Division One: “Malthus Gets Fat” (Two Chapters) Chapter One develops a simple dynamic model to examine the takeoff from a Malthusian economy to a modern growth regime. It finds that several factors, most notably the rate of technological progress and the economic structure, determine the fastest rate at which the population can grow without declining living standards; this is termed maximum sustainable population growth. It is only when this maximum sustainable rate exceeds the peak rate at which a society expands that takeoff can occur. I also investigate the effects of trade and international income transfers on the ability to sustain takeoff. It is also shown that present income growth is not necessarily indicative of the ability to sustain takeoff and that factors which increase current income growth may actually inhibit takeoff, and vice versa. Chapter Two applies the sustainable population growth framework to Britain during the Industrial Revolution. The model shows a dramatic increase in sustainable population growth at the time of the Industrial Revolution, well before the beginning of modern levels of income growth. The main contributions to the British breakout were technological improvements and structural change away from agricultural production. At least until the middle of the 19th Century, coal, capital and trade played a minor role. Division Two: “Leverage and Financial Market Instability” (Four Chapters) Chapter One develops a model of how leverage induces explosive behavior in financial markets. I show that when levered investors become too large relative to the market as a whole, the demand curve for securities can suddenly become upward-sloping as levered investors are exposed to forced liquidations. The size and leverage of all levered investors defines the minimum elasticity-adjusted market size for stability or MinEAMASS, which is the smallest elasticity-adjusted market size that can support the group of levered investors analyzed. This gives rise to a measure of instability that can predict when markets become vulnerable to a leverage-driven market liquidity crisis. Chapter Two iterates the model of Chapter One forward in time to generate an inflating bubble that suddenly bursts, reproducing many of Kindleberger's (1996) stylized facts about the dynamics of bubbles in a simple framework. Chapter Three applies my measure of instability in a historical investigation of the 1998 demise of hedge fund Long-Term Capital Management (LTCM). I find that a forced liquidation of LTCM threatened to destabilize some financial markets, particularly for bank funding and equity volatility. Chapter Four discusses how the model applied to the stock market crash of 1929. There the evidence suggests that a tightening of margin requirements in the first nine months of 1929 combined with price declines in September and early October caused enough investors to become constrained that the market was tipped into instability, triggering the sudden crash of October and November.

The recent financial and economic crisis led to a deepening of fiscal problems in many countries all over the world. European countries were also hit hard by the economic downturn. The critical situation in Greece and its negative impact on the economic situation in the whole Euro zone has brought up many questions about the rigidity and functionality of the euro concept. A majority of economists and politicians support the idea of saving the Euro zone since the break up would be quite costly. There are many ideas regarding a solution to the current situation, and one of the most radical is the introduction of a parallel currency in the states which are trapped in the debt crisis. The aim of the thesis is to take a critical look at the historical development of different approaches to this theme with a focus on theories based on the devaluation as the solution. The parallel currency theory is compared to Euro zone break-up scenario and hard restructuring option and the positives and negatives of each approach are analysed. Finaly the simulation on the Greeek case is performed to prove or diproved the positive effects of parallel currency establishment. JEL Classification E31, E42, E52, E63, F15, F36 Keywords Parallel currency, financial crisis, the euro, the European Union, the Euro zone

Master Thesis - Simona Tothova Abstract This thesis empirically investigates impact of countries' bailouts on probability of SME segment distress. The impact is examined by multi-period logit model where dependent variable is distress rate and explanatory variables includes self-constructed bailout variable, several binary predictors and firm-specific and macroeconomic control variables. The hypotheses are tested on dataset for period from 2005 to 2013 including observations from seven European countries which received financial assistance program (bailout) from Troika. Every bailout from Troika comes with the requirement for austerity measures and our results suggest that impact of bailouts on SMEs probability of distress are depended on the success of application in individual countries and the impacts are more positive in non euro-zone countries. Keywords Bailout, Financial crisis, Credit risk, SME segment, Distress rate Author's e-mail tothova.simona@gmail.com Supervisor's e-mail rado.parrak@gmail.com

The thesis focuses on the impact of the banking regulation Basel III on bank-intermediated trade finance. The theoretical part of the thesis explains details of Basel III requirements, history of Basel Accords and their future in the form of Basel IV, characteristics of trade finance products and of the whole industry. Trade finance industry voiced worries about the negative effect that these new requirements might have on trade finance business. The thesis estimates determinants of bank-intermediated trade finance and includes a regulatory variable. We use trade finance data from the Czech Republic and Hong Kong in 2000−2014 and from India in 2007−2014. A negative effect of Basel III on trade finance growth is found using pooled OLS regression. Contrary to previous research, we also estimate a negative coefficient of banks' capital to assets ratios. To the best of our knowledge, the thesis provides the first empirical analysis of the impact of Basel III on trade finance. Trade finance research usually focuses more on the relationship of trade finance and trade flows and the thesis provides an extensive literature summary of this topic. The final part of the thesis contrasts different levels of risk of trade finance and shows that the imputed low-riskiness does not apply to the Czech data.

Baselregelverket är en samling råd och riktlinjer som har som mål att skapa finansiell stabilitet för banker världen över. Det finns i tre omfattningar och efter finanskrisen år 2008 påbörjades ett betydande reformarbete av Basel II efter att banker inte fångade upp riskerna i tillräckligt stor utsträckning. Med ökade kapitalkrav och en förbättrad riskhantering hos bankerna har Baselkommittén som mål att de tidigare bristerna med regelverket inte ska upprepas. Detta har medfört stora interna organisatoriska förändringar för bankerna. Syftet med den här uppsatsen är att undersöka hur finanskrisen år 2008 och reformarbetet av Baselregelverket påverkat chefers handlingsutrymme på svenska banker, där begreppet handlingsutrymme utgår från managerial discretion som handlar om chefers handlingsfrihet under påverkan av externa faktorer. Studien kommer därmed att bidra med en ökad förståelse för regelverket och lyfta fram personliga uppfattningar om hur regelverket har påverkat cheferna.   Kandidatuppsatsen är baserad på en kvalitativ forskningsmetod där vi utförde semi-strukturerade intervjuer med åtta respondenter med chefserfarenhet från svenska banker. Empirin som vi har fått fram tyder på att cheferna upplever ett minskat handlingsutrymme som en påföljd av mer komplexa regelverk. Det har blivit mer komplicerat för cheferna i dag jämfört med innan krisen att styra bankernas dagliga verksamhet på grund av ökade krav på regelefterlevnad och noggrannare uppföljning av riskmätning och kapitalkrav. Vi har även kommit fram till att cheferna upplever förändringar i sitt handlingsutrymme beroende på faktorer som exempelvis bankens storlek och deras införande av olika internmetoder. / The Basel Accords are a collection of advice and recommendations that strives to establish a financial stability of banks all over the world. The accord exists in three versions and after the financial crisis 2008 a considerable reform was established of Basel II due to the fact that previous versions did not accurately handled risks well enough. With the increasing capital requirements and improved risk management at banks, the Basel Committee on Banking Supervision wants to ensure that the previous flaws with the accord will not be repeated. This has resulted in big organizational changes for the banks. The purpose of this paper is to investigate how the financial crisis 2008 and the reform of the Basel Accord that followed have affected the latitude of managerial action of the managers in swedish banks, which is based on managerial discretion that mean changes in managerial roles under influence of external factors. The study will thereby contribute with an increased understanding for this accord and point out personal perceptions of how the regulation have affected the managers.   This bachelor thesis is based on a qualitative research where we performed eight semi-structured interviews with respondents having managerial experiences from swedish banks. The empirical data we have obtained shows that managers perceive a reduced latitude of managerial action as a consequence of more complex regulations. It’s more complicated for managers today considering how it was before the crisis to control the daily operations of the bank because of the increased demand for compliance and a stricter monitoring of risk measurement and capital requirements. We have also concluded that managers are experiencing different changes in the latitude of managerial actions depending on factors such as the bank’s size and how they introduce the various internal methods

A financial crisis in 2007 changed the development of the global financial system. A lot of financial innovations, although they cannot be considered the only reason of the crisis, affected the critical situation reasonably. The initial crisis of the financial system soon transferred into real economy. German banking system suffered from negative effects of the financial crisis. The federal government sets up a Special fund for stabilization of the financial market (Soffin) to help the financial sector. Germany is the second largest exporter in the world and the fall of the foreign demand meant a depression of its export. The Czech financial system (banking) was not affected too seriously during the initial period of the financial crisis. The main reason of this was that the majority of Czech banks are controlled by foreign subjects which meant that risky businesses were implemented by principal companies. The crisis transferred into real economy through the channel of foreign trade.

The thesis dwells on the state interventions that governments and central banks had to implement in relation to the recent financial crisis and that were focused on stabilization and revitalization of the financial sector. The most attention is dedicated to anti-crisis interventions and the subsequent development in the United States. The first part explains the principles of banking regulation, the main causes of the crisis and the way it spread. The second part illustrates the concrete anti-crisis measures - extraordinary liquidity facilities, bailouts of leading financial institutions, distressed assets buyout, quantitative easing, etc. The third part then, with the aid of market indicators, analyzes the restoration of the standard functions of financial markets and presents an overall assessment of the effectivity and the risks of the realized interventions.

The thesis is aimed at explanation of the factors that led to the creation of the current financial crisis in their mutual context. Emphasis is placed on the way of providing mortgages in the USA, policy of FED and credit derivatives. The impacts of the crisis on banking, stock and commodity markets, building industry and automotive industry are discussed as important determinants of international trade. It is shortly mentioned how countries like Germany, China or Czech Republic dealt with the crisis. The final part of the thesis is devoted to the impacts of the crisis on international trade, these impacts result from the issues that are described in the first two parts. Discussed are the commodity and territorial structures of the international trade during the years of crisis. Also the impacts on the foreign trade of the Czech Republic are stressed.

1 Abstract In this thesis, we present an empirical analysis of integration between the Baltic and global stock markets during the period between 2000 and 2018. This research is spurred by the fact that all three Baltic countries displaying similar positive economic developments over the studied horizon. Using the theoretical and empirical findings from similar research papers, we ground our work for the analysis. Our methodology is based on three different models: DCC-GARCH, total and frequency connectedness, and the Engle-Granger cointegration test. Using these methods, we are able to determine both short- or long-term relationship dynamics. Based on the results from our empirical analysis we were not able to reject the null hypotheses, that the Baltic states have become more integrated between themselves and the global market. At best, our results would suggest a weak form of integration given that there were indeed some notable dynamic changes. Following these results, we provide insight on interdependencies between the Baltic states and their relationships with the global stock markets. Most notable dynamics are captured by the total connectedness measure, which indicates that the Baltic stock markets show a significantly increased connectedness with the global indices, during turbulent times in the...

Dans cette étude, nous essayons de combler le fossé entre deux courants de la littérature. Tout d'abord, nous menons une enquête approfondie sur les relations entre la liquidité et la baisse du marché dans un pays émergent (Brésil). Dans notre recherche, nous suivons la méthodologie utilisée par Hameed et al (2010) et Adrian et al (2011). Dans la première partie de l'étude, en utilisant la variable d'estimation de la mesure de liquidité proposée par Corwin et Schultz (2012), nous effectuons une analyse des séries temporelles pour estimer l'effet des rendements sur le marché des rentabilités individuelles, et l'impact de la crise sur la liquidité. Nous étendons en outre notre analyse à la liquidité des financements, mesurée par l'écart de la rémunération entre les "commercial papers" et le taux de base de la banque centrale, pour estimer l'effet de la baisse du marché lorsque les spéculateurs sont confrontés à une contrainte de financement. Dans la deuxième partie de notre recherche nous nous intéressons aux facteurs de la liquidité. Nous estimons l'effet de la liquidité du marché sur liquidité idiosyncrasique, et examinons si cet effet est amplifié dans le contexte de baisse importante des marchés. Dans la troisième partie de la thèse, nous répartissons les actions en trois portefeuilles equi-pondérés en fonction des pratiques de gouvernance d'entreprise différentielles. Nous effectuons l'analyse mentionnée ci-dessus pour estimer si la liquidité des entreprises ayant des pratiques de gouvernance d'entreprise différentes réagit différemment en présence de baisse importante des marchés et de spirales de liquidité. / In this study we try to bridge the gap between two strands of literature, first we conduct a thorough investigation about relation between, Market liquidity, funding liquidity and market declines in an emerging market i.e. Brazil. Then we conduct the analysis in the context of differential corporate governance practices and try to find if higher corporate governance practices have an effect on liquidity and how it affects stock liquidity in market declines. We closely follow the methodology used by Hameed et al (2010) and Adrian et al (2011). In the first part of the paper, using the High-Low spread estimator proposed by Corwin et Schultz (2012) as our liquidity proxy, we conduct a time series analysis to estimate the effect of individual returns market returns, and large market declines on liquidity. We further extend our analysis to include funding liquidity, measured by the spread between the commercial paper and the central bank rate, to estimate the effect of market declines when speculators face a funding constraint. In the second part of our analysis we move towards liquidity commonality. We estimate the effect of market wide liquidity movements on individual stock liquidity, and whether this effect is amplified in the context of large market downturns. In the third part of the paper we sort the stocks into three equally weighted portfolios based on differential corporate governance practices. We conduct the above mentioned liquidity analysis to estimate if liquidity of firms with differential corporate governance practices react differently in the times of large market downturns and liquidity spirals.