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The 2008-2009 global financial crisis, and the protracted European sovereign debt and banking crisis that followed, re-shaped the institutions that govern Europe’s financial system. Despite demands for comprehensive and integrated reform, patterns of regulatory change varied significantly across core elements of the financial system. Through case studies of the banking, securities, insurance and pensions sectors, this study documents the emergence of a patchwork of European financial regulatory institutions that entail new divisions in the responsibilities held by the European Commission, the European Central Bank (ECB), and domestic governments. Employing an historical institutional framework, the study finds that the distribution of financial regulatory authority between member states and the European Union preceding the onset of the 2008 global financial crisis was instrumental in shaping changes to EU regulatory institutions during and in the immediate aftermath of the crises. Sectoral variation in levels of regulatory integration among member states prior to the crises shaped state preferences and predisposed institutions to particular patterns of institutional change. Where high levels of regulatory integration existed before the crisis, EU institutions expanded through a process of institutional layering, gradually hardening enforcement mechanisms, extending regulation to new markets, and issuing more binding technical standards. This contrasts with the displacement in the locus of supervisory authority experienced in the creation of a European banking union in 2013, in which supervisory control over eurozone banks was transferred from domestic authorities to the ECB. Low-levels of regulatory integration are found to have been a necessary condition for this transformative change to occur, while the protracted eurozone sovereign debt crisis is found to have provided a period of heightened contingency during which the ECB was able to exert significant political agency at the European Council to effect the resulting shift. In explaining the emergence of a complex financial regulatory system in Europe after 2008, the study contributes to deeper understanding of the political processes that shape the evolution and integration of national and international institutions of economic governance in the early 21st century. / Political Science

This dissertation topic is on the market discipline of banking institutions during the most recent business cycle (i.e., the business cycle surrounding the Great Recession of 2007). Market discipline has been a focal point of banking regulation since the implementation of Basel II in June 2004. In an attempt to provide a comprehensive framework that provides international standards on bank supervision, the Basel Committee on Banking Supervision designed a complementary three-pillar structure. These include: capital requirements, the supervisory review process, and market discipline. Recent research has shown that the success of capital requirement ultimately lies in how well it serves market discipline (Gordy and Howells, 2006). The FDIC defines market discipline as: The forces in a free market (without the influence of government regulation) which tend to control and limit the riskiness of a financial institution’s investment and lending activities. Such forces include the concern of depositors for the safety of their deposits and the concern of bank investors for the safety and soundness of their institutions. Source: FDIC Glossary of Definitions Thus, regulators must account for market discipline in their design of a new regulatory framework. In Chapter 1, I investigate how the yield spreads of debt issued by U.S. Systemically Important Banks (SIBs) in the secondary market are associated with their idiosyncratic risk factors, as well as bond features, and macroeconomic factors, over a complete business cycle across the pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q3) periods. Both Global and Domestic SIBs (G-SIBs and D-SIBs) are considered. Economic theory suggests that as SIB risk-levels increase, bond-buyers demand a higher yield spread (lower price) on the debt security (Evanoff and Wall, 2000). However, explicit and implicit government safety nets before, during, and after the crisis complicate the market discipline mechanism and make a priori predictions of the yield changes in response to increases in risk inconclusive. This renders the issue an empirical exercise. By stratifying across the most recent business cycle, I am able to investigate two broad objectives. First, I study how bond-buyers react to increases in SIB risk across the recent business cycle. Second, I investigate the degree to which the proportion of the variance in yield spreads explained by macroeconomic factors changed across the phases of the cycle. Unusual volatility during and after the financial crisis in the macroeconomic realm, and the keen focus by regulators, investors, and other stakeholders on idiosyncratic risk makes it theoretically unclear which countervailing force is the primary driver of yield spreads in the secondary market. The data includes over 9.7 million bond trades across the 26 SIBs based in the U.S. I obtain several interesting results. First, bond-buyers do react to increases in bank risk factors (leverage, credit risk, inefficiency, lack of profitability, illiquidity, and interest rate risk) by charging higher yield spreads. Second, bond buyer response to risk is sensitive to the phase of the business cycle. Third, the proportion of variance in yield spreads driven by issuing-firm-specific and bond-specific risk factors (as opposed to macroeconomic factors) increased from 29% in the pre-crisis period to 48% and 77% during the crisis and post-crisis periods, respectively. This last finding indicates that market discipline greatly improved in the two latter phases of the business cycle, and while the literature on market discipline following the 2007-2009 crises is still scant, this result is consistent with some extant studies (Balasubramnian and Cyree, 2014). Despite unprecedented accommodative fiscal and monetary policies during and after the financial crisis, market discipline in the secondary bond market has strengthened considerably, providing evidence that regulatory intervention and market discipline can work in tandem. These results can advise regulators, investors, bank risk managers, and others, on how bond traders react to issuing-bank, bond, and macroeconomic factors. For example, regulators and policy makers should account for the effect of market discipline in formulation of their monetary and fiscal policies designed to achieve specific targets because, otherwise, they may miss the targets. In Chapter 2, I study the impact of bank risk taking and macroeconomic factors on the growth of interest-bearing deposits and interest rates paid on those deposits for U.S. commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs). The sample period for deposit growth covers the recent business cycle (2003:Q1 to 2014:Q4) and it is broken down into pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q4) sub-periods in order to contrast the patterns of effects over these phases of the business cycle. Deposit pricing equations are estimated over the post-crisis period only due to data limitations. Separate deposit growth rate equations are estimated across four deposit types (transaction, savings, large, and small time deposits), while separate deposit pricing equations are estimated across 30 deposit types (including various terms and balances for certificates of deposits as well as personal and business money market accounts and interest checking accounts, among others). Bank heterogeneity is accounted for via fixed effects estimation. I obtain several interesting results. First, there is a relationship between bank risk taking and subsequent deposit withdrawals over the three sub-sample periods, indicating that depositors do respond to bank riskiness under the pre-crisis, crisis, and post-crisis environments (market discipline). Second, there is also market discipline in deposit pricing as evidenced by the statistically significant and consistent relationship between bank risk taking and deposit pricing across all 30 different product types I study. Third, when deposits are disaggregated into insured and uninsured components, I find that the uninsured depositors react to changes in bank credit risk via deposit withdrawals (during the pre-crisis period) and pricing (during the post-crisis period) to a greater extent than do the fully insured depositors, supporting the presence of moral hazard. Fourth, since the pre-crisis period, macroeconomic factors have become even a greater force in driving the changes in deposit growth because of market intervention and implicit and explicit government guarantees. As macroeconomic factors drive more of the variation in deposit growth, mechanisms to keep CBO risk in check depend less on the depositors and banks and more on macroeconomic policy. In Chapter 3, I investigate the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 on accounting fees for commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs), while controlling for their litigation risk via legal fees spent on outside counsel. Using panel data from 2008 through 2014 for U.S. CBOs, I find that litigation risk is the primary driver of accounting fees for “large” CBOs with $1 billion - $10 billion in total assets. This finding is contrary to previous studies, which attribute the majority of explained variance in those fees to firm size alone. To my knowledge, these results are the first to explicitly confirm the litigation risk-audit fee hypothesis (Seetharaman et al., 2002) for the banking industry. In terms of magnitude, I find that for every one percent increase in legal fees, accounting fees will increase from two to nine basis points, depending on CBO size. Controlling for bank-specific risk and the general business cycle, our results show that Dodd-Frank has the greatest impact on accounting fees for small CBOs (<$500 million in total assets), which experience an increase in these expenses of 73% due to the drafting of the Act, and an increase of 105% due to the subsequent passage (compared to an increase of 56% and 86% in accounting fees for the large CBO cohort during the drafting and subsequent passage of Dodd-Frank, respectively). I also find that a decrease in bank leverage (for CBOs of all sizes) and an increase in real estate loans to total loans (for large CBOs) are indicative of higher accounting fees. / Economics

This dissertation consists of three essays that adopt both theoretical and empirical methods of analysis to study certain economies in which the incomplete information and the strategic complementarities between players are important. Chapter 1 explains the topics discussed in the subsequent chapters and gives a brief survey on the literature. In Chapter 2, I revise a traditional global game model by dividing the continuum of players into a group of speculators and a group of stakeholders. It is found that the uniqueness property remains in the new game. Then I extend the static game to a two-stage game and investigate the efficacies of certain label changing mechanisms proposed by the authority to stabilize the regime in the dynamic context. It is shown that a label changing mechanism allowing for downward social mobility may not work, whereas a label changing mechanism allowing for upward social mobility generally makes the regime more stable. In Chapter 3, I add a speculator and an authority to a bank-run model to investigate how the speculator endangers a business or an economy, and what the authority can do about it. In particular, I show that the speculator can increase the financial system's vulnerability by serving as a coordinating device for the investors and thus triggering the crisis. It is further shown that deterring the speculator may not undo the speculator's impact because of multiplicity problem; rewarding holding investors is useless; and eliminating the preemption motives among investors works given enough effort. A discussion of the 1997 Asian financial crisis and the IMF's role in it is also included. Chapter 4 develops a repeated beauty-contest game to investigate the effect of previous winners' actions on the spread of subsequent players' actions. I first characterize the unique equilibrium of the game. Then I focus on the equilibrium dynamics of several variances depicting different forms of action variability. It is found that whether or not a specific variance diminishes over time depends on the relative precision of public and private signals. To illustrate the theoretical results, I conduct an empirical study on the Miss Korea contest. It is found that the contestants' faces have been converging to the ``true beauty'' overall, but diverging from each other over the last 20 years. Chapter 5 concludes. / Ph. D.

The United States suffered a severe financial crisis in September of 2008, the effects of which are still strongly reverberating throughout the national economy and the finances of American government. While the financial downturn greatly exacerbated the nation's immediate fiscal stress, government policies have played a large role in the longer-term economic challenges. The buildup of financial insecurity for individuals and businesses since the 1970s, brought to painfully emphatic clarity by the 2008 financial crash, has citizens of all political persuasions deeply concerned about the future of the Republic. This thesis attempts to explain the historical context which is indispensable to understanding the significance of our current fiscal challenges. In doing so, we come to the conclusion that rising entitlement spending, coupled with severe problems within the nation's tax system, have become the primary drivers of the significant fiscal stress that is building. I argue that the most immediately viable option for reversing this trend, in a way that supports economic opportunity for all, is to implement fundamental tax reform to lift the current system's burdens of complication, inefficiency, and inequity off the shoulders of American taxpayers and businesses. / Master of Public and International Affairs

Yes / The global economy has experienced considerable turbulence since 2007. The financial crisis has been viewed as the trigger for a prolonged period of economic decline. This decline remains an issue for all member states of the European Union, the eurozone and beyond. We argue genesis of this crisis lies in the integration negotiations of 1991, ratified in 1992. These produced a flawed economic model within the eurozone. Given the seeds of decay were planted at origin; we argue the solution can be found through a reconstructed eurozone via looser integration, where countries less equipped to deal with the realities of closer integration will be economically independent.

The 2008 eurozone financial crisis has only worsened as of summer 2011 raising questions about the economic future of the eurozone and sending shock waves through economies around the world. Greece was the first state to receive a bailout from the European Union and the International Monetary Fund, surprisingly followed only six months later by Ireland. The goal of this thesis is to analyze the challenges posed to smaller, weaker economies within the eurozone, specifically Greece and Ireland, since the recent eurozone financial crisis. This study is based on the experiences of both Greece and Ireland as very different members of the single currency. How and why did these states meet the criteria for euro convergence? To what extent was there support for the euro in both countries in the past? To what extent is there support today after the near collapse of both economies and the rescue packages brought about by the EU? As a result of the recent financial crisis, Greece and Ireland are facing difficulties with the terms of European economic and monetary union. Since these smaller economies are, among other reasons, unable to devalue the currency in order to regain economic competitiveness as members of the single currency, they are recognizing that the eurozone's economic structure may not adequately address their national economic vulnerabilities during times of crisis. Because of this and the worsening economic conditions in both Greece and Ireland in 2011, I hypothesize that these states are "fraying" the edges of the eurozone, or increasingly degrading the eurozone's specific economic relationships, and demonstrating this through a growing skepticism of the economic benefits to smaller, weaker economies as members of the eurozone. Additionally, citizens of both states are indicating this skepticism by increasingly separating from the parties and policies that support eurozone membership in their states, as demonstrated by the political shifts in each state since the crisis began. In order to study the phenomenon of "fraying" and address the question of the challenges posed to the smaller, weaker economies and their incorporation into the eurozone, I analyze the effects of the debt crisis in Greece and Ireland in terms of the EU/IMF bailouts, the austerity measures each state took in response to the crisis, and the resulting national political changes. I found that neither Greek nor Irish citizens were unequivocally growing skeptical of their membership in the single currency. In fact, citizens in both states still support the idea of the euro. However, there did appear to be a certain element of dislocation of support between these two states and the eurozone in the aversion each has to the terms of their bailouts. The empirical work to study this question includes secondary scholarly reading, national and supranational monetary and political policy analysis, and analysis of national and supranational economic indicators. The three main topics analyzed in this study are the EU/IMF bailouts, the austerity measures taken in each state due to the crisis, and what may be the resulting national political changes. The effects of the three key issue areas discussed in this thesis are studied in both Greece and Ireland. / Master of Arts

No / This article presents a new perspective for analysing organizational death through the concept of reanimation. Mobilizing recent discussions of the monstrous in organization theory, we draw on the figure of the reanimated monster to analyse an apparent case of organizational dying in the UK financial services sector. Through this, we explore how organizations may neither live nor die, but instead constitute a continual process of reanimation in which organizational spaces and the materials, bodies and narratives surrounding them are recycled, reintegrated and reused to maintain the appearance of the immortal organization. However, reanimation is not merely the clean and efficient synthesis of old and new. There is an unsettling consequence to living and working within the reanimated organization and it is here that the article considers the value of the monstrous for challenging and rethinking established categories of continuity, change, death, life and loss in contemporary working life.

No / This study examines the impact of financial flexibility on the investment and performance of East Asian firms over the period 1994–2009. We employ a sample of 1,068 firms and place particular emphasis on the periods of the Asian crisis (1997–1998) and the recent credit crisis (2007–2009). The results show that firms can attain financial flexibility, primarily through conservative leverage policies and less commonly by holding large cash balances. Financial flexibility appears to be an important determinant of investment and performance, mainly during the Asian 1997–1998 crisis. In particular, firms that are financially flexible prior to this crisis (1) have a greater ability to take investment opportunities, (2) rely much less on the availability of internal funds to invest, and (3) perform better than less flexible firms during the crisis. Our analysis covering the credit crisis period of 2007–2009 suggests that some of the advantages of flexible firms towards investing persist but are significantly less pronounced over that period. We also find that the value of financial flexibility is region/country specific, which may be explained by the fact that different regions/countries often adopt different macroeconomic policies and operate in diverse economic/legal environments.