Luc Renneboog: 03-31-09 Economist of the Day

We  choose Professor Luc Renneboog, of  Tilburg University as Economist of the Day.

Luc Renneboog

Contact Information

T: +13 31 466 8210
luc.renneboog(at)uvt.nl

Luc’s SSRN page can be found here.

Short Biography

Before joining the department of Finance at Tilburg University, Luc Renneboog taught at the Catholic University of Leuven (Belgium) and at Oxford University. He was also a visiting lecturer/researcher at the London Business School, HEC Paris, Venice University, Colegio Universitario de Estudios Financieros (CUNEF, Madrid), and European University Institute (Florence).

He graduated from the University of Leuven with a BSc/MSc in commercial engineering and with a BA in philosophy, from the University of Chicago with an MBA, and from the London Business School (University of London) with a PhD in Financial Economics. He is also a research member of CentER for Economic Research, TILEC (Tilburg Law and Economics Center) and ECGI (European Corporate Governance Institute, Brussels).

He has published in the Journal of Finance, Journal of Financial Intermediation, Journal of Law and Economics, Journal of Corporate Finance, Journal of Banking and Finance, Journal of Law, Economics & Organization, Cambridge Journal of Economics, Oxford Review of Economic Policy, European Financial Management and others. His research interests are corporate finance, corporate governance, initial public offerings, mergers and acquisitions, rights issues, pricing anomalies, law and economics, the economics of sports, ethical investing, financial distress, and the economics of art.

Teaching

• Executive Master in Finance: Mergers and acquisitions, and corporate governance, taught in English to 18 students. Teaching rating: 4.3 on scale of 5 (2004-05), 4.2 (2005-06), 4.5 (2006-07), 4.0 (2007-08).
• Executive Master in Finance: Advanced Corporate Finance, taught in English to 18 students. Teaching rating: 4.4 and 4.5 on scale of 5 (2004-05); 4.2 (2005-06); 4.6 (2006-07), 3.8 (2007-08).
• MSc in Financial Management/ MSc in Investment Analysis: Corporate restructuring and governance. 4.7 on scale or 5 (2007-8).
• MSc in Business Economics: Mergers and Acquisitions, taught in English to about 250 students; Teaching rating: 4.1 on a scale of 5 (2003-04); 4.6 on scale of 5 (2004-05).
• MSc in Business Economics: Real Options 1998-99, 1999-2000, 2000-01: taught in Dutch to 60 final year students. Teaching rating: 4.0 on scale of 5 (1998-99), 4.5 (2000-01), 4.8 (2001-02),4.8 (2002-03), 4.6 (2003-04).
• BSc in Business Economics: Corporate Finance II – 1998-99, 1999-2000, 2000-01, 2001-02: Taught in English to four streams of 60 International Business students.Teaching rating: 3.0 on scale of 5 (1998-99)4.0 (1999-2000), 4.7 (2000-01), 4.0 (2001-02), 4.2 (2002-03).
• Executive Course Co-ordinator and lecturer (kerndocent) in finance of Financial Management the Master in Agribusiness (Bedrijfskundige advisering in de agrarische sector) in Tias Business School, 1999-2000, 2000-01; Executive education program (MBA-type) for 25 consultants, accountants and bankers dealing with the Dutch agricultural industry. Teaching rating 7.6 on scale of 10.

Teaching Awards

• Teaching Award for Best Lecturer, Faculty of Economics and Business Administration, Tilburg University, 2000/01.
• Philips Innovation Award for teaching quality, Tilburg University, 2002/03.
• Nominee for Best Teacher Award, Faculty of Economics and Business Administration, Tilburg University, 2003/04.
• Award for Teaching Excellence, Master in Finance programme, Tias Business School, Tilburg University, 2004/05.
• Teaching Award for Best Lecturer, Faculty of Economics and Business Administration, Tilburg University, 2004/2005.
• Award for Teaching Excellence, Master in Finance programme, TiasNimbas Business School, Tilburg University, 2006/07.

Published and forthcoming papers

• Why are the French so different from the Germans? Underpricing in IPOs on the Euro New Markets (with M. Goergen and A. Khurshed), International Review of Law and Economics, forthcoming, 2009.
• The Performance of the European Market for Corporate Control: Evidence from the 5th Takeover Wave (with M. Martynova), European Financial Management, forthcoming, 2009.
• Information salience, investor sentiment, and stock returns: the case of British soccer betting, (with F. Palomino and C. Zhang), Journal of Corporate Finance, forthcoming, 2009.
• What Determines the Financing Decision in Corporate Takeovers: Cost of Capital, Agency Problems, or the Means of Payment?, (with M. Martynova), Journal of Corporate Finance, forthcoming.
• The dividend policy of German firms: A dynamic panel data analysis with partial adjustment models (with C. Andres, A. Betzer and M. Goergen), Journal of Empirical Finance 16 (2), 2009, 175-187.
• A century of corporate takeovers: What have we learned and where do we stand?, (with M. Martynova), Journal of Banking and Finance 32 (10), 2008, 2148-77.
• Is the German System of Corporate Governance Converging Towards the Anglo-American Model? (with M. Goergen and M. Manjon), Journal of Management and Governance 12, 2008, 37-71.
• The price of ethics and stakeholder governance: The performance of socially responsible mutual funds (with J. Ter Horst and C. Zhang), Journal of Corporate Finance 14, 2008, 302-322.
• Spillover of Corporate Governance Standards in Cross-Border Mergers and Acquisitions( with M. Martynova), Journal of Corporate Finance 14, 2008, 200-223.
• Contractual Corporate Governance (with M. Goergen), Journal of Corporate Finance 14, 2008, 166-182.
• Socially Responsible Investments: Institutional Aspects, Performance, and Investor Behaviour (with J. Ter Horst and C. Zhang), Journal of Banking and Finance 32, 2008, 1723-1742.
• Do UK institutional investors monitor the firms they invest in? (with J. Ter Horst and C. Zhang), Journal of Corporate Law Studies 8, 2008, 39-56.
• Corporate Restructuring and Bondholder Wealth (with P. Szilagyi), European Financial Management14 (4), 2008, 792-819.
• Recent developments in German corporate governance (with M. Manjon and M. Goergen), International Review of Law and Economics, 2008, 28, 175-193.
• Why do public firms go private in the UK? The impact of private equity investors, incentive realignment and undervaluation (with T. Simons and M. Wright), Journal of Corporate Finance 13 (4), 2007, 591-628.
• The incentive to give incentives: on the relative seniority of debt claims and managerial compensation, (with R. Calcagno), Journal of Banking and Finance 31 (6)2007, 1795-1815.
• Does ownership matter? A study of German and UK IPOs, (with M. Goergen), Managerial Finance 33 (7) 2007, 368-387.
• Control structures and payout policy, with (G. Trojanowski), Managerial Finance 33 (1) , 2007, 43-64.
• Management Buyouts in the UK and Europe: retrospect and prospect, (with L. Scholes, T. Simons and M. Wright), Journal of Applied Corporate Finance 18 (3), 2006, 38-55.
• Insider trading, news releases and ownership concentration (with J. Fidrmuc and M. Goergen), Journal of Finance 61 (6), 2006, 2931-2973.
• Explaining the diversity of shareholder lockup agreements, (with M. Goergen and A. Kurshed), Journal of Financial Intermediation 15, 2006, 254-280.
• Do corporate control and product market competition lead to stronger productivity growth? Evidence from market-oriented and blockholder-based governance regimes, (with J. Köke), Journal of Law and Economics 48, 2005, 475-516.
• Is investment-cash flow sensitivity caused by agency costs or asymmetric information? (with Greg. Pawlina), European Financial Management Journal 11 (4), 2005, 483-513.
• Corporate governance convergence: Evidence from takeover regulation reforms in Europe, (with M. Goergen and M. Martynova), Oxford Review of Economic Policy , 21 (2), 2005, 1-27.
• When do German firms change their dividends? (with M. Goergen and L. Correia da Silva), Journal of Corporate Finance 11 (1-2), 2005, 375-399.
• Shareholder wealth effects of European domestic and cross-border takeover bids, (with M. Goergen), European Financial Management Journal 10 (1), 2004, 9-45. Award winning paper.
• The impact of stock exchange regulation on corporate performance of the European New Markets, (with M. Goergen and J. McCahery), Journal of Corporate Law Studies 3 (2), 2003, 379-400.
• Why are the levels of control (so) different in German and UK companies? Evidence from initial public offerings, (with M. Goergen), Journal of Law, Economics and Organization 19 (1), 2003, 141-175.
• The monetary appreciation of art: from realism to Magritte, (with T. Van Houtte), Cambridge Journal of Economics 26 (3), 2002, 331-357.
• Managerial remuneration: the indirect pay-for-performance relation, (with J. McCahery), Journal of Corporate Law Studies 1 (2), 2001, 317-332.
• Investment policy, internal financing and ownership concentration in the UK, (with M. Goergen), Journal of Corporate Finance 7 (3), 2001, 257-284.
• Who disciplines the management of poorly performing companies?, (with. J. Franks and C. Mayer), Journal of Financial Intermediation 10, 2001, 209-248. Award winning paper.
• Do managerial remuneration schemes reduce agency costs? Evidence from blockholder and market-oriented corporate governance systems (with R. Crespi and C. Gispert), Quarterly Journal of Economic Research 70 (2), August 2001, 234-247.
• Corporate investment, asymmetric information and agency costs, (with M. Goergen), Quarterly Journal of Economic Research 70 (2), August 2001, 248-260.
• Comparative corporate governance: convergence and diversity of national regimes (published in French: Gouvernance corporative: Convergence et diversité des régimes nationaux), (with J. McCahery), Gouvernance Revue Internationale 1 (3), 2000, 51-84.
• Ownership, managerial control and the governance of poorly performing companies listed on the Brussels stock exchange, Journal of Banking and Finance 24 (12), 2000, 1959-1995. Award winning paper.
• Insider control by large investor groups and managerial disciplining in Belgian listed companies. (with M. Goergen), Managerial Finance 26 (10), 2000, 22-41.
• From realism to surrealism: investing in Belgian art, (with T. Van Houtte), Cahiers Economiques de Bruxelles 165 (1st trim.), 2000, 69-106.
• Strong managers and passive institutional investors in the UK, (with M. Goergen), Nota di Lavora 21.99, Fondazione Eni Enrico Mattei, 1999.
• Corporate governance systems: the role of ownership, external finance and regulation (part II), Corporate Governance International 2 (1), March 1999, 4-20.
• Corporate governance systems: the role of ownership, external finance and regulation (part I), Corporate Governance International 1 (4), Dec. 1998, 37-48.
• The role of large share stakes in poorly performing companies in the U.K., (with J. Franks and C. Mayer); Nota di Lavoro 1.96, Fondazione Enrico Mattei, Milan, 1996, 1-28.

Publications in non-refereed journals:

• Do Differences in Corporate Governance Standards in Cross-Border Mergers and Acquisitions create synergy value?, (with M. Martynova), New Modes of Governance Policy Brief Nr 29, European University Institute, 1-5.
• Takeovers in Europe, VITE International magazine, October Issue, 2007, 7-11.
• Leveraged and Management Buyouts in Europe: are target firms overvalued?, MCA – Tijdschrift voor Organisaties in Control 11 (3), 2007, 16-28.
• Why do firms go private?, Defacto Magazine 21 (2), 2007, 29-32.
• Managerial disciplining, in R. van Frederikslust: Corporate Governance and Corporate Finance: A European Perspective, RSM Erasmus University, March 2007, 31-42.
• Does corporate governance matter?, Inaugural lecture, University of Tilburg, December 2005.
• Dividends and Corporate Governance (with M. Goergen), Eclectic: The magazine of the Banking and Finance Faculty, Institute of Financial Services, 2004, Issue 16, 16-21
• Corporate restructuring, Faces 2002 (1), 38-47.
• De geconcentreerde aandeelhoudersstructuur en de rol van referentie-aandeelhouders in goed vennootschapsbeheer, Alma Mater, August 1998, 151-166.

Published and forthcoming book chapters:

• Blockholders, (with I. Dherment), in: H. K. Baker and R. Anderson (eds.) Corporate Governance, John Wiley & Sons, forthcoming, 2009.
• Corporate takeovers and wealth creation (with M. Martynova), in: H. K. Baker and R. Anderson (eds.) Corporate Governance, John Wiley & Sons, forthcoming, 2009.
• Executive Compensation, Incentives and Prerequisites (with P. Geiler), in: H. K. Baker and R. Anderson (eds.) Corporate Governance, John Wiley & Sons, forthcoming, 2009.
• Going private, Finance: The Ultimate Resource, Bloomsbury Publishing, forthcoming, 2009.
• The performance of socially responsible investment funds, Finance: The Ultimate Resource, Bloomsbury Publishing, forthcoming, 2009.
• Corporate Restructuring and Bondholder Wealth (with P. Szilagyi), reprint of publication in European Financial Management in A. Pacces, Changing Perspectives on Corporate Law and Economics, Edward Elgar, forthcoming, 2009.
• Why do public firms go private in the UK? The impact of private equity investors, incentive realignment and undervaluation (with T. Simons and M. Wright), reprint of publication in Journal of Corporate Finance, in J. McCahery (eds.), Activist Investors, Hedge Funds and Corporate Governance, forthcoming 2009..
• Socially responsible investment funds (with J. Ter Horst and C. Zhang), in: G. Aras and D. Crowther (eds.), The Gower Handbook of Corporate Governance and Social Responsibility, Gower publishers, forthcoming 2009.
• The Social Responsibility of Major Shareholders (with M. Goergen), in: G. Aras and D. Crowther (eds.), The Gower Handbook of Corporate Governance and Social Responsibility, Gower publishers, forthcoming 2009.
• Insider trading, news releases and ownership concentration, (with J. Fidrmuc and M. Goergen), reprint of publication in the Journal of Finance, in Paul U Ali and Greg N Gregoriou (eds.), Insider Trading: Regulation and Analysis , CRC Press/Chapman & Hall, 2008, 279-340.
• Dividend policy in a global perspective, (with M. Goergen), forthcoming in: The Blackwell Companion to Dividends and Dividend Policy , H. Kent Baker (Ed.), Companions to Finance series, Blackwell, 2009.
• The catering theory of dividends (with M. De Rooij), forthcoming in: The Blackwell Companion to Dividends and Dividend Policy , H. Kent Baker (Ed.), Companions to Finance series, Blackwell, 2009.
• Renneboog, L., T. Simons, and M. Wright, 2008, Why do public firms go private in the UK? The impact of private equity investors, incentive realignment and undervaluation, reprint of a publication in the Journal of Corporate Finance, in: M. Wright and H. Bruining (eds), Private equity and management buy-outs, Edward Elgar, 101-150.
• Do corporate control and product market competition lead to stronger productivity growth? Evidence from market-oriented and blockholder-based governance regimes, (with J. Köke), reprint of a publication of the Journal of Law and Economics, in M. Ricketts (ed.), The Economics of Modern Business Enterprise (volume 3), The international library of critical writings in economics, Edward Elgar, 2007, 550-591.
• Understanding mergers and acquisitions: Corporate governance and regulatory issues, (with G. Gregoriou), forthcoming in Corporate Governance and Regulatory Impact on Mergers and Acquisitions: Research and Analysis on Activity Worldwide Since 1990 , G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 1-18.
• Understanding mergers and acquisitions: An overview of the recent research, (with G. Gregoriou), in International Mergers and Acquisitions Activity since 1990: Recent Research and Quantitative Analysis , G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 1-20.
• The long-term operating performance of European mergers and acquisitions, (with M. Martynova and S. Oosting), in International Mergers and Acquisitions Activity since 1990: Recent Research and Quantitative Analysis , G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 79-116.
• How do bondholders fare in mergers and acquisitions? (with P. Szilagyi), in International Mergers and Acquisitions Activity since 1990: Recent Research and Quantitative Analysis, G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 117-134.
• Who disciplines the management of poorly performing companies?, (with J. Franks and C. Mayer), reprint of a publication in the Journal of Financial Intermediation in: R. van Frederikslust, J. Ang and S. Sudarsanam, Corporate Governance and Corporate Finance: A European Perspective, Oxford: Routledge, forthcoming 2006.
• Ownership, managerial control and the governance of companies listed on the Brussels stock exchange, reprint of a publication in the Journal of Banking and Finance, in: R. van Frederikslust, J. Ang and S. Sudarsanam, Corporate Governance and Corporate Finance: A European Perspective , Oxford: Routledge, forthcoming 2006.
• Why are the levels of controls so different in German and UK companies? Evidence from initial pubic offerings (with M. Goergen), reprint of a publication in the Journal of Law,Economics and Organization, in: R. van Frederikslust, J. Ang and S. Sudarsanam, Corporate Governance and Corporate Finance: A European Perspective, Oxford: Routledge, forthcoming 2006.
• Shareholder lock-in contracts: Share priceand trading volume effects at the lock-in expiry (with P.P. Angenendt and M. Goergen), in L. Renneboog (ed.), Advances in Corporate Finance and Asset Pricing, Amsterdam: Elsevier, 2006, 235-276.
• Mergers and Acquisitions in Europe, (with M. Martynova), in L. Renneboog (ed.),Advances in Corporate Finance and Asset Pricing, Amsterdam: Elsevier, 2006, 13-75.
• Corporate restructuring and governance, valuation and asset pricing, in L. Renneboog (ed.), Advances in Corporate Finance and Asset Pricing, Amsterdam: Elsevier, 2006, 1-11.
• The life and works of Piet Duffhues, (with J. Grazell), in L.Renneboog (ed.), Advances in Corporate Finance and Asset Pricing, Amsterdam: Elsevier, 2006, forthcoming.
• Corporate governance and shareholder value (with M. Goergen), in David Lowe and Peter Fenn (eds.), Commercial management of complex projects: Defining the discipline, 2005, 100-131.
• Insider retention and long-run performancein German and UK IPOs, (with M. Goergen), in I. Filatotchev and M. Wright (eds.), The Corporate Governance Life-Cycle, Edward Elgar, 2005, 123-143.
• The impact of corporate governance on firm performance and growth potential: an analysis of three different European governance regimes, (with C. Gispert, A. de Jong and R. Kabir), in I. Filatotchev and M. Wright (eds.), The Corporate Governance Life-Cycle, Edward Elgar, 2005, 233-252.
• Investment policy,internal financing and ownership concentration in the UK, (with M. Goergen), reprint of publication in Journal of Corporate Finance; in Corporate governance in the new global economy, Kevin Keasey, Steve Thompson and Mike Wright (Eds.), Cheltenham: Edward Elgar, January 2005, 518-545. ISBN 1 84376 831 3.
• Corporate governance in Germany, (with M. Goergen and M. Manjon), in K. Keasey, S. Thompson and M. Wright (eds.), Corporate Governance: Accountability, Enterprise and International Comparisons, John Wiley, 2005, 285-326.
• The economics of takeover regulation, (with Joe McCahery), in Reforming Company and Takeover Law in Europe, G. Ferrarini, K. Hopt, J. Winter and E. Wymeersch (eds.), Oxford University Press, 2004, 575-646.
• Venture capital financing of innovative firms (with J. McCahery), in Venture capital contracting and the valuation of high tech firms, J. McCahery and L. Renneboog (eds.), Oxford University Press, 2003,1-25.
• Lock-in agreements in venture capital-backed UK IPOs, (with S. Espenlaub, M. Goergen and A. Khurshed), in Venture capital contracting and the valuation of high tech firms, J. McCahery and L. Renneboog (eds.), Oxford University Press, 2003, 396-436.
• The rise and fall of the European New Markets: on the short and long-term performance of high tech initial public offerings (with M. Goergen, A. Khurshed and J. McCahery), in Venture capital contracting and the valuation of high tech firms, J. McCahery and L. Renneboog (eds.), Oxford University Press, 2003, 464-492.
• Corporate control concentration measurement and firm performance (with Y. Crama, L. Leruth and J.P. Urbain), in Social Responsibility: Corporate Governance Issues, series Research in International Business and Finance (Vol. 17), J. Batten and T. Fetherston (eds.), Oxford: JAI Press (Elsevier Science ltd.), 2003, 123-149.
• Value creation in large European mergers and acquisitions, (with M. Goergen) in Advances in Mergers and Acquisitions, Volume 2, A. Gregory (ed.), Oxford: JAI Press (Elsevier Science ltd), 2003, 97-146.
• Prediction of control concentrationin German and UK IPOs (with M. Goergen),in Convergence and Diversity of Corporate Governance Regimes and Capital Markets, McCahery et al. (eds.), Oxford University Press, 2002, 251-267.
• Managerial disciplining and the market for (partial) corporate control in the UK (with J. Franks and C. Mayer), in Convergence and Diversity of Corporate Governance Regimes and Capital Markets, McCahery et al. (eds.), Oxford University Press, 2002, 441-456.
• Recent developments in corporate governance (with J. McCahery), in Convergence and Diversity of Corporate Governance Regimes and Capital Markets, McCahery et al. (eds.),Oxford University Press, 2002, 1-22.
• Share price reactions to CEO resignations and large shareholder monitoring in listed French companies (with I. Dherment), in Convergence and Diversity of Corporate Governance Regimes and Capital Markets, McCahery et al. (eds.), Oxford University Press, 2002, 297-324.
• Cash-based executive compensation in Spain and UK (with R. Crespi and C. Gispert), in Convergence and Diversity of Corporate Governance Regimes and Capital Markets, McCahery et al. (eds.), Oxford University Press, 2002, 647-667.
• Shareholding cascades: separation of ownership and control in Belgium (with M. Becht and A. Chapelle), in The control of corporate Europe, F. Barca and M. Becht (eds.), 2001 (1st edition) and 2002 (2nd edition), Oxford University Press, 71-105.
• Strong managers and passive institutional investors in the UK (with M. Goergen), in The control of corporate Europe, F. Barca and M. Becht (eds.), 2001 (1st edition) and 2002 (2nd edition), Oxford University Press, 259-284.
• Corporate governance and economic performance in Belgium (with M. Goergen) in Corporate governance and economic performance, K. Gugler (ed.), Oxford University Press, 2001, 85-96.
• Corporate governance and economic performance in the UK (with M. Goergen) in Corporate governance and economic performance, K. Gugler (ed.), Oxford University Press, 2001, 184-200.
• Executive compensation in Europe (with J. McCahery), in P. Essers, R. Happe, G. Meussen, M. Raaijmakers en R. Vriesendorp (eds.): Verkenningen op de grens van burgerlijk recht en belastingsrecht, Boom Juridische Uitgevers, 2001, 229-244.
• Shareholding concentration and pyramidal ownership structures in Belgium, in Corporate Governance, Financial Markets and Global Convergence, M. Balling, E. Hennessy and R. OBrien (eds.), Kluwer Academic Publishers, December 1997, 263-300.
• From critical to communicative rationality: on theory building in the management science, in European Research Paradigms in Business Studies, H.S. Jensen, T. Elfring en A. Money (eds.), Handelshojskolens Forlag, 1995, 135-164.

Books

Edited

• Corporate governance regimes: convergence and diversity, J. McCahery, P. Moerland, T. Raaijmakers and L. Renneboog (eds.), Oxford University Press, September 2002, pp. 700, 28 chapters.
• Venture capital contracting and the valuation of high tech projects, J. McCahery and L. Renneboog (eds.), Oxford: Oxford University Press, November 2003, pp. 500, 19 chapters.
• Advances in corporate finance and asset pricing, L. Renneboog (ed.), Amsterdam: Elsevier, March 2006, pp. 510, 22 chapters.
• International Mergers and Acquisitions Activity since 1990: Recent Research and Quantitative Analysis, G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 12 chapters.
• Corporate Governance and Regulatory Impact on Mergers and Acquisitions: Research and Analysis on Activity Worldwide Since 1990 , G. Gregoriou and L. Renneboog (eds.), Massachusetts: Elsevier, 2007, 10 chapters
• Monographs: The economics of the proposed European takeover directive, J. McCahery and L. Renneboog, Centre for European Policy Studies, Brussels, March 2003, pp. 105.
• Dividend policy and corporate governance, L. Correia da Silva, M. Goergen and L. Renneboog, Oxford University Press, 2004, pp.185.
• Gu Li Zheng Ce Yu Gong Si Zhi Li, L. Correia da Silva, M. Goergen and L. Renneboog, Oxford: Oxford University Press, 2008, pp. 185.

Case studies

• Valuating Ryanair’s Expansion to Turkey: An application of discounted cash flows (case A) and real options (case B), (with E. Ultee), European Case Clearing house, 2007. – Case 107-039-1. (www.ecch.com)
• - Spreadsheets 107-039-4. (www.ecch.com)
• - Teaching note 107-039-8. (www.ecch.com)
• - Spreadsheets toTeaching note 107-039-9. (www.ecch.com)

Book Review

Creating value from mergers and acquisitions, by Sudi Sudarsanam, FT Prentice Hall 2003, ISBN 0-201-72150-3, European Financial Management 10, 2004, 537-538.

Unpublished working papers

• Share price reactions to sporty performances of soccer clubs listed on the London Stock Exchange and the AIM, Discussion paper CentER, Tilburg University, review and resubmit Journal of Business Finance and Accounting.
• Coalition formation and shareholder monitoring in the UK (with R. Crespi), Discussion paper CentER, Tilburg University.
• The determinants of managerial monitoring in French listed firms, (with I. Dherment), review and resubmit Strategic Management Journal.
• Corporate monitoring by blockholders in Europe: Empirical evidenceof managerial disciplining in Germany, Belgium, France and the UK, (with I. Dherment and J. Köke), Discussion paper CentER, Tilburg University, review and submit Journal of Law, Economics and Organization.
• The managerial labor market and the governance role of shareholder control structures in the UK, (with G. Trojanowski), Discussion paper CentER, Tilburg University, review and resubmit Journal of Corporate Finance.
• The choice between rights-preserving issue methods: Regulatory and financial aspects of issuing seasoned equity in the UK. (with A. Korteweg), review and resubmit European Financial Management.
• Stock price reaction to short-lived public information: the case of betting odds (with F. Palomino and C. Zhang), Discussion paper CentER, Tilburg University.
• Public to private transactions: Motives, trends, theories and empirical literature on LBOs, MBOs, MBIs and IBOs (with T. Simons), Discussion paper CentER, Tilburg University.
• Dividend policy of German firms: A dynamic panel data analysis of partial adjustment models (with M. Goergen and L. Correia da Silva), review and resubmit Journal of Empirical Finance.
• Patterns in payout and channel payout choice of UK firms in the 1990s, (with G. Trojanowski), Discussion paper CentER, Tilburg University, review and resubmit Journal of Business, Finance, and Accounting.
• Takeover waves: triggers, performance and motives, (with M. Martynova), Discussion paper CentER, Tilburg University.
• Is ethical money financially smart? (with J. ter Horst and C. Zhang), Discussion paper CentER, Tilburg University.
• The risk-return tradeoff in socially responsible investment funds (with J. ter Horst and C. Zhang), Discussion paper CentER, Tilburg University.
• Socially Responsible Investments: Performance, Risk Exposure and Regulation, (with J. ter Horst and C. Zhang), Discussion paper CentER, Tilburg University.
• Returns to bidding and target firms in European corporate takeovers, (with M. Martynova), Discussion paper CentER, Tilburg University.
• How relevant is payout policy under low shareholder protection?, (with P. Szilagyi), Discussion paper CentER, Tilburg University.

Research projects

• Participation in research reports to :

1. European Commission (DG XII):

‘Ownership concentration and pyramiding in Belgian quoted companies’, part of report ‘Ownership and Control’ to the European Commission from the European Corporate Governance Network, October 1997, editor M. Becht. 250p.

2. OECD:

‘Corporate governance in Belgium: survey of the literature’: part of report on Corporate Governance in Europe, February 1999, editor K. Gugler, 180p.

3. Ministry of Finance, the Netherlands:

‘Corporate Governance systems and performance’, research on the relation between corporate control systems and performance in the Netherlands, Belgium and UK with special focus on the importance of the Dutch ’structural regime’. Edited by P. Moerland and T. Nijman (Center for Applied Research of Tilburg University), September 1999.

4.Central Plan Bureau, France (Commissariat Général du Plan):

See infra.

5. Deminor (Brussels):

Building and testing a corporate governance index for European blue chip firms. Work in progress, from November 2000.

6. Center for European Policy Studies (CEPS; Brussels)

Report on the newly proposed take-over regulation of the European Commission: ‘The economics of the proposed European takeover directive’. March 2003. Authors: Joe McCahery and Luc Renneboog; pp. 105.

7. Monitoring Commission of the Corporate Governance Code, Ministry of Finance, the Netherlands.

Report on recent developments on corporate governance in the main western economies (with P. Duffhues and. J. ter Horst), November 2005.

Supervision of PhD students

- Arthur Korteweg in 2001-2002 (transferred to U. of Chicago), thesis: Seasoned equity offerings.
- Jana Fidrmuc (2000- June 2003); The impact of large shareholders on information signalling, factor productivity and managerial disciplining. Defence: 27 June 2003.Currently at Erasmus University and Warwick Business School
- Greg Trojanowski (2000-2004): Ownership structure as a mechanism of corporate governance. Defence: 12 November 2004.Currently at the University of Exeter.
- Annabel Sels (2006): Foreign direct investment as an entry mode and order of entry under uncertainty – An application in emerging economies, Defence: 9 June 2006.
- Chendi Zhang (2002-2006) (with J. ter Horst as co-supervisor): Ethics, Investment and Investor Behaviour. Hired by the University of Warwick.
- Marina Martynova (2002-2006): M&A in Europe and the price of corporate governance in the market for corporate control. Hired by the University of Sheffield.
- Peter Szilagyi (2003-2007): Corporate Governance and the Agency Costs of Debt and Outside Equity. Hired by the University of Cambridge.
- Mieszko Mazur (2006-…): Divestitures and Spin-offs.
- Christophe Spaenjers (2006-…): The economics of art.
- Yang Zhao (2006-…): Director networks.
- Eric Engesaeth (2007-…) : Managerial remuneration. Employed by Towers Perrin..
- Margot de Rooij (2008-…) (with Jenke ter Horst, co-supervisor): Behavioural Economics/Neuro-economics..
- Peter Cziraki (2008-…) : Insider trading and shareholder activism..
- Philip Geiler (2008-…) : Managerial remuneration. .

Member of PhD committees

- University of Liège (Belgium): Thaddée Frédéric Nlemvo Ndonzuau: L’impact de la structure de l’actionnariat sur la performance financière et les choix stratégiques de l’entreprise. Defence: 15 May 1998.
- Cambridge University: Antonio Saragga-Seabra: Investment, corporate acquisitions and firm market value. Defence: 18 Dec. 2001.
- Budapest University of Economics: Arnold Ludanyi: The participation of venture capital companies in the management and financing of Hungarian enterprises. Defence: 20 June 2002.
- European University Institute (Florence): Simon Hough: Priceless or worthless? Four essays on art as an investment. Defence: 28 April 2003.
- Charles University Prague – CERGE: Elena Yusupova: ‘Bidding behaviour of investment companies in the voucher privatisation: Theoretical model and empirical predictions of the Czech voucher funds’; Defence: Spring 2006.
-Helsinki School of Economics: Seppo Kinkki : ‘Essays on minority protection and dividend policy’, Defence: Autumn 2007.
-Swedish School of Economics and Business Administration Hanken (Finland): Erkki Nikoskelainen: ‘The operating characteristics of leveraged buyouts: Empirical evidence from Europe’, Autumn 2007.
- Université Libre de Bruxelles (ULB, Brussels): Cristina Vespro: ‘Essays on Financial Architecture’; Defence: 23 June 2008.

Citizenship & Civil State

Nationality: Belgian citizen.
Marital status: Happily married to Eugenia Houvenaghel. 4 children, aged 8, 6, 4 and 1.

Personal

Interested in poetry, history and classical music.
Founding member of London Business School’s PhD soccer team (1991-95). Enjoy cycling, walking (Camino de Santiago, Xacobeo 1999) and running.

Degree in piano at the Music Academy of Aalst (Belgium) (1975-84). Singing classes at the Music Academy of Leuven (1996-98). Former member of the University of Chicago Choir (1989), of the University of London Chorus (1991-93), of the Royal Choral Society (London 1993-95), of Vocal Ensemble Florilegium (Leuven 1996), of Vocal Ensemble OrSeCante (Leuven 1996-97), of the Capilla Mercuriale (KULeuven 1996-98) and of the Kempense Oratorium Vereniging (Turnhout 2000-03).

Some favourite CDs (random order)

1. 1. Le Chant de Virgile by Josquin Desprez, Roland Lassus, Adriaan Willaert etc. (Huelgas ensemble directed by Paul van Nevel; Harmonia Mundi)
2. 2. Tenebrae Responsories by Tomas Luis de Victoria (The Sixteen directed by Harry Christophers – Virgin Classics)
3. 3. Officium Defunctorum / Missa Pro Defunctis by Cristobal de Morales (La Capella Reial da Catalunya / Hespèrion XX directed by Jordi Savall)
4. 4. Theophanie: Orthodox Chant (Choir of the Monastery of Chevetogne)
5. 5. Lagrime de San Pietro by Roland de Lassus (Ensemble Vocal Europeen directed by Philippe Herreweghe)
6. 6. O Gemma lux by Guillaume Dufay (Huelgas Ensemble directed by Paul van Nevel – Harmonia Mundi)
7. 7. The Pilgrimage to Santiago (New London Consort directed by Philip Pickett – L’Oiseau-Lyre)
8. 8. Romances Sefardes dans l’empire de la Sublime Porte (Accentus Austria directed by Thomas Wimmer – Arcana)
9. 9. Diaspora Sefardi, Romances y Musica Instrumental (La Capella Reial da Catalunya / Hespèrion XXI directed by Jordi Savall)
10. 10. Carlos V – Mille Regretz: La Cancion del Emperador (La Capella Reial da Catalunya / Hespèrion XXI directed by Jordi Savall – Alia Vox)
11. 11. Paraisos Perdidos – Christophorus Columbus (La Capella Reial da Catalunya / Hespèrion XXI directed by Jordi Savall)
12. 12. Miguel de Cervantes – Don Quijote de la Mancha – Romances y Musicas (La Capella Reial da Catalunya / Hespèrion XXI directed by Jordi Savall)
13. 13. Fiesta Criolla – Une fete pour la Vierge de Guadelupe a Sucre (1718) (Ars Longa de La Havana directed by Gabriel Garrido – K617/Le couvent)
14. 14. Flow my tears (Songs from the first booke of songs 1597 and the second booke 1600) by John Dowland (Metronome)
15. 15. Opus Ultimum by Heinrich Schutz (Collegium Vocale directed by Philippe Herrewege)
16. 16. Lachrimae Caravaggio composed by Jordi Savall (Le concert de nations, Hesperion XXI – Alia Vox)
17. 17. Te Deum by Antonio Teixeira (The Sixteen directed by Harry Christophers – Collins Classics)
18. 18. Cello Suites 1-6 by J.S. Bach (M. Rostropovich; Phillips)
19. 19. Missa Criolla by Ariel Ramirez (Coral Salve de Laredo directed by Jose Luis Ocejo – Philips)
20. 20. Canon Pokaianen by Arvo Paert (Estonian Philharmonic Chamber Choir directed by Toenu Kaljuste)
21. 21. Vigilia by Einojuhani Rautavaara (Finnish Radio Chamber Choir directed by Timo Nuoranne)
22. 22. The protecting veil by John Tavener (the Royal Philharmonic directed by Justin Brown)
23. 23. The Well by Chava Alberstein.
24. 24. The prisoner’s song by Muzsikas
25. 25. Le pas du chat noir / Le voyage du Sahar by Anouar Brahem (ECM)
26. And much much more

Some favourite films (random order):

1. 1. The English patient by Anthony Minghella
2. 2. Trois couleurs: Bleu by Krzysztof Kieslowski
3. 3. The merchant of Venice by Michael Radford
4. 4. La gloire de mon père / Le chateau de ma mère by Yves Robert
5. 5. Heimat by Edgar Reitz
6. 6. Jean De Florette / Manon Des Sources by Claude Berri
7. 7. Il postino by Michael Radford
8. 8. The good, the bad and the ugly by Sergio Leone
9. 9. The lord of the rings by Peter Jackson
10. 10. Gandhi by Richard Attenborough
11. 11. Amadeus by Milos Forman
12. 12. The girl with the pearl earring by Peter Webber
13. 13. La double vie de Veronique by Krzysztof Kieslowski
14. 14. The talented Mr. Ripley by Anthony Minghella
15. And
16. 15. Die Grosse Stille (Le Grand Silence / Into great silence) by Philip Groening

IASB: 03-31-09 Derecognition, Review of off balance sheet risk

The International Accounting Standards Board (IASB) today published for public comment an exposure draft of proposals to improve the derecognition requirements for financial instruments. Derecognition is when an entity removes a financial instrument from its financial statements. This occurs if the entity no longer controls a financial asset or no longer has an obligation to settle a financial liability.

The IASB is also proposing to enhance disclosure requirements, especially in situations where an entity continues to have an ongoing involvement in a financial asset that would be derecognised under the proposals. The additional disclosures would allow users to make a better assessment of the risks associated with such an asset.

The proposals are part of the IASB’s comprehensive review of off balance sheet activities and follow the publication of proposals in December 2008 to strengthen and improve the requirements for identifying which entities a company controls, known as consolidation.

The use of special structures by reporting entities, particularly banks, to manage securitisations and other complex financial arrangements was highlighted as a matter of concern by the G20 leaders at their meeting in Washington, DC, in November 2008. The IASB’s comprehensive review of off balance sheet risk is a response to that concern.

The IASB intends to hold public round tables to seek wider views on its derecognition and consolidation proposals and to broaden understanding of the interaction between the two projects. The IASB and the US Financial Accounting Standards Board (FASB) have already announced their intention that these will become joint projects once the FASB has completed short-term amendments to its existing standards.
Introducing the exposure draft, Sir David Tweedie, Chairman of the IASB, said:

This project has been on our agenda since before the financial crisis broke but the market turmoil has highlighted the urgency of the matter and we have accelerated our work. Financial structures have become increasingly complex and sophisticated, creating the need for improved ways of assessing whether an entity should derecognise assets or not. The financial crisis has also shown that users of financial statements require better information to understand any remaining risks related to assets that are off balance sheet. Our proposals are addressing these concerns.

The IASB will host two live web presentations to introduce its proposals. Dates will be announced on the IASB website shortly. An IASB ‘Snapshot’, a high level summary of the proposals, will also be available to download free of charge from the project section of the IASB website.

The IASB invites comments on the exposure draft, Derecognition, by 31 July 2009. The exposure draft is available on the ‘Open for Comment’ section on www.iasb.org from today

Printed copies of Derecognition (Proposed amendments to IAS 39 and IFRS 7) (ISBN 978-1-907026-04-1) will be available shortly at £10 plus shipping from the IASC Foundation Publications Department. Subscribers may also view the document on the eIFRS website. Those wishing to subscribe to eIFRSs should visit the online shop at www.iasb.org or contact:

IASC Foundation Publications Department,
30 Cannon Street, London EC4M 6XH, United Kingdom.
Tel: +44 (0)20 7332 2730 Fax +44 (0)20 7332 2749
Email: publications@iasb.org Web: www.iasb.org

The IASB plans to redeliberate the proposals in the light of respondents’ comments and to issue the resulting amendments to IFRSs in the second half of 2009.

Press enquiries

• Mark Byatt, Director of Corporate Communications, IASB
  Telephone: +44 (0)20 7246 6472,
  Email: mbyatt@iasb.org
• Sonja Horn, Communications Adviser, IASB
  Telephone: +44 (0)20 7246 6463
  Email: shorn@iasb.org

Technical inquiries:

• Gavin Francis, Director of Capital Markets, IASB
  Telephone: +44 (0)20 7246 6410,
  email: gfrancis@iasb.org

Auto: 03-31-09 GM & Chryler (Intervention, A Bridge Too Far)

from White House.gov Blog Feed

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download .mp4 | also available here | read the transcript

This morning the President announced that his Auto Task Force has completed its evaluation of the viability of General Motors and Chrysler in light of their requests for federal assistance. In addition to releasing the viability assessments, he also released a new policy with the American government guaranteeing warrantees for cars from those companies to ensure that if you have one it “will be safer than it’s ever been”:

• Fact Sheet on the New Path to Viability for GM & Chrysler (pdf)
  
• Warrantee Commitment Program Explanation (pdf)
  
• GM Viability Assessment (pdf)
  
• Chrysler Viability Assessment (pdf)
  

In the course of his remarks, the President pledged in no uncertain terms that he would not simply stand by and watch the American auto industry fail. He pledged to work with Congress on further action. And he made clear that the government has no interest in running these companies.

In broader terms, he laid out early what led to his decisions announced today, the bottom line being that the Task Force has determined the companies’ submitted plans to restructure simply do not go far enough:

And so today I’m announcing that my administration will offer GM and Chrysler a limited additional period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional taxpayer dollars.  During this period they must produce plans that would give the American people confidence in their long-term prospects for success.

Now, what we’re asking for is difficult.  It will require hard choices by companies.  It will require unions and workers who have already made extraordinarily painful concessions to do more.  It’ll require creditors to recognize that they can’t hold out for the prospect of endless government bailouts.  It’ll have to — it will require efforts from a whole host of other stakeholders, including dealers and suppliers.  Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry.

But I’m confident that if each are willing to do their part, if all of us are doing our part, then this restructuring, as painful as it will be in the short term, will mark not an end, but a new beginning for a great American industry — an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future.  I am absolutely committed to working with Congress and the auto companies to meet one goal:  The United States of America will lead the world in building the next generation of clean cars.

He laid out his prescription for GM:

GM has made a good faith effort to restructure over the past several months — but the plan that they’ve put forward is, in its current form, not strong enough.  However, after broad consultation with a range of industry experts and financial advisors, I’m absolutely confident that GM can rise again, providing that it undergoes a fundamental restructuring.  As an initial step, GM is announcing today that Rick Wagoner is stepping aside as Chairman and CEO.  This is not meant as a condemnation of Mr. Wagoner, who’s devoted his life to this company and has had a distinguished career; rather, it’s a recognition that will take new vision and new direction to create the GM of the future.

In this context, my administration will offer General Motors adequate working capital over the next 60 days.  And during this time, my team will be working closely with GM to produce a better business plan.  They must ask themselves:  Have they consolidated enough unprofitable brands?  Have they cleaned up their balance sheets, or are they still saddled with so much debt that they can’t make future investments?  Above all, have they created a credible model for how not only to survive, but to succeed in this competitive global market?

And he explained the differences underlying his prescription for Chrysler:

The situation at Chrysler is more challenging.  It’s with deep reluctance but also a clear-eyed recognition of the facts that we’ve determined, after careful review, that Chrysler needs a partner to remain viable.  Recently, Chrysler reached out and found what could be a potential partner — the international car company Fiat, where the current management team has executed an impressive turnaround.  Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to build — building new fuel-efficient cars and engines right here in the United States.  We’ve also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.

Still, such a deal would require an additional investment of taxpayer dollars, and there are a number of hurdles that must be overcome to make it work.  I’m committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers.  And that’s why we’ll give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement — and we will provide Chrysler with adequate capital to continue operating during that time.  If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed.  But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollars to keep Chrysler in business.

He ended on a hopeful note, however, making clear that his decisions were not made out of despair, but out of certainty that the ingenuity and determination Americans and these companies have shown for decades.

Paper: 03-31-09 The fiscal stimulus debate: “Bone-headed” and “Neanderthal”?

From Vox by Volker Wieland
Professor for Monetary Theory and Policy in the House of Finance at Goethe University of Frankfurt and Director of the Center for Financial Studies

US economic advisers called for aggressive fiscal stimulus, and some support further measures. But many macroeconomists are not so sure. This column analyses fiscal stimulus using a New Keynesian model that exemplifies contemporary academic thinking on the subject. It says that the spending multiplier is much lower than the Obama administration’s estimates – government spending may quickly crowd out private consumption and investment.

Not long ago, Paul Krugman warned European governments that

“We’re rapidly heading toward a world in which monetary policy has little or no traction, … Fiscal policy is all that’s left… if Germany prevents an effective European response, this adds significantly to the severity of the global downturn. … in short, there’s a huge multiplier effect at work; unfortunately, what it’s doing is multiplying the impact of the current German government’s boneheadedness.”

Financial Times columnist Martin Wolf, taking a look at the US and Japan (17 Feb 2009), asserted similarly

“The bad news is that the debate over fiscal policy in the US seems even more Neanderthal than in Japan: it cannot be stressed too strongly that in a balance-sheet deflation, with zero official interest rates, fiscal policy is all we have.”

This urgent, almost desperate call for aggressive fiscal stimulus was reinforced by the economic analysis of President Obama’s advisers Christina Romer and Jared Bernstein, which underscored the power of discretionary fiscal policy. In a paper circulated in January 2009, Romer and Bernstein provide numerical estimates of the impact of an increase in government spending on US GDP and employment. Such estimates are a crucial input for the policymaking process. They help determine the appropriate size and timing of countercyclical fiscal policy packages, and they inform parliaments and their constituents about whether a vote for a policy is appropriate.

Romer and Bernstein make use of two macroeconomic models – one from the staff of the Federal Reserve Board and the other from an unnamed private forecasting firm. Averaging the impacts obtained from these two models, they estimate that increasing government spending permanently by an amount equal to 1% of GDP would induce an increase in GDP of 1.6% above what it would have been otherwise. They conclude that a package similar in size to the American Recovery and Re-investment Act passed in February 2009 would raise GDP by 3% to 4% and create 3 to 4 million additional jobs by the end of 2010.

Stimulus doubts

Nevertheless, many macroeconomists still admit to substantial uncertainty about the quantitative effects of fiscal policy. This uncertainty derives not only from the empirical estimates of model parameters and shocks but also from different views on the appropriate theoretical framework and empirical method. In light of such model uncertainty, it is crucial to evaluate the robustness of particular policy proposals in different models with different assumptions. Cogan, Cwik, Taylor, and Wieland (2009) conduct such a robustness analysis with New Keynesian macroeconomic models. Nowadays such models are used by many central banks and international institutions. We report findings from two models, Taylor (1993) and Smets and Wouters (2007), but focus more on the latter model, which has been described as representative of the current New Keynesian macroeconomic thinking (see Woodford 2009).

Unfortunately, we find substantially smaller government spending multipliers than those used by Romer and Bernstein. For example, the multiplier associated with a permanent increase in government spending by the end of 2010 lies between 0.5 and 0.6. In other words, government spending does not induce additional private spending but instead quickly crowds out private consumption and investment.

We also provide an assessment of the impact of the American Recovery and Re-investment Act. This legislation implies measures amounting to $787 billion and spread over 2009 to 2013 but peaking in 2010. Our estimate of the total impact is closer to 1/6 of the effect estimated by Romer and Bernstein. By 2010 we project output to be about 0.65% higher. Using the same rule-of-thumb as Romer and Bernstein, this increase in GDP would translate to about 600,000 additional jobs rather than three to four million.
Why is our assessment of government spending multipliers so different? Well, first of all Romer and Bernstein constrain the Fed to keep interests rates constant at zero forever.

Such an interest rate peg would lead to explosive behaviour and instability in New Keynesian models. Instead we allow the Fed to raise rates eventually, starting in 2011, or more realistically, in 2010. Committing to 1 or 2 years of zero interest rates still implies much additional monetary stimulus. Furthermore, people out there worry about the future. Thus, the models we use take into account that forward-looking households and firms will modify their expectations and change their behaviour in response to the new fiscal policy measures.

Finally, at least some people out there realise that higher government spending and debt today ultimately require raising more taxes in the future. Such households will consume less today. This negative wealth effect is particularly strong in the Smets and Wouters analysis. The model by Taylor implicitly allows for the presence of some consumers who consume all of their current income.

Fiscal policy focus

In light of these findings, European policy makers are well-advised to question the usefulness of further stimulus packages. They ought to carefully monitor the impact of decisions already taken on the burden imposed on future taxpayers. The available funds and remaining borrowing capacity should be utilised where it is still most needed – to prevent a collapse of the financial system and finance the necessary re-capitalisations and toxic asset removals. If governments exhaust their fiscal space in measures that have little aggregate effect, they will instead stimulate scepticism of their capability to back up the financial system.

Thus, it remains crucial to focus fiscal efforts on the financial front.

What else can be done? Monetary policy is still an option. Sure, nominal interest rates cannot decline below zero. This is a serious constraint on conventional interest rate policy. However, monetary expansion remains feasible, and increasing the relative supply of base money to other assets will lower its value. In other words, the central bank can stimulate inflation and reduce real interest rates by means of quantitative easing if necessary (see Orphanides and Wieland 2000).

References

Cogan, John, Tobias, Cwik, John B. Taylor and Volker Wieland (2009), “New Keynesian versus Old Keynesian Government Spending Multipliers”, CEPR Discussion Paper 7236, March 2009.

Orphanides and Wieland, (2000), Efficient Monetary Policy Design Near Price Stability, Journal of the Japanese and International Economies, 14, 327-365.

Romer, Christina and Jared Bernstein (2009), “The Job Impact of the American Recovery and Reinvestment Plan”, January 8, 2009.

Smets, Frank and Raf Wouters (2007), “Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach”, American Economic Review 97, 3: 506-606.

Taylor, John B. (1993), Macroeconomic Policy in a World Economy: From Econometric Design to Practical Operation, WW Norton, New York.

Woodford, Michael (2009), “Convergence in Macroeconomics: Elements of the New Synthesis”, American Economic Journal: Macroeconomics, Vol. 1, No. 1, 267-279.

Central Banking: 03-31-09 Response to the crisis by the Basel Committee

30Mar/Initiatives in response to the crisis by the Basel Committee

from BIS press releases

Press release on the Basel Committee on initiatives in response to the crisis – March 2009 (BIS Press Releases 30 March 2009)

Central Banking: 03-31-09 Speeches, Remarks, Annoucements, From ECB

27 Mar Press release The expectations of the Eurosystem as regards the future of SEPA

from ECB – European Central Bank

30 Mar Speech Lorenzo Bini Smaghi: Developments and Prospects for the European Economy in 2009

from ECB – European Central Bank

30 Mar Speech Jean-Claude Trichet: Hearing before the Economic and Monetary Affairs Committee of the European Parliament

from ECB – European Central Bank

Congress: 03-32-09 Hearing Credit Cardholders’ Bill of Rights Legislation

Washington, DC – Rep. Barney Frank (D-MA), chairman of the House Committee on Financial Services, today announced that the Subcommittee on Financial Institutions and Consumer Credit will meet on Wednesday, April 1, to consider H.R. 627, the “Credit Cardholders’ Bill of Rights Act of 2009.”

This credit card reform legislation, introduced by Rep. Carolyn Maloney (D-NY), is aimed at leveling the playing field between credit card companies and consumers and abolishes industry abuses that have been described by regulators as “unfair,” “deceptive” and “anti-competitive.”

“My bill represents a great step forward for consumers. It would ban retroactive interest rate hikes on existing balances, double-cycle billing, due-date gimmicks, and increases the advance notice of impending rate hikes — giving cardholders the information and rights they deserve to make decisions about their own financial lives,” Rep. Maloney said. “For too long, credit cardholders have lost the ability to say no to unfair interest rate hikes and fees. My bill would start to rectify that.”

Central Banking: 03-31-09 Speeches, Remarks, Announcements

30Mar/Initiatives in response to the crisis by the Basel Committee

from Bank for International Settlements

Press release on the Basel Committee on initiatives in response to the crisis – March 2009 (BIS Press Releases 30 March 2009)

30Mar/Lucas Papademos: How to deal with the global financial crisis and promote the economy’s recovery and sustained growth

from Bank for International Settlements

Speech by Mr Lucas Papademos, Vice President of the European Central Bank, at the 7th European Business Summit organised by the European Business Forum, Brussels, 26 March 2009.

30Mar/Hirohide Yamaguchi: Recent economic and financial developments and the conduct of monetary policy

from Bank for International Settlements

Speech by Mr Hirohide Yamaguchi, Deputy Governor of the Bank of Japan, at a Meeting with Business Leaders, Otaru, 25 March 2009.

30Mar/Barbro Wickman-Parak: What can monetary policy achieve?

from Bank for International Settlements

Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at a meeting, Karlstad, 27 March 2009.

30Mar/Amando M Tetangco, Jr: Financial stability through collaboration and understanding

from Bank for International Settlements

Speech by Mr Amando M Tetangco, Jr, Governor of the Central Bank of the Philippines (Bangko Sentral ng Pilipinas), at the Insurance Congress of Developing Countries (ICDC) 2009, Makati City, 25 March 2009.

30Mar/Mario Draghi: Fact-finding on issues affecting the banking and financial system

from Bank for International Settlements

Testimony of Mr Mario Draghi, Governor of the Bank of Italy and Chairman of the Financial Stability Forum, before the Finance Committee of the Chamber of Deputies, Chamber of Deputies, Rome, 17 March 2009.

30Mar/Nout Wellink: Basel Committee initiatives in response to the financial crisis

from Bank for International Settlements

Remarks by Dr Nout Wellink, President of the Netherlands Bank and Chairman of the Basel Committee on Banking Supervision, before the Committee on Economic and Monetary Affairs of the European Parliament (ECON), Brussels, 30 March 2009.

UAF: 03-31-09 Monster.Com Diversity Leadership Program (DLP)

Students, I received this e-mail. You might be interested. Let me know and I will send for the material. wayne

Dear Wayne Marr,

Last year, students at University of Alaska Fairbanks had an opportunity in Monster’s Diversity Leadership Program (DLP) that helped advance their lives personally and professionally.   My hope is that, after reviewing this email and our website (www.MonsterDLP.com), you will share DLP with students on your campus again! Monster.com offers the free weekend program to rising sophomores, juniors and seniors who want to network with top organizations, learn key career and leadership skills, and meet peers from around the country.  Students pursuing degrees of all majors are encouraged to attend for the great networking opportunities! The application deadline is May 30th, so if you find that DLP would benefit your students, we kindly ask that tell them about it soon!  Students apply online at www.MonsterDLP.com.

The application process is simple and takes under 10 minutes.

If selected, student participants will gain:

• Instant feedback on their resumes and interview style relevant to their career interests!
• Numerous opportunities for college scholarships and great prizes!  Last year, over $98,000 was given away.
• A network of contacts and mentors from industry-leading companies that will guide them to finding their passion in life!
• Connection to 300 student-leaders from hundreds of universities around the country.  Opportunities to build friendships are just inevitable!
• An unforgettable experience at our expense!  These dynamic events make for an unforgettable weekend when students only have to pay for transportation to and from the event.

If you think the Monster Diversity Leadership Programs would help your students, please email me at Chenney.Chen@Monster.com so I can provide you with descriptive text that you can customize and send out to appropriate campus list-servs. (Career Centers, Diversity offices, honors programs, multicultural offices).   We can also provide you with marketing materials to help drive more students to success through Monster’s leadership programs.

In advance, thanks for your consideration.

Sincerely,

Chenney Chen

Monster Diversity Leadership Programs
www.MonsterDLP.com
Connect.  Learn. Be Inspired.

Central Banking : 03-31-09 Working Papers

25Mar/In search of monetary stability: the evolution of monetary policy

from BIS Working Papers

Abstract of BIS Working Papers No 273

25Mar/Talking about monetary policy: the virtues (and vice?) of central bank communication

from BIS Working Papers

Abstract of BIS Working Papers No 274

25Mar/Has the monetary transmission process in the euro area changed? Evidence vased on VAR estimates

from BIS Working Papers

Abstract of BIS Working Papers No 276

25Mar/China’s financial conundrum and global imbalances

from BIS Working Papers

Abstract of BIS Working Papers No 277

25Mar/Credit frictions and optimal monetary policy

from BIS Working Papers

Abstract of BIS Working Papers No 278

26Mar/The pricing of subprime mortgage risk in good times and bad: evidence from the ABX.HE indices

from BIS Working Papers

Abstract of BIS Working Papers No 279