This research attempts to increase the academic understanding as well as the managerial practices of the financial services marketing positioning in the crossnational field. In order to achieve this objective the research developed a conceptual framework of the small business' bank selection criteria and tested it on the small business banks' customers in two culturally different countries (Egypt and UK). This proposed framework was developed based on deduction, derived from the literature on positioning, branding and selection criteria, and induction, derived from two waves of exploratory pilot interviews in both countries. The research is divided into three main parts. The first part introduces the literature review, where the issues of positioning, branding and bank selection criteria were emphasised, ending with developing the proposed framework for small business' bank selection criteria. The second part deals with the empirical study, where the research design was explained and justified, the research hypotheses were developed, a multiface comparison between Egypt and the UK was presented, and finally the methodology adapted in this research was explained. This depends on the "mixed methods approach, dominant-less dominant design", i.e. depending on the qualitative methodology (in-depth interviews) in developing the "derived Etics view" as well as the research hypotheses, while the main part of the research is depending on quantitative methodology (sample survey based on structured questionnaire in both countries). The third part presents the data analysis in three chapters, while the first one deals with the descriptive and methodological issues, the second and third present the findings and the hypotheses testing results. The main results of this research emphasis that the bank selection decision could be better understood by the suggested conceptual framework. There are a lot of interfaces between the segmentation, positioning, branding, service quality, interactions, pre- and post purchase criteria, and a lot of integrated work is needed in order to gain a competitive advantage. Finally in general similar marketing positioning strategies could be adopted in the two studied countries on the banks' small business customers, as similar clusters of small business customers were identified. The adopted positioning strategy needs some minor adaptations in each country in order to get the desired objectives and work more effectively.

Understanding the mechanism through which monetary policy affects real economic activity is a very important issue for attaining macroeconomic stability. Financial innovations during the last two decades and imperfections in the financial markets make this mechanism more complicated. The link between policy and real activity can be better understood by taking into consideration the variety of financial assets, agency costs, micro level information involved in financial transactions and identification of supply and demand effects. We provide a theoretical review where monetary policy affects the real activity not only through the traditional 'interest rate channel' but also by changing the financial positions of firms. In this framework, we identify the responses of firms with various characteristics to monetary policy shocks through the financial accelerator where credit market conditions amplify and propagate the impact of monetary shocks on real activity of financially weak and small firms. Agency costs and other informational problems are more influential on the availability and cost of financial sources and financial choices for these firms, which is very important for the economic performance. We test these predictions empirically by using a panel of more than fifteen thousands UK manufacturing firm records during the period of 1990-1999. We show that the financial choices of small, young, risky and highly indebted firms are more sensitive to tight monetary conditions than those of large, old, secure and low indebted firms. The evidence is consistent with the credit channel where monetary policy has distributional implications for the bank dependent firms that face difficulties in getting external finance during tight periods. We also test the impact of policy on firms' inventory investment and employment growth by taking into account base rate to capture the user cost of capital, the ratio of the short term debt to current liabilities, and cash flow in addition to other control variables across firm characteristics by using dynamic panel estimation procedures. This framework enables us to avoid some empirical issues, e.g. identification concerning cash flow, ad hoc sample splitting criteria (classifying firms as financially constrained or unconstrained) and endogeneity problem between firm specific variables and inventory investment and employment. Financial variables consistently explain both inventory investment and employment growth across firm groups but the former is more sensitive to the financial variables and the monetary policy stance. Our results imply that the financial structure of firms makes a difference for their real activity, therefore verifying the credit channel for the UK economy.

This thesis examines the effects of informational imperfections in the financial system on the investment decisions of firms. Its main theme is that such imperfections are relevant for the dynamic aspects of investment decision making, for they affect the cost of flow of new financing. Since their source is ultimately the decentralized nature of the system, where some of the creditors of the firm have not access to the firm' s internal operations, the costs involved are likely to arise in every type of financial market and in the use of every kind of financial instrument. The only source of funds not affected by the informational problems is the flow of internal financing, but this is either constrained or involves rising costs for the insiders. Therefore, there are costs of adjustment in capital accumulation that are related to the financial arrangements of the system. A dynamic optimization model is built to examine the combined financial and investment decisions of a firm operating in an asymmetric information environment. The resulting policies are compared with those of a firm facing conventional adjustment costs and a strongly efficient financial system. The importance of internal financing is confirmed. The role and problems of the equity market as a source of finance is also illuminated. Equity finance is found to differ from debt in so far as equity claims give the right of access to the internal operations of the firm. A model with both types of adjustment costs is also examined. When conventional adjustment costs are dismantling costs (when investment is negative), asymmetries arise between under- and over-leveraged firms with possible implications for policy. Also, Tobin's Q investment approach is re-examined in a model with both type of costs. The Q variable is found to contain interesting information even when capital markets are not strongly efficient. An empirical model is built after examining the behaviour of firms in output markets when facing a stochastic demand. The model is tested with panel industry level data from Greece for the manufacturing sector in 1973-1983. An error correction specification is used. The results confirm the importance of the impact effect of net profitability. Demand and the associated capacity utilization are also found to have a significant effect in the short and in the long run. The evidence is less clear for the user cost of capital and the gross profit margin.

Over the last three decades, there has been an increasing interest in the problem of the investor's optimal consumption and portfolio rules. Despite the substantial amount of related literature, there remain many areas for further investigation. The thesis, therefore, addresses a number of important issues relating to the theory and practice of dynamic portfolio strategies. The thesis consists of five essays. The first two essays, Chapters 3 and 4, are concerned with efficient dynamic asset allocation programs under alternative market assumptions. Chapter 3 studies a situation where the simple time-invariant portfolio strategies are efficient and provides a complete characterisation of the strategies using the efficiency arguments. The popularised constant proportion portfolio insurance (CPPI) is embedded as a special case. Chapter 4 relaxes the assumption of a constant interest rate to allow the interest rate to follow a one factor stochastic process. The factor risk premium is then determined in a way that is consistent with the underlying equilibrium. These results are then applied to solve explicitly for an investor's optimal portfolio choice problem under the special case of a Vacisek short rate model and alternative utility functions. The third essay, Chapter 5, relaxes the assumption of a constant equity risk premium to allow the risk premium to vary through time. The evolution of the market risk premium in a representative agent equilibrium (consistent with the Black-Scholes option pricing) is investigated using a unified approach. The presence of dividends and intermediate consumption proves to be the key element that enables us to obtain a stationary economy with decreasing relative risk aversion, a theoretical result that has not be established in the existing literature. The last two essays. Chapters 6 and 7. are concerned with issues of portfolio efficiency and performance measurement. Chapter 6 uses the result from Chapter 5 that, without dividends and intermediate consumption, the market risk premium must satisfy the Burgers' equation, and applies Dybvig's payoff distribution pricing model to measure the inefficiency costs incurred when this condition is violated. The numerical results show that the degree of inefficiency is not very significant, at least for the cases which we postulate, but the findings also reassure negative result predicted from the model. Finally, Chapter 7 proposes a new utility based performance measure that can be applied in the ex-post evaluation of dynamic portfolio strategies. We construct a contingent claim estimation approach to estimate the nearest efficient strategy from a single realisation and then quantify the opportunity cost resulting from the departure of the observed strategy from the nearest efficient one. The numerical examples show that the technique is remarkably robust.

This thesis examines the experiences of Sudan and Tanzania in attempting to control their respective insurance industries to serve their economic development. The socio-political chemistry in each country has produced a certain policy towards the insurance institution. The Sudan opted to control its industry through a regulation code; Tanzania adopted nationalization as an ultimate form of control. The thesis examines the respective roles of the two regulation models in the development process, and argues that, on balance, a direct model of insurance control such as in Tanzania is more appropriate to the needs of underdeveloped countries than a regulatory model of the Sudanese type. This conclusion derives from insurance theory itself, and from the need to avoid the problems which afflict the regulatory model such as the technical difficulties which regulation involves, the weakness of the regulation agency vis-a-vis the industry, the influence of the latter upon the agency, the difficulty of monitoring solvency, and of enforcing investment regulations. In theory, the state is also more capable of protecting the public which seeks insurance cover from its own institution than when cover is purchased from private insurers. Most information relates to the period 1970-1977, and the thesis is largely based on fieldwork research in the Sudan and Tanzania and on secondary resources. Although the methods of control examined are largely legal methods an attempt is made to transcend law for a better understanding of the problems which afflict the institution. A legal doctrinal study preoccupied with the analysis of rules and procedures is unlikely to provide an insight into how the institution operates. Even less is it likely to be of value when legal rules are not truly reflective of practice. It is for this reason that the institution is studied in the wider political economy of the two countries.

The currency crises and episodes of market unrest of the 1990s sparked a series of regulatory initiatives to reform the Global Financial Architecture. One of these initiatives tackled the activities of hedge funds, a type of investment vehicle that was frequently cited as one of the causes of these crises. The key research question of this thesis is why efforts to regulate an apparently destabilising aspect of financial markets failed, despite the setting up of an ad hoc forum at the international level (the Financial Stability Forum) and various domestic initiatives in the US, the country where most hedge funds operate. The thesis develops a theoretical framework that examines this regulatory inaction through three explanatory models. The first model draws upon mainstream economic accounts and argues that the empirical evidence did not justify more interventionist public regulation of hedge funds. The second model assumes that a form of relational power has been exercised at the regulatory table: those actors with an interest in leaving hedge funds unregulated prevailed over those that favoured a more mandatory approach. The third model argues that it was not just relational power that determined outcomes, but mainly the power of the structure of meaning within which discussions took place and problems were framed. This structure of meaning led to a particular formulation of the problem at stake, which excluded other concerns and actors from the regulatory agenda. Each model is analysed for its policy implications. The first model leads to regulatory solutions that rely upon private actors' due diligence and self-assessment of risk. The second model leads to policy options that favour a greater inclusion of developing countries and other stakeholder groups in decision-making processes in global finance. The third model leads to a rethinking of the very tenets of financial market regulation and of the financial theories used to explain and govern the market. The thesis argues that the third model is better able to grasp the complexity of power beyond the seemingly technical nature of financial regulation. For this reason, it is deemed more suitable to provide policy solutions that challenge the current neo-liberal framework of regulation.

This thesis provides a contribution to the analysis of the link between monetary policy and financial markets. It does so by combining elements from the finance and economics literature and developing areas of intersection which, to some extent, have been evolving in a rather autonomous manner. The thesis takes an empirical perspective and examines three main issues. The first regards the modelling of the short-term interest rate where models are presented that integrate finance contributions with the literature on monetary policy rules. The chapter concludes that there are non-linearities in the short-rate process and these are related to macroeconomic factors in a way consistent with a monetary policy rule. A second essay deals with the effect of monetary policy announcements, improving on previous contributions by extending the investigation to a broader set of instruments and using multivariate models of volatility to capture in a better way the complex interactions between monetary policy and financial markets. The issue of the endogeneity of monetary policy is also a main concern in the final essay of the thesis which examines the contribution of monetary policy shocks in explaining fluctuations in real stock prices in the G7. In this chapter, it is argued that previous approaches may suffer from an omitted variables problem. By including a minimum set of variables both for identifying monetary policy shocks and explaining real stock prices, the study concludes that monetary policy may make a stronger contribution to stock price fluctuations than what is usually found in similar studies.

Market making is central to the study of market microstructure. Market makers stand ready to provide liquidity, market stability and price discovery, issues of great importance to regulators, practitioners and academics. This thesis contributes to the literature by studying four topical issues related to market making. The thesis consists of four essays. In the first essay we develop a simple multi-period model of market making for a monopolistic stock market maker. The market maker tries to solve simultaneously the problems of managing his inventory and trading with informed traders. He uses a Kalman filter to update his estimates of the unknown market prices through his noisy order flow observation. We analytically characterize the optimal bid and ask prices and find that they depend on the beginning inventory, the estimated price, and the market maker's prior estimation error of the price process for each time period. We obtain desirable numerical results by using properly chosen parameters. The extensions to the continuous time and a competitive market making environment are also discussed. The second essay extends the model in the first essay to consider the market making of multiple stocks. The market maker still does not know the true prices but is assumed to know the return covariance structure of these stocks. When the market maker considers the correlated order flow information, his knowledge of the return covariance improves his estimation of the unknown price processes, resulting in higher cumulative profits and lower risks of the profits. The third essay analyzes the effect of option market makers' hedging on the informed trading strategy and the subsequent changes in the costs of liquidity provision in both stock and option markets. In a sequential trading framework, an option market maker uses the stock market to hedge his option position. His hedging trade affects the way that informed traders submit their orders in both the stock and the option market, which in turn changes the informed trading pressure faced by the market makers in each market. Furthermore, information in the option trading is passed to the stock market through the hedging trade. Both stock and option spreads are wider with option market maker's hedging. The increase in the spreads is more significant when the option market maker hedges in the underlying market than when it hedges with different options. The fourth essay provides a model of bookmaking in a horse race betting market. The bookmaker observes the noisy public betting flow and faces the risk of trading with possible informed traders, as well as the risk of his unbalanced liability exposures. Even the noisy demand can unbalance the bookmaker's book. In our model, the bookmaker revises his odds to mitigate the risk. Allowing the bookmaker to set odds over several rounds of betting gives a clear view of the bookmaker's price setting strategy and its impact on the public betting flow over time. The study of horse race bookmaking provides useful insights into the market making of state contingent claims such as options.

The objective of this thesis is to assess the current state of exchange rate modelling and forecasting. The thesis has four distinct essays, each one analysing a current interest topic in this wide and vibrant area of economic research. But a common thread runs through all four: to determine whether it is possible to use the results of this research to develop trading strategies that can add persistent value to international investment portfolios with significant exposure to the foreign exchange market. This market has a daily turnover of $1.9 trillion (BIS, 2004) and is the most liquid financial exchange in the world, by some distance. Nonetheless, we argue that the market is also inefficient, in the sense that profitable trading opportunities persist and that prices do not reflect all available public information on a continuous basis. If we are correct-and we present simulation results that suggest we are-then the opportunity to derive and test plausible trading rules for the management of international investment portfolios though rigorous academic research is enormous. Yet all too often academic exchange rate research appears to be conducted in a cocoon, with the result that conclusions are sometimes difficult to apply in a practical context by portfolio managers. These difficulties reflect the computational requirements of implementing highly intensive trading strategies, associated trading costs and size limitations, and the practical limitations on implementation raised by publication lags and general data limitations. We aim to address these difficulties throughout this thesis. By assessing the merits of various theoretical models that collectively encompass all of the main themes on the current research agenda, we will be in a position to appreciate both the statistical and economic value of existing academic research, isolating areas of real merit for the investment community, and suggesting areas for further attention.

The thesis provides a critical analysis of the problems and possibilities for developing cosmopolitan ethics in global finance. With reference to Ideas and debates within the campaign for a Tobin Tax, it is argued that cosmopolitanism is a promising, but limited, agenda for global reform. Extending principles of justice to support the re-distribution of wealth from financial markets towards an expanded program of global welfare provision is laudable. Likewise, the possibility of improving accountability mechanisms and fostering democratic inclusion in the global financial system should be supported. However, the thesis identifies and reflects upon some important ethical ambiguities relating to financial, institutional and democratic universalism. A requirement for capital account convertibility, a cash-based approach to global justice and proposals for state-centric world authority to administer the Tobin Tax infers that the proposal would entrench many of the logics its supporters might oppose. The thesis develops a pragmatic approach to these questions based on the philosophical pragmatism of Richard Rorty. A pragmatic approach acknowledges the historical and cultural contingency of cosmopolitanism, but questions how the ambiguities and tensions that pervade global ethics can be engaged. In this sense, and developing Rorty's concept of sentimental education, it is argued that the Tobin Tax campaign has generated a broad-based public conversation about global finance, increasing sensitivity to the suffering caused by global finance and the ways in which it might be changed. While such conversation may not solve all the dilemmas identified, it does allow for increased awareness of the ambiguity of ethics. The thesis points to a number of instances in the campaign where the constitutive ambiguities of the Tobin Tax have been questioned and alternative practices suggested. A pragmatic approach to the Tobin Tax campaign therefore situates cosmopolitan ideas in the extant dilemmas and indeterminacies of global ethics, looking to suggest alternatives where possible.