Narrow Results

This paper aims to develop a new pricing approach for longevity bonds under the uncertainty theory framework. First, we describe the life expectancy by a canonical uncertain process and illustrate the dynamic of short interest rate via an uncertain Vasicek interest rate model. Then, based on these descriptions, we construct an uncertain survival index model and present its procedure for parameter estimation. By applying the chain rule, we derive a pricing formula of the uncertain zero-coupon bond. Considering that the financial market is incomplete, we put forward an uncertain distortion operator. Furthermore, based on the uncertain survival index, the uncertain zero-coupon bond pricing formula and the uncertain distortion operator, we develop a pricing formula of the uncertain longevity bond and its calculation algorithm. Finally, a numerical example is shown to illustrate the influence of parameters on the price of the uncertain longevity bond.

The US financial system is undergoing a painful restructuring as credit losses originating in the mortgage finance sector of the economy grow ever larger. A combination of factors including general prosperity, demographic shifts in demand for housing, low interest rates, innovations in mortgage lending and securitization, and a breakdown in credit quality control systems all contributed to this problem. Public policymakers and industry leaders are struggling to find ways to stem the credit losses, restructure and recapitalize the financial industry, and set the economy on a path to recovery. This paper reviews the origins of this problem, explains the events that precipitated the crisis in 2007, and analyzes the pros and cons of the "fixes" that have been proposed to address these problems.

The Brady Plan provided a partial solution to the Latin American debt crisis of the 1980s. This article revisits and analyses the Plan in considerable detail and explores the potential application in East Asia today of the ideas behind the Plan, and of the lessons that can be drawn from it. Seven lessons are identified. The Brady Plan was conceived and developed in Latin America and the principal lesson is that although it may not be replicated, developing nations may learn from it. Innovative domestic solutions are recommended for the resolution of financial problems and debt crisis.

Since the Global Financial Crisis, the notion of securitization has become familiar to urban scholars, though research has been limited to mortgage-backed securities. This paper attempts to delineate the distinctive urban outcomes of securitization techniques applied to real estate, taking Hong Kong REITs (H-REITs) as a case study. It examines the way through which liquid H-REIT capital anchors into the built environment, and how this process impacts the life of local communities. The study shows that the urban dynamics of REIT investment contrast with the corporate environment and asset management objectives of the initiator/sponsor groups of H-REIT structures, a set of characteristics that are captured by the notion of “management styles.” Amongst the three management styles identified in the paper, those developed by the Hong Kong family-based groups have not been sufficiently active to produce significant effects on the built environment. In contrast, the Link REIT has an aggressive value enhancement strategy that has reconfigured the social geographies of retail consumption across the whole territory, to the detriment of social housing estate residents. These results support the recognition that the financialization of the built environment tends to exacerbate social polarization and to trigger political conflicts, but they must be weighed against the contingent conditions in which real estate securitization take place.

This article examines and evaluates a variety of factors that characterize the PRC at the end of 2023–including elite politics and Xi Jinping’s position; a malaise that grips society; the “securitization” of almost all dimensions of policy; economic challenges and concerns; and the state of the CCP as a ruling Leninist party.

US product-liability laws unwisely treat credit-rating organizations (CROs) as if they produce opinions rather than empirically-based economic research. In principle, trained professionals gather time-varying information ("financial news") and analyze it statistically to reduce it to a single dimension, allegedly for the benefit of investors, which, in turn, enables issuers to finance themselves at lower cost. In practice, the issuer-pays business model currently used for funding the production and distribution of ratings information creates an incentive to favor high-volume issuers by over-rating private-label securitizations. While the Dodd–Frank Act intensifies SEC oversight of CRO activity, the SEC has a history of being captured by regulatory clients. We argue that the fundamental solution is to create accountability in the ratings process so that private label securitizations can play a constructive role in the provision of credit and we go on to offer some conjectures about how this could be done.

This study examines whether, and to what extent, SFAS166/167 changed the role of securitization in bank liquidity and lending activities. We compare the sensitivity of on-balance sheet loan growth to the loan portfolio liquidity index proposed by Loutskina [(2011) The role of securitization in bank liquidity and funding management, Journal of Financial Economics 100, 663–684] between affected banks and control banks. We find that SFAS166/167 is significantly associated with a reduction in the use of securitization to enhance on-balance sheet liquidity, consistent with the view that consolidation on balance sheets may render the securitization of loans too costly to be considered an effective source of liquidity. In addition, we find that affected banks with the highest increase in liabilities from consolidating Qualified Special Purpose Entities (QSPEs) experienced a significant decrease in lending activities relative to the control banks. This is likely because consolidating former QSPEs may adversely affect the ability and willingness of banks to engage in securitization and issue new loans. Taken together, our results suggest that SFAS166/167, requiring the consolidation of former QSPEs, led to a decline in the role of securitization as a liquidity management tool in banks and to a significant decline in lending.

The core idea of the European Union (EU) is to foster economic and political integration among its member states based on liberal principles, a common market, and the establishment of a business-friendly environment. What is surprising is the new rhetoric originating in Brussels and connected to the “Energy Union” that portrays its energy dependence on Russia as a potential threat. One important dimension of this newly launched “Energy Union” is the replacement of the EU’s market orientation in its energy relations with Russia by a “securitization” of Russia’s intention vis-à-vis Europe. These securitizing moves culminate in a vigorous and costly diversification strategy for natural gas supply. The construction of new liquefied natural gas (LNG) terminals and gas storage, as well as a new gas mega pipeline passing through Central Asia is part of this new strategy. The recently inaugurated “Energy Union,” at the same time, includes improved infrastructure connections and the approval of domestically produced shale gas. As a result, natural gas has gained the status of a “bridge fuel” while related large-scale infrastructure would lock European economies into a fossil path that ultimately undermines the EU’s goal toward a decarbonized economy. Analyzing the European Commission’s emphasis on natural gas, produced either by conventional or unconventional extraction methods, bears critical insights for China’s energy strategy. As the EU appears to have shifted its emphasis from sustainability to energy security, a vacuum would be left for China to fill, thus rendering it eligible to play the role of the next global leader in climate politics.

Based on the analytical framework of securitization, this article argues that cooperation between China and the United States on climate change will not lose momentum despite President Trump’s seemingly passive stance. A securitization process on the climate issue has been ongoing in China since President Xi Jinping took office and proposed the Overall National Security Outlook (ONSO). Climate security was thus integrated into China’s political discourse as a key component of ecological and common security, leading to a period of China-U.S. cooperation during the Obama administration. Similarly, in the United States, climate policy has been cemented in security planning and assessment of various federal agencies. The U.S. security sector seems to be largely unaffected by the White House decision to withdraw from the Paris Agreement. A growing number of Americans treat climate change as a security threat and many U.S. states and cities, in collaboration with business leaders, have taken on a role in international climate diplomacy. Combined with existing intergovernmental collaborative projects, robust market forces and innovative local initiatives will continue to push China-U.S. climate cooperation forward. As a necessary step to sustain its ties with the United States on climate issues, the Chinese government needs to propose a renewed bilateral framework on energy and environment cooperation under the China-U.S. Comprehensive Economic Dialogue.

Despite the traditional resistance to consider climate change as a national security issue, the security impact of climate change has been increasingly recognized by official discourses in China over the past few years. The Chinese perception on climate change has shifted from a development issue to a security topic; and two driving forces are behind the emergence of the climate security discourse: the shift of China’s economy towards a “New Normal” and the commitments China made in the Paris Agreement on Climate Change. Meanwhile, two modalities of discourse that characterize the Chinese context are also discerned. One that involves national security has a rather fixed procedure about how security can be spoken of and by whom; the other is more relevant for issues like climate change and air pollution. In both cases, even if the language of security is used with regard to climate issues, they are handled as normal politics and governmental actions are legitimized by the use of security language. Although China has taken on more climate responsibilities, it seems unprepared for global climate leadership because security considerations not only determine the country’s participation but also limit its international commitments in global climate governance.

In this paper, we analyze Sovereign Bond-Backed Securities in the Euro area, concentrating our attention on the return of the different tranches and on their riskiness. We show that as the correlation level among States increases, the yield rate of senior tranches increases while the yield rate of junior tranches decreases. A similar effect is observed when introducing a block dependence structure with high correlation among States belonging to the same block. Introducing a nonzero recovery rate, as opposed to a null recovery rate, decreases the yield rate of senior tranches and increases the yield rate of junior tranches. We compute the loss distribution and the Value at Risk (VaR) associated with the market risk of retaining the different tranches of the bond. We also analyze the possibility of reaching a safe asset through pooling tranches of government bonds of different States. In summary, we show that the issue in reaching a comprehensive and safe offering through the securitization of government bonds is not the safety of senior tranches but the risk of the junior ones.

This paper examines the economic and financial impact of the COVID-19 pandemic and the responses that governments undertook. Though large and unprecedented in size, policy response has mostly been the same. Huge monetary stimulus, rate cuts, direct market intervention like bond purchases and debt moratoriums. Many of these were techniques used in the previous global financial of 2007–2009. Economies were already fragile and in a vulnerable state when the pandemic struck in late 2019. Continued use of the same policies did prevent a potential meltdown but has increased system vulnerability. The global debt burden is now much larger but governments may have fully expended all their monetary ammunition. Fiscal stimulus though much needed and more appropriate is seriously constrained by budget deficits and lack of fiscal space. Adding more debt to fund fiscal expansion is not really an option. Yet, the pandemic has made vulnerable, several parts of the economy that need to be salvaged. The SME sector which forms the spine of most developing economies is verging on collapse due to cash flow disruptions arising from lockdowns. The domestic banking sector which had funded these SMEs is exposed to a potential meltdown unless restructuring is done. The loan moratoriums widely adapted do not solve but merely postpone the problem. Governments, given their precarious fiscal position are in no position to provide the huge financial infusion needed to shore up the SMEs and banks. Islamic finance, which has risk-sharing alternatives can provide a way out of this conundrum. The paper proposes a shariah compliant risk sharing alternative to resolve this problem.

While work on the securitization of migration has often held borders to be the site at which state power is most keenly felt, this paper draws on static and walking interviews with Bangladeshi male migrant workers in Singapore to understand their everyday experiences of the securitization within state territory. These narratives demonstrate how the Little India district in Singapore has been scripted as an exceptionally problematic space associated with dangerous migrant bodies, within which Bangladeshi migrants encounter state power in a variety of guises, ranging from police patrols to video surveillance technologies. They also reveal how Bangladeshi migrants continually struggle against these state-led scripts of insecurity, even if their sojourn in Singaporean territory is circumscribed by a condition of permanent temporariness. Through this discussion, the securitization of migration is conceptualized as an unfinished project that is often exerted unevenly and paradoxically within state territory. The security-migration nexus should also not only be understood with recourse to bodies deemed “illegal” and “unwanted” — such as asylum-seekers and undocumented migrants — but should also account for temporary labour migrants who have been legally admitted into state territory, whose labour power is central to the host state’s economy but who are disallowed from ever belonging within the countries they work in.