Ross Levine advocates the creation of an independent agency (‘The Sentinel’) to monitor the conduct of financial regulation in this paper.
The assessment of portfolio risk is on everyone’s mind at the moment.
In timely fashion, UCD host a seminar tomorrow on this topic. The details are below:
The next seminar hosted by the Centre for Financial Markets (CFM) will take place tomorow, March 31 between 2-3.15pm at the Smurfit School of Business, Carysfort Avenue, UCD. The venue for the paper is Room C302.
The paper is to be given by Christophe Perignon (HEC) (www.hec.fr/perignon):
The Risk Map: A new Tool for Backtesting Value-at-Risk Models
Details of the seminar series and the paper are available here.
The Live Register figures for March are out.
The standardised unemployment rate in March was 14.7%, unchanged from February. This compares with the latest seasonally adjusted unemployment rate of 14.7% from the Quarterly National Household Survey in the fourth quarter of 2010, and an annual average of 13.6% for 2010.
By way of comparison, the baseline forecast for 2011 unemployment in the Central Bank’s PCAR macroeconomic scenario is 13.4%. In the adverse scenario, this rises to 14.9%. We are almost there, and it is only March.
At least the Central Bank scenarios got the 2010 unemployment numbers right! This contrasts with their 2010 GDP numbers, as Dan O’Brien pointed out earlier in the week.
(And I admit that I am baffled by an adverse house price scenario that is not robust to the ‘What if Morgan Kelly is right?’ objection.)
This morning’s WSJ notes that Portugal’s 2010 fiscal deficit will likely be revised upwards due to a shift in Eurostat’s rules concerning the accounting treatment of problematic assets. The March 16 Eurostat guidance note is here.
Having been a bit tough on the FT yesterday morning, I would like to echo commenter DOMC in drawing attention to a very good article by David Oakley (see here; related piece here). While our attention has naturally been on the Ireland-specific aspects of negotiations over the crisis-resolution mechanisms, the Grand Bargain on the ESM is probably far more significant for our creditworthiness.
David Oakley notes that market conditions are improving for Italy and Spain. This is consistent with the idea of a self-fulfilling equilibrium: if you look like your will need a bailout no one wants to lend to you (and get caught up in a later “bail-in”), and so you end up losing market access and forced into a bailout. This is what seems to be happening to Portugal at the moment; Italy and Spain have been able to stay out of the critical region — at least for now. A problem for Ireland is that improving your fundamentals looks less effective once already in the bailout mechanisms. Can it make sense to have this “black hole” (potentially) spreading from the periphery? Hardly a Grand Bargain.