In this study, we use a sample of 228 financial firms over the period of 2007-2012 to examine the impact of voluntary adoption of clawback provisions on these firms’ risk-taking behavior. We find that financial firms exhibit a significant reduction in risk after adopting clawback provisions. The financial firms also exhibit a significant decrease in the volatility of ROE, total return risk and idiosyncratic risk. The reduction in risk is mainly driven by the improvement in the volatility of return on assets and subsample of banks and brokers. In addition, we find that financial firms are less likely to adopt clawback provisions with higher management and director ownership, more insiders on the board, and whose CEO is not the chairman of the board. / February 2017

D.Com. (Business Economics) / A clear distinction should be made between the straightforward financing of a project and project finance itself. In short, project finance can be defined as the financing of a particular economic unit with the aim of the financial structuring to be such that there is as little recourse as possible to the sponsor of the project and the lender is thus satisfied to look at the cash flows and earnings as the source of repayment and the assets of the project as security. Usually, project finance would incorporate all or some of the following characteristics namely, off balance sheet financing, recourse limited to the pre-commissioning stage, an element of fixed rate debt, utilisation of tax allowances, optimisation of tax position, long term finance and some degree of foreign exchange activity. If the project is sponsored by an existing company, it will be looking to maximise debt, minimise recourse and group tax liability, optimise financial costs and retain or improve financial ratios after consolidation of the project. However, the degree of project financing appropriate for any project depends on what lenders are prepared to accept and what sponsors are prepared to provide in order to let the project become a reality. The project financier's role is to formulate financial structures, assess financial feasibility, develop funding proposals, secure sources of finance and to manage the financing facilities once they are in place. A project sponsor employs a project financier because the latter is objective, impartial, has access to required information and is able to process it into a professional presentation to the financial community, has the experience and expertise to advise on the most appropriate and cost effective financing structure and is best equipped to perform a thorough project financial analysis. This study has been undertaken to point out the differences between project finance and finance for a project, to identify the role of project financier and is as such largely concentrated on the financial side of a project. The goal was to discuss the importance of project finance from the financial institutions' viewpoint and to identify those aspects that would be important to a project advisor or lender. Although relatively little has been published on project finance, it is a multidisciplinary subject and references have been used wherever available. The author's attendance at seminars on the subject, as well as discussions with international project financiers and bankers have also contributed to the understanding of the subject. In addition to an in-depth exposure to project finance in South Africa, several months have been spent with an international bank's project finance division in London.

M.Com. (Business Management) / Talent commitment, efficiency and retention issues are emerging as the most important corporate challenges of the present and immediate future, driven by talent loyalty concerns, corporate reorganization efforts and stiff competition for key talent. For most organizations, “surprise” talent departures can be devastating on the execution of business strategy and the achievement of business goals and objectives. This phenomenon is most prevalent now in light of current economic uncertainty and following corporate downsizings when the risk of losing critical talent increases exponentially. Talent retention is one of the greatest challenges confronting many business organizations today. For most organizations talent recruitment and retention is a major concern as the ability to keep talent is crucial for the organization’s performance and future survival. It is recognized that talent turnover, is a critical challenge to most organizations that cost money, effort and energy. This challenge poses major problems to HR professionals in their efforts to formulate talent retention policies. South Africa has for the past few decades seen an influx of foreign investment, ideas and practices, facilitated by the development of the Internet and associated technologies. As with many organizations worldwide including organizations in South Africa, staff retention problems affect organizational productivity and performance. The global war for talent has increased the challenge to most organizations in attempting to address the issue of talent retention in the context of increasing competition in the global marketplace. It is against this background that this research will look into talent retention problems within the socio‐economic context of South Africa and in particular factors impacting on talent retention at Alexander Forbes as an organization. This study brings into focus the extent to which factors impacting on talent retention such as pay and compensation, career development, leadership, working environment and organizational commitment as discussed in the literature review impacts talent retention within Alexander Forbes.

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, In partial fulfilment of the requirements for the degree of Master of Management (Finance and Investment), March 2016 / DFIs play a very important role in economic development of most countries. In South Africa (SA), they have an additional role of addressing socio-economic development and transformation problems that were created by the previous Apartheid system. In particular, DFIs in SA address unemployment, redistribution of income, private sector development and manufacturing sector growth. However, it is not clear whether these DFI’s are having a positive impact on the socio-economic transformation as they are expected to, given the amount of money that the government budget for them each year. The aim of this research is to investigate whether SA DFI’s have significant impact on the country’s socio-economic development and transformation. DFI credit extension is found to have positive and significant impact on economic growth in in both South African and in emerging markets. Also, in both South Africa and in emerging markets, government consumption has negative impact on economic growth. An additional analysis further shows that DFI credit extension promotes increase in manufacturing-toGDP in SA and in other emerging markets. DFI has significantly positive impact on HDI in South Africa but not in emerging markets. There is a positive (albeit not significant) impact of DFI credit extension on poverty in South Africa, worse still, the relationship is significantly negative in other emerging countries. The results show that the government should bolster the DFI funding as these DFIs play a significant role in the economic development of the country. / GR2018

Thesis advisor: Philip E. Strahan / In the first essay of this dissertation, I study the information synergies between deposit-taking and lending activities of large banks. I use the influx of Chinese international students into US universities to identify a local deposit shock. I find that banks that are more exposed to this shock increase their local credit supply in small business loans, but not mortgages. The results support the notion that deposit can be informative: it conveys signals about local economic activities. Such information affects banks expectation about future local demand and thus banks’ lending decisions. The second essay investigates the relationship between banks geographic concentration and liquidity risk management. I find that geographic concentrations measured on different sides of banks’ balance sheet have opposite effects on banks’ liquidity risk management behaviors during the 2007-2009 liquidity crisis. The overall results are consistent with the view in the literature that geographic concentrated banks invest more in soft information production. / Thesis (PhD) — Boston College, 2018. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

A melhoria de processos e práticas de gestão tornou-se essencial aos bancos que operam no Brasil, em presença da rápida evolução das atividades econômicas e do mercado de crédito. Diante disso, a Controlaria, bem como as informações por ela disponibilizadas, ganha mais espaço e importância nas instituições financeiras. Nesse sentido, este trabalho teve como principal objetivo verificar se, e em que medida, as práticas de Controladoria dos maiores bancos que operam no Brasil se refletem em uma Estrutura Conceitual Básica de Controladoria (ECBC). Dessa forma, realizou-se uma revisão da ECBC proposta por Borinelli (2006), com uma complementação das funções e atribuições da Controladoria voltadas para instituições financeiras, de acordo com literatura específica sobre esse assunto. Também foi realizada uma pesquisa empírica, a qual se utilizou de entrevistas e questionários, para investigar a aplicação da teoria na prática de Controladoria dos maiores bancos que operam no Brasil, bem como uma análise da aderência dessas práticas à ECBC. No que diz respeito aos achados deste trabalho, quanto às funções gerais da Controladoria atribuídas pela ECBC, verificou-se que as funções de Contabilidade Societária, Contabilidade Fiscal, Gestão das Informações e Atendimento a Usuários Externos, são funções típicas da área de Controladoria nos bancos pesquisados, o que está aderente às recomendações feitas pela ECBC. Entretanto, as funções de Riscos, Controles Internos e Finanças não foram apresentadas pelos bancos pesquisados como desempenhadas pela área de Controladoria, sendo essas inconsistentes com a sistematização da ECBC. Além das funções gerais, este trabalho, igualmente, investigou o papel da Controladoria em processos específicos nas instituições financeiras. As respostas obtidas mostraram que, para os processos de Orçamento, Mensuração, Análise e Controle de Custos, bem como no Planejamento Tributário, a Controladoria é considerada como a área responsável ou coordenadora. Porém, para os processos de Planejamento Estratégico, Análises de Ambientes e Viabilidades, Avaliação de Desempenho e Controle de Riscos, a Controladoria não é considerada como responsável ou coordenadora desses processos e, em muitos casos, apenas fornece apoio/suporte informacional, não aderindo à ECBC. Não obstante, optou-se, ainda, por estratificar os dados obtidos entre diferentes grupos de instituições, o que permitiu realizar uma comparação da prática de Controladoria entre os grupos distintos. O que se encontrou, nessas estratificações, foi que a prática de Controladoria de alguns grupos parece ser mais aderente aos elementos que integram a ECBC, do que em outros grupos, sem que, entretanto, algum grupo pudesse refletir, completamente, esses elementos na prática. Por fim, conclui-se que os resultados encontrados evidenciaram que as práticas de Controladoria dos maiores bancos que operam no Brasil refletem, parcialmente, os elementos que integram uma Estrutura Conceitual Básica de Controladoria. / Improving management practices and processes has become an essential need for banks operating in Brazil, due to the fast-paced evolution of the economic activities and the credit market. In this context, Controllership, as well as the information it provides, has gained increased importance and prominence within financial institutions. In this sense, the main goal of this paper is to verify if and to what extent Controllership practices adopted by major banks in Brazil reflect a Basic Conceptual Structure of Controllership (Estrutura Conceitual Básica de Controladoria - ECBC). To that end, a revision of the ECBC proposed by Borinelli (2006) was carried out, including Controllership functions and duties aimed at financial institutions, as per the specific literature on this topic. An empirical research was also conducted through interviews and questionnaires in order to investigate and analyze how Controllership practices in major banks with operations in Brazil reflect the theory and adhere to the ECBC. The findings of this paper regarding general Controllership functions laid out by the ECBC reveal that Corporate Accounting, Tax Accounting, Information Management and External User Service are typical activities for the Controllership area in the banks investigated, which complies with the ECBC recommendations. On the other hand, functions regarding Risks, Internal Controls and Finances were found not to integrate the activities performed by the Controllership area in the banks investigated, which is inconsistent with the concepts systematized under the ECBC. In addition to the general functions, this paper also investigates the role Controllership plays in specific processes within financial institutions. The answers given reveal that Controllership is considered to be the area that leads and coordinates processes as Budgeting, Measurement, Costs Analysis and Control, as well as Tax Planning. However, Controllership is not considered to be the area that leads and coordinates processes regarding Strategic Planning, Environment and Viability Analyses, Performance Assessment and Risk Control, simply providing information support in many cases and thereby not adhering to the ECBC. Furthermore, there was an attempt to stratify the data obtained into different groups of institutions, which enabled a comparison of the Controllership practices across the groups. These categories showed that the Controllership practices of some groups seem to be more consistent with the ECBC elements than others, which does not indicate that any group could fully reflect these elements in practice. Finally, the results support the conclusion that Controllership practices in major banks operating in Brazil partially reflect the elements that comprise the Basic Conceptual Structure of Controllership.

This dissertation studies the demand and supply of liquidity with a particular focus on the financial intermediation sector. The first essay analyzes the role of financial intermediaries as suppliers of inside money. The demand for money arises from the needs of nonfinancial corporations to buffer liquidity shocks. The dynamic interaction between inside money supply and demand gives rise to a mechanism of financial instability that puts the procyclicality of intermediary leverage at the center. Introducing outside money, in the form of government debt, can be counterproductive, as it may amplify the procyclicality of inside money creation and intermediary leverage, making booms more fragile and crises more stagnant. The second essay addresses an issue that is left out in the first essay -- the interaction between money and credit. It offers a model of macroeconomy where intermediaries are needed for both money and credit creation. Specifically, entrepreneurs hold money to finance new projects, while intermediaries issue money backed by investments in existing projects. The complementarity between money and credit arises from financial frictions and amplifies economic fluctuations. In the third essay, my coauthors and I model the liquidity demand of banks. To buffer liquidity shocks, banks hold central bank reserves and can borrow reserves from each other. The propagation of liquidity shocks, depend on the topology of interbank credit network, but more importantly, on the type of equilibrium on the network (strategic complementarity vs. substitution). The model is estimated using data on reserves, interbank credit, bank balance sheets, and macroeconomic variables. We propose a method to identify banks that contribute the most to systemic risk, and offer policy guidance by comparing the decentralized outcome with the choice of a benevolent planner.

I study financial intermediation and optimal regulation through the lens of banking theory and applied corporate finance. In my understanding, the theory on banking is primarily the theory on bank runs. And the key questions I have been pursuing to answer are the causes of runs in both the traditional and shadow banking sectors and the roles of the market and the regulator in maintaining financial stability. I start with the shadow banking system outside the traditional regulatory framework, which accumulated tremendous risks and led to a major financial crisis. Why don’t we simply shut down the shadow banking sector? Chapter 1 examines the role of shadow banking and optimal shadow bank regulation by developing a bank run model featuring the tradeoff between financial innovation and systemic risk. In my model, the traditional banking sector is regulated such that it can credibly provide safe assets, while a shadow banking sector creates space for beneficial investment opportunities created by financial innovation but also provides regulatory arbitrage opportunities for non-innovative banks. Systemic risk arises from the negative externalities of asset liquidation in the shadow banking sector, which may lead to a self-fulfilling recession and costly government bailouts. Heavy regulatory punishment on systemically important shadow banks controls existing systemic risk and has a deterrent effect on its accumulation ex ante. My paper is the first to formalize the designation authority of a macro-prudential regulator in systemic risk regulation. I then switch from the assets side to the liabilities side on the bank’s balance sheet. Chapter 2 introduces informed agents to the banking model and proposes a novel role of deposit insurance in fostering market discipline. While the moral hazard problem brought by deposit insurance weakens market discipline, I show that the opposite can be true when the insurance stabilizes uninformed funding and increases the benefits of monitoring through information acquisition. Knowing the bank asset type, informed depositors utilize the demand deposits as a monitoring device and discipline the bank into holding good assets. However, self-fulfilling bank runs initiated by uninformed depositors erodes the future returns, inducing more depositors to forgo information acquisition and act like uninformed depositors. A novel role of deposit insurance emerges from the strategic complementarity between monitoring efforts and stability of uninformed funding. A capped deposit insurance, by stabilizing the retail funding of the bank, restores wholesale depositors’ monitoring incentives and benefits market discipline. I examine the role of information in generating bank runs in Chapter 3, where I explore the relationship between redemption price and run risks in a model of money market fund industry. Money market funds compete with commercial banks by issuing demandable shares with stable redemption price, transforming risky assets into money-like claims outside the traditional banking sector. Floating net asset value (NAV) is widely believed a solution to money market fund runs by removing the first-mover advantages. In a coordination game model a la Angeletos and Werning (2006), I show that the floating net asset value, which allows investors to redeem shares at market-based price rather than book value, may lead to more self-fulfilling runs. Compared to stable net asset value, which becomes informative only when the regime is abandoned, the floating net asset value acts as a public noisy signal, coordinating investors’ behaviors and resulting in multiplicity. The destabilizing effect increases when investors’ capacity of acquiring private information is constrained. The model implications are consistent with a surge in the conversion from prime to government institutional funds in 2016, when the floating net asset value requirement on the former is the centerpiece of the money market fund reform.

One of the reasons for firms decentralising aspects of their operations is to enable managers to gain specialised knowledge of local conditions. For credit managers in a banking firm, this may take the form of knowledge of investment opportunities and the risk profiles of each of these opportunities. In light of principal-agent problems that arise when information is asymmetrical, the focal point of this dissertation is the development of incentive-compatible mechanisms that facilitate the free and accurate disclosure of the private information of managers on the risk profile of investments to the centre of the bank at the time investment decisions are being implemented. These mechanisms are required because managers may have strong incentives to misrepresent their private information when doing so has the potential to favourably impact on the size of their remuneration. This, in turn, has a direct impact on the ability of the centre to optimally allocate the capital of the bank and effectively price risk into bank investments. The dissertation commences by examining which internal risk measures act to align the investment decisions of managers in a bank with the risk/return goals of the centre of the bank. This requires knowledge of the bank risk preference function. It is initially assumed that managers have developed specialised knowledge of the opportunity set of available investments, and have no reason to misrepresent this information to the centre. This assumption is later removed and the implications assessed. In order to ensure incentive-compatibility between the centre and managers, a truth-revealing mechanism is employed in the capital allocation process and tied to the compensation payment function of the bank. This mechanism acts to ensure managers disclose their private information on the expected risks and returns in the investments under their control, and facilitates the efficient investment of capital within the bank. / Doctor of Philosophy (PhD)

Financial experts from various financial institutions are often seen in media. Media’s objec-tive towards the society is to report occurring events of interest to its audience. Media ap-pearances through giving expert opinions, is for financial institutions costless and a reason-ably effective way of promoting their top analysts and strategically position their firms. For the financial institutions, there exists competition for being allowed to participate and give expert reports when media is in need for a comment, and therefore a media strategy is con-sidered required. The purpose, used as guidance in this thesis, is to describe the Swedish financial media en-vironment and analyze why certain financial institutions are more active than others. The method when conducting research in this thesis is a combination of both an inductive and deductive approach. The underlying factor behind this choice, rests in the strive to ful-fill the purpose in most satisfying manner and receive as valid and reliable data as possible. The study also uses both quantitative and qualitative data. Statistical research in media companies’ databases and interviews with persons with key positions at the financial insti-tutions has been conducted. The thesis stresses the fact that the broadcasting companies approach strategies towards the Swedish financial industry differently. However, this thesis proves that another reality governs. In truth, all the broadcasting companies have common references for the most appealing financial expert when asking for expert opinions. The financial institution’s standpoints differ in the area of media appearance. The thesis concludes that financial institutions with the most prominent desire to participate and comment a broad range of financial segments in media are proved to be successful in this area. In general though, as a financial institution on the Swedish market, this thesis shows no correlation between having an outspoken media strategy and being successful in this field. This thesis concludes that when discussing which financial institutions that is more suc-cessful than others, the size of the company is important to take into consideration. The study has also proved that financial experts, often equivalent with the analyst, are appeared to be vital for any financial institution in order to succeed in media.