This paper aims to describe a resolution process for faltering financial firms that quickly allocates losses to bondholders and transfers ownership of the firm to them. This…
Abstract
Purpose
This paper aims to describe a resolution process for faltering financial firms that quickly allocates losses to bondholders and transfers ownership of the firm to them. This process overcomes the most serious flaws in resolution plans submitted by banks under Dodd–Frank Title I and in the Federal Deposit Insurance Corporation (FDIC) receivership procedure in Dodd–Frank Title II by restoring the balance sheet of a failing financial institution and immediately replacing the management and board of directors who allowed its demise.
Design/methodology/approach
Feasibility of the proposed resolution procedure is assessed by comparing long-term bonds outstanding for the largest American banks just before the 2008 crisis to the capital needed by these banks to restore their balance sheets after their losses prior to and during the crisis.
Findings
In almost all bank failures, this process would eliminate the need for government involvement beyond court certification of the reorganization. The procedure overcomes the serious incentive distortions and inefficiencies created by bailouts, and avoids the destruction of value and financial market turmoil that would result from the bankruptcies and liquidations that Dodd–Frank requires for distressed and failing banks.
Originality/value
Title II of the Dodd–Frank Act would require liquidation of any banks that enter into its resolution process. The case of Lehman Brothers indicates the severity of losses to investors that liquidation imposes and the disruption to financial markets and the economy. The procedure developed in this paper would avoid the disruptions that Dodd–Frank requires, preserving core functions of faltering financial firms and maintaining them as going concerns, even in a severe financial crisis.
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Before providing an overview of the conference with the above title and this Special Issue, this paper aims to present a view of the meaning of systemic risk, factors that affect…
Abstract
Purpose
Before providing an overview of the conference with the above title and this Special Issue, this paper aims to present a view of the meaning of systemic risk, factors that affect systemic risk and measures of systemic risk. Thereafter, the conference presentations and the papers in this issue are summarized.
Design/methodology/approach
Characteristics and measures of systemic risk are reviewed. Conference papers and presentations are summarized.
Findings
While some aspects of systemic risk of a financial institution can be measured, an important aspect associated with contagion through markets is not easily captured by simple measures.
Originality/value
The conference and the papers in this issue contribute to the policy debate about sources and characteristics of systemic risk.
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Ryan Oprea and Benjamin Powell
Experimental economics has been treated with skepticism by some Austrian economists. We argue that experimental methods are consistent with strong versions of praxeology, and are…
Abstract
Experimental economics has been treated with skepticism by some Austrian economists. We argue that experimental methods are consistent with strong versions of praxeology, and are therefore not methodologically problematic for Austrians. We further argue that experimental research methods have illustrated many uniquely Austrian themes and provide a fruitful method for future Austrian-inspired research.
Trine Dahl and Kjersti Fløttum
The purpose of this paper is to explore how energy companies discursively construct climate change when integrating it into their overall business strategy.
Abstract
Purpose
The purpose of this paper is to explore how energy companies discursively construct climate change when integrating it into their overall business strategy.
Design/methodology/approach
This linguistic study uses a quantitative/qualitative approach to investigate three instances of recent climate disclosure, climate strategy reports, by the energy majors Statoil (now Equinor), Suncor Energy and Total. The qualitative analysis focuses on how keywords and expressions function in their immediate linguistic context. The discussion takes the socio-political and business context of the companies into account.
Findings
The paper finds that the reports discursively construct climate change in different ways. Total presents climate change primarily as a responsibility the company is ready to take on; Suncor Energy presents it primarily as a business risk; and Statoil as a business opportunity. In the material as a whole, however, the risk representation is the most prevalent.
Research limitations/implications
The material is relatively modest; however, the three reports represent the first comprehensive accounts of how energy players fit climate considerations into their overall strategy. The analysis is based on three search terms (responsibility, risk and opportunity). Further studies should include a broader range of words that may be semantically related to each approach.
Practical implications
The study can inform corporate strategy discussions and indicate the rhetorical implications of discourse-related choices in climate disclosure.
Originality/value
The study deals with very recent corporate disclosure involving an emerging discourse, climate strategy reporting. As the reports represent responses to investor engagement, the findings should also be relevant for studies involving stakeholder perceptions.
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Companies are starting to capitalize on the potential of experimental economics as a decision-making tool. Hewlett-Packard (HP) is one of such pioneering companies. Experiments…
Abstract
Companies are starting to capitalize on the potential of experimental economics as a decision-making tool. Hewlett-Packard (HP) is one of such pioneering companies. Experiments, conducted at HP Labs, were used to test retailer contract policies in three areas: return, minimum advertised-price (MAP), and market development funds. The experimental design models the multifaceted contemporary market of consumer computer products. While the model is quite complex, participants were found to be effective decisions-makers and that their behavior is sensitive to variations in policies. Based on the experimental results, HP changed its policies; for example, it made the consequences for minimum advertisement price violations forward-looking as well as backward-looking. This line of research appears promising for complex industrial environments. In addition, methodological issues are discussed in the context of differences between business and academic economics experiments. Finally, the author speculates about potential future business applications.
Qiandan Liao and Jenna Pandeli
Although humour and conflict are popular topics in management, little attention has been paid to the negative effects of humour in terms of how workplace humour could turn into…
Abstract
Purpose
Although humour and conflict are popular topics in management, little attention has been paid to the negative effects of humour in terms of how workplace humour could turn into unexpected conflicts. From the perspective of conflict management, human resources (HR) need to better understand this dynamic transition process. The purpose of this research is to explore the transition from humour to conflict and how HR perform when addressing humour-related issues.
Design/methodology/approach
A secondary data, multiple case study approach is adopted. Case studies are analysed qualitatively and thematically through a content analysis matrix.
Findings
Aggressive humour is closely related to conflict. Humour content and the context in which it takes place are important influential factors contributing to the transition from humour to conflict. It is challenging for HR to deal with humour-related issues: most victims are unwilling to report the issue at an early stage until they cannot bear the joke, forcing HR to perform reactively.
Practical implications
Workplace humour-related issues should not be overlooked. HR should adopt an early, proactive approach to prevent severe conflict from developing and relationships deteriorating.
Originality/value
This study highlights the dynamics and complexity of the transition from humour to conflict, providing new insights for HR in terms of effective conflict management.