<p> Since Credit Unions provide low cost financial services to customers that banks do not normally target, the importance of their availability and viability is critic to everyone. Further research is necessary to predict potential trends that can be averted through the hiring process if necessary. The problem to be addressed in this study is that there seems to be a significant financial difference in credit unions in terms of loan delinquency, capital ratio, total loans to total shares, and return on investments between credit unions managed by female CEOs vs credit unions managed by male CEOs. Those affected include the customers, the Board members and the community which the credit union serves. Knowing if gender selection is a factor may assist in the sustainability of the firm. The aim of the study was to provide useful information to stakeholders to provide more opportunities for females in the selection, monitoring, and retention of Credit Union CEOs. A non-experimental quantitative method was used to test archived numerical hypotheses. The archived data included yearly data on loan delinquency, capital ratio, return on investments, and total loans. The data are publicly available from the National Credit Union Administration. The NCUA is an independent federal agency created by the United States Congress to regulate, charter and supervise credit unions. The data was used to compare financial metrics among each credit union. Data was analyzed using descriptive statistics and the Mann-Whitney U Test. The results indicated that there was a significant difference in capital ratio percentages between credit unions managed by female CEOs and were significantly different from credit unions managed by males. The results indicated that for total loans, loan delinquency, and return on investments there was no significant difference in male and female CEOs managing their respective credit unions.</p>

<p> Several commentators argued that the regulatory requirements imposed on community banks over the past 15 years placed an inordinate impact on these entities when compared to their larger counterparts. Specifically, the literature questioned the effect of regulatory costs on Return on Equity, Return on Assets, and Efficiency Ratios in community banks. The communities and small businesses that these banks serve are negatively impacted if these banks continue to disappear due to failure or the result of increased mergers and acquisition activity. This study sought to determine whether a statistically significant correlation existed between regulatory costs, as defined by the combined cost of legal fees, audit expenses, consulting costs, data processing costs, and salary and benefit costs which could be ascribed to compliance personnel, the ROE, the ROA, and the Efficiency Ratios of 21 community banks in the State of Maryland. Based on the results of the correlation analysis, such a correlation does exist. A regression analysis was performed on the independent variable, the cost of regulatory compliance, and the three dependent variables, ROE, ROA, and Efficiency Ratio, for each bank. Of the 63 analyses performed (21 banks with three independent variables) a statistically significant result (where <i>p</i> &lt; .05) was found in all but two instances and in one of those two, <i>p</i> = .053. The implications of this study weighed heavily on the nature of the governance of community banks by legislative and regulatory authorities. The relationship between the regulator and the regulated must be reexamined within the context of community banks. The ability of these institutions to continue to serve often rural communities may depend on how these authorities react to the regulatory burden imposed on community banks in this country.</p><p>

This dissertation consists of four essays on pricing fixed income derivatives and risk management. The first essay presents pricing and duration formulas for floating rate bonds and interest rate swaps with embedded options. It combines Briys et al.'s approximation with the extended Vasicek term structure model to value caps and floors. Using this approach, it computes the durations of caps, floors, collars, floating rate bonds with collars and interest rate swaps with collars, and provides comparative statics analyses of these durations with respect to the underlying variables such as the cap rate, the floor rate, the interest rate volatility, and the level of interest rates. The second essay explores a class of polynomial Taylor series expansions for approximating the bond return function, and examines its implication for managing interest rate risk. The generalized duration vector models derived from alternative Taylor series expansion extend Fong and Fabozzi's M-square model and Nawalkha and Chambers' M-vector model, and the empirical tests show that immunization results can be improved for models g( t) = tα with α less than 1 when higher order generalized duration vectors are used. The third essay develops a methodology to build recombining trees for pricing American options on bonds under deterministic volatility HJM models. Without imposing the HJM drift restriction, our approach uses the Nelson-Ramaswamy transformation to generate recombining forward rate trees. We show that the option prices obtained from our recombining trees satisfy Merton's bond option PDE when step size approaches zero. Numerical simulations provide evidence that this approach is efficient in pricing both European and American contingent claims. The fourth essay obtains computationally efficient trees for pricing European options under two types of proportional volatility HJM models. We construct a numeraire economy in which European options are priced using a maturity-specific equivalent martingale measure. We then show that for the two types of proportional volatility models, European option prices are independent of the forward rate drift under this maturity-specific equivalent martingale measure. Our method is particularly beneficial when used to price long-dated caps, floors and collars because these instruments involve a large number of long-dated puts and calls.

<p>The purpose of this qualitative single-case study was to explore the publicly documented perceptions of the SEC regulators to determine if SOX 404 requirements have been supportive of influencing transparent financial reporting, preventing fraudulent financial statements, or misrepresentation of ICFR. A total of 15 archived, secondary, publicly available documents, representing 15 different SEC regulators? perspectives, were retrieved from the SEC website over a research time frame of July 30, 2002 until November 1, 2010. The samples were explored to identify the common perspectives of the 15 SEC regulators? relative to the effectiveness of SOX 404, and determine the overall perspectives of the holistic SEC entity or single case. Nvivo 8 was used to perform the data analysis and yielded 9 common themes. The findings revealed that although the SEC deemed SOX 404 supportive of influencing transparent financial reporting, preventing fraudulent financial statements, or misrepresentation of ICFR, the Commission was aware that gaps and opportunities for enhancing the law to promote its effectiveness and remove inefficiencies existed. The findings also revealed that the SEC was conscious of the issues, topics, opinions, observations and findings raised by SOX 404 critics and complying companies, and have been attentive, responsive and willing to address to those matters.

<p> This research focused on hawala regulations in multiple jurisdictions, strategies of international bodies to mitigate illicit transfers, and implementation of a standardized approach to monitor money remittances. Transfer mechanisms used to remit funds internationally appeal to individuals, organized crime groups, terrorist financiers, and money launderers. Literature reviewed consisted of government studies, financial body reports, media articles, and peer-reviewed journals. Evaluation of different methodologies and the Financial Action Task Force&rsquo;s supervisory controls was completed. It was determined that economic pressure may impact financial networks and encourage compliance if regional government bodies have the necessary authority to enforce regulations. Research revealed recommendations for education programs to aid jurisdictions in setting up financial intelligence units, developing statutes tailored to their economies, and enforcement of supervisory controls. This report further suggested accountability amongst jurisdictions to reduce the ability of criminals and terrorist financiers to move their financial activities to areas with lax enforcement and corrupt governments that do not enforce regulatory recommendations. It also encouraged tracking financial activity and implementing licensing requirements to mitigate de-risking of high-risk customers with the provision of education to customers and third-parties through formal financial institutions. Reduction of unlicensed money remittances and mitigation of illicit funding benefiting organized crime and terrorism is the ultimate goal.</p>

<p> Digital currency comes in many forms however Bitcoin stands out as the most popular. Bitcoin, released to the public in 2009, remains in the infancy stage of the technology lifecycle. Bitcoin has no regulatory body, central bank or government backing creating doubt as to the digital currency&rsquo;s legitimacy. Despite Bitcoin&rsquo;s lack of &ldquo;official&rdquo; recognition, the digital currency&rsquo;s popularity continues to grow as the number of merchants and vendors accepting the currency expands globally. </p><p> Focusing solely on the U.S. economy and monetary system, the lack of regulation and government recognition leaves legal disputes involving users of Bitcoin in the hands of a U.S. judicial system lacking previous case law as guidance. This research paper provides an in-depth analysis of the technical, economic and regulatory challenges facing the U.S. Federal Court system involving Bitcoin. A qualitative content analysis was employed in the exploratory review of 50 federal judicial cases involving Bitcoin. Key findings include discrepancies between the U.S. Judicial System and the U.S. Internal Revenue System on what and how to categorize Bitcoin, the value of bitcoin mining equipment, and the types of federal cases coming before the U.S. Judicial Courts involving Bitcoin.</p><p>

<p> <i>The Cost of Credit: Protecting Consumers in a Regulated Fringe Credit Market</i> proposes that federal fair lending laws must be expanded to cover more fringe consumer financial products and services to provide protection of lower to moderate income consumers seeking credit. The financial crisis of 2007&ndash;2010 made clear the need for regulatory changes in the overall financial services industry. From the crisis going forward it was made more apparent that there was a greater need to further regulate sectors of the financial services industry that provide alternative sources of credit to American consumers who did not qualify for traditional mainstream credit. The Consumer Financial Protection Bureau (CFPB) was created to address this need for change and implement said changes, but the bureau has fallen short of its mission. </p><p> This paper contends that the CFPB&rsquo;s inaction in regulating the retail rent to own industry is a failure to carry out the bureau&rsquo;s purpose of ensuring that all consumers have access to fair, affordable, and sustainable credit. Ensuring consumers access to fair, affordable, and sustainable credit, specifically lower to moderate income consumer requires that the bureau regulates additional fringe credit markets that fall under its authority. This paper reasons that this regulatory authority comes from the CFPB&rsquo;s power to regulate any provider that offers or extends credit to consumers. This paper makes the argument that the extension of credit in the retail rent own market should be regulated to the same extent that no credit check pay day and title loans are. </p><p> Furthermore, this paper maintains that retail rent to own arrangements, pay day and title loans may be too costly for consumers overtime because they do not help consumers move into the mainstream traditional credit market, but instead keeps them in a cycle of high cost and low benefit borrowing. However, with no alternative credit option for these consumers it is not feasible to prohibit these financial products and services, therefore further federal regulation is essential to protect consumers. Ultimately, this paper provides recommendations to lawmakers that if accepted will further strengthen consumer protections in the consumer credit market.</p><p>

A growing body of evidence has accumulated on the behavior of volatility for pricing data on a variety of different financial assets. Twenty-four-hour currency markets are a particularly useful vehicle for examining the relationship between information and asset volatility--in part because the distinction between public and private information is clearly defined in the foreign exchange market. This study provides a comprehensive examination of the effect of public news on inter- and intra-day exchange-rate return variances. Unlike previous studies, the impacts of both U.S. and foreign macroeconomic news announcements are examined in the spot and futures currency markets--for the yen, pound, and mark. The relationship between news and volatility is first examined using variance ratio tests over trading and non-trading periods. Second, diffusion and jump-diffusion process models are developed which contain parameters conditional on the release of news. These models are estimated using the method of maximum likelihood and are compared to equivalent unconditional models using likelihood ratio tests. Results from this study provide insight into the relationship between public information and currency market volatility. Variance ratio tests indicate that U.S. news releases have a greater impact on currency variance than foreign news releases. In addition, trading/non-trading variance patterns are found to differ between the spot and futures markets--particularly for the yen. Market liquidity differences and the timing of public news announcements are shown to be factors which can explain whether the spot or futures markets reflect the arrival of public information first. The impact of public macroeconomic news releases on volatility is also shown to be concentrated in the period immediately surrounding the announcement. Maximum-likelihood estimation of diffusion and jump-diffusion process models reveals that simple models, conditional on ex ante macroeconomic news announcements, better explain the currency return generating process than equivalent unconditional models. Over the period studied, merchandise trade balance and industrial production announcements had a greater impact on volatility than money supply or inflation announcements. Finally, the correlation between the yen, pound, and mark was highest on days of U.S. macroeconomic news.

This dissertation (consisting of two essays) analyzes the impact of policy measures used to control the risk-taking behavior of banks. Specifically, the first essay explores the impact of increasing the required minimum capital to asset ratios on the riskiness of banks' assets. The second essay deals with the development of a risk-based deposit insurance model in consonance with the bailout policy of Federal Deposit Insurance Corporation (FDIC). Increasing the prescribed minimum equity to assets ratio (capital requirement) has been proposed as an alternative for mitigating the problems created by the current fixed deposit insurance scheme. The impact of such a policy on the risk preferences of a banks' shareholders has been vigorously debated. Would the banks' shareholders respond to an increase in the capital requirement by allowing the riskiness of the banks' asset portfolios to decline or would they react by increasing the risk level of the composition in an attempt to maintain the same or similar level of expected rate of return? This study attempts to resolve this issue by empirically examining the impact of the Basle Accord (which proposes risk-based capital requirements). Empirical results indicate banks' preference for risk are likely to be increased. The second essay focuses on the reform of the current fixed deposit insurance scheme. A theoretical model for estimating the bank insuring agency's liability and hence the risk-adjusted deposit insurance premium of a bank is derived. The model utilized here is an application of the Flexible Writer Extendible Put Option. In contrast to previous studies, the model applied here explicitly incorporates the FDIC's bailout policy (characterized by the lack of inclination on the part of FDIC to close low or negative net worth depository institutions). This distinction is significant as regulatory forbearance was originally a significant contributor to deposit insurance fund losses.

The number of multinational banks (MNBs) has increased in Central Europe, while the amount of real credit has decreased. This dissertation investigates whether there is a causal link between increased international financial competition (IFC) and the decline of real credit in Poland and Hungary, and what the impact of declining real lending is on investment across industries. First, based on the Hungarian and Polish experiences I analyze whether there is a link between greater IFC and less real credit. I provide an argument that links the number of MNBs to capital levels for domestic banks, and hence to their lending capacity. I test this argument empirically using data from central banks, central statistical offices, and private institutions, and exploring alternative explanations for declining real credit. The evidence suggests that Polish and Hungarian banks are placed in a paradoxical situation since greater IFC raises their need for capital, but also limits their ability to attract it. The evidence indicates further that the efficiency increases from competition do not outweigh the limits on domestic banks' capital, which in turn helps to explain the decline in real credit. Second, I use panel and time series data to test whether early IFC has partially caused declining real lending. I test this hypothesis based on a credit supply function for domestic banks, and on data for 9 regional and 5 specialized Polish banks for 39 months. The estimation results indicate that domestic banks increase lending in anticipation of greater international financial competition, but that they decrease their lending once MNBs have established operations. As a net result of these two effects the supply of credit declines. Third, I study how the decline in real credit has affected the amount of investment in Polish industries. I use a model that links finance and investment, and a data set of 23 observations for 25 industries. The panel estimation results suggest that internal and external finance are significant in determining investment, and that industries prefer internal over external finance.