), the specific conditions and events ...that promote the progression of STIC lesions into invasive disease remain poorly understood. Method: As a critical initial step, we have assembled a cohort of incidental p53 signatures, STIC lesions, and STIC with concurrent HGSOC. We have performed extensive multi-modal analysis using multiplexed tissue imaging and spatial transcriptomics that identify features of the immune system that play a vital role in the early steps of HGSOC development. We have processed 43 specimens using highly multiplexed tissue imaging at single-cell resolution (cyclic immunofluorescence, CyCIF), and 35 specimens for micro-regional spatial transcriptomics using the GeoMx (Whole Transcriptome, Nanostring) on over 450 pathologist-annotated regions of interest. Results: Our data suggests an immune-cold environment and T-cell dysfunction in STIC lesions, including incidental STIC. One of the significant immune populations identified was CD103+ tissue-resident memory T cells (TRM). In incidental p53 signatures, activation of TRM was rare, similar to FT, which may indicate the absence of sensing “tumor antigen” by these TRM. CyCIF analysis also revealed that most incidental STIC lesions (7/9 cases) overexpress major histocompatibility complex (MHC) class I compared to the normal epithelium, especially both HLA complex, HLA-A and HLA-E. Most STICs showed extensive intra-lesion heterogeneity, with some STICs remaining HLA-A and HLA-E negative. Incidental p53 signatures, on the other hand, were mostly HLA-A and HLA-E negative and, when positive, had only a few cells expressing HLA. We hypothesized that there might be a natural selection of HLA-E-positive clones as STICs progress to HGSOC. Consistent with this, HGSOC showed further overexpression of HLA-E. However, HLA-E heterogeneity was still observed in the invasive tumor, with both positive and negative clones co-existing. Geomx data suggested that the interferon signaling pathway is upregulated in the epithelial of HLA-E positive STIC and cancer clones compared to HLA-E negative clones. In turn, both HLA-A and HLA-E might be overexpressed in the epithelial of HLA-E-positive STICs. Overall, we showed that the response in interferon (IFN) α and γ, NF-KB, and IL-6-induced STAT-3 pathways were upregulated in both STIC lesions and carcinoma. The role of these pathways, especially STAT-3 pathway, has been shown in other aneuploid cancers in promoting immune escape, cell proliferation and migration, chemoresistance and inhibiting apoptosis. We have shown the co-localization of cGAS and BAF, a marker for micronuclei rupture, by super-resolution 3D imaging to confirm one of the mechanisms of IFN activation. Conclusion: Taken together, these data may indicate chromosomal instability is one of the mechanisms that is driving the IFN-signaling pathway and, hence, a potential selective advantage for HLA-E-positive clones in tumorigenesis, leading to inhibiting NK cell surveillance followed by reducing T cell infiltration. Citation Format: Tanjina Kader, Jia-Ren Lin, Shannon Coy, Clemens Hug, Yu-An Chen, Roxanne J. Pelletier, Mariana Leon, John Lee, Yi-Lin Xu, Clarence Yapp, Natalie Shih, Gabriel Mingo, Euihye Jung, Srishti Rathore, Judith Agudo, Charles Drescher, Peter K. Sorger, Ronny Drapkin, Sandro Santagata. Multimodal spatial profiling reveals the emergence of an immune suppressive microenvironment at the initial stages of high-grade serous ovarian cancer development abstract. In: Proceedings of the American Association for Cancer Research Annual Meeting 2024; Part 2 (Late-Breaking, Clinical Trial, and Invited Abstracts); 2024 Apr 5-10; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2024;84(7_Suppl):Abstract nr LB311.
John J. Mingo, senior advisor at the Division of Research and Statistics, the Board of Governors of the Federal Reserve System, recently spoke at a conference called Credit Risk Modeling and the ...Policy Implications. Excerpts of his speech are presented. Significant effort is underway within the Federal Reserve System and at other domestic and foreign agencies to identify the pros and cons of alternative schemes for a new Basle standard. In the end, it seems clear that the complexity of financial transactions - and therefore the difficulty of determining capital adequacy - will continue to increase. The next iteration of the Accord is therefore likely to be only that, a next step.
THE REGRESSION RESULTS SUPPORT PELTSMAN'S CONCLUSION THAT BANKERS TREAT DEPOSIT INSURANCE AS A SUBSTITUTE FOR BANK CAPITAL, AND SUGGEST THAT REGULATORS HAVE MADE NO ATTEMPT TO REDUCE THIS ...'SUBSTITUTION EFFECT'. OTHER FINDINGS SHOW THAT THE LOWER THE RATIO OF ACTUAL CAPITAL TO CAPITAL DESIRED BY THE REGULATORS, THE MORE LIKELY IS THE BANKER TO ADD TO CAPITAL OVER THE NEXT PERIOD TO SATISFY THE DEMANDS OF THE BANK EXAMINER. THE EFFECT OF REGULATORY DEMANDS IS NONLINEAR IN NATURE, AND ITS MAGNITUDE IS QUITE LARGE. THESE RESULTS INDICATE THAT THE LEVEL OF BANK CAPITAL IS NOW GREATER THAN IT WOULD BE IN THE ABSENCE OF BANK CAPITAL REGULATION, AND THE CONSOLIDATION OF THE EXAMINATION FUNCTION INTO A SINGLE AGENCY WOULD NOT APPRECIABLY CHANGE THE IMPACT OF SUCH REGULATION. APPENDIX. REFERENCES.
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