PRESS-NEWS.org - Press Release Distribution
PRESS RELEASES DISTRIBUTION

Risk of financial crisis higher than previously estimated

2015-09-02
(Press-News.org) The study, published in the journal Financial Stability, introduces a new method that allows researchers to estimate the systemic risk that emerge from multiple layers of connectivity. "Systemic risk is the risk that a significant part of the financial system stops working--that it cannot perform its function," says IIASA Advanced Systems Analysis program researcher Sebastian Poledna, who led the study. For example if a major bank fails, it could trigger the failure of other financial institutions that are linked to it through loans, derivatives, securities, and foreign exchange exposure. The fear of such contagion is what drives governments to bail out banks. "Previous studies of systemic risk had just examined one layer of this system, the interbank loans," says Poledna. The new study expands this to include three other layers of connectivity: derivatives, securities, and foreign exchange. By including the other layers, Poledna and colleagues found that the actual risk was 90% higher than the risk just from interbank loans. Currently, financial regulators tend to use market-based measures to estimate systemic risk. The researchers find that these measures also underestimate the actual risk. In Mexico, which the researchers used as a case study, they found that systemic risk levels are about four times higher today than before the financial crisis--yet these risks are not reflected in market-based measures. "Banks today are far more connected than they were before the financial crisis," explains Poledna. "This means that in a new crisis, the public costs for Mexico could be four times higher than those experienced in the last crisis," The new method would make it possible to create systemic risk profiles for markets and individual institutions, which could prove useful for financial regulators aiming to prevent future crises. In addition, the methodology provides a way to estimate the cost and repercussions of a bank failure, which could help financial policymakers determine whether a bailout would be worth the cost. Bank bailouts come at a huge cost to taxpayers, yet until now, there has been no clear method of determining the cost to the system of not bailing out a failing bank. Poledna points out that the new method may still underestimate systemic risk, as it leaves out two additional potential sources of risk - overlapping investment portfolios, and funding liquidity. The researchers are now working in collaboration with the IIASA Risk, Policy and Vulnerability program on a new study that brings in these additional layers. The study relied on data from the Mexican banking system but the researchers say that the method could be used for any country, as long as the data were available.

INFORMATION:

Reference:

Poledna A. Molina-Borboa JL, Martinez-Jaramillo S, van der Leij M, Thurner S (2015). The multi-layer network nature of systemic risk and its implications for the costs of financial crises. Financial Stability. http://dx.doi.org/10.1016/j.jfs.2015.08.001

For more information contact:

Sebastian Poledna Research Scholar
Risk Policy and Vulnerability
Advanced Systems Analysis
+43(0) 2236 807 261
poledna@iiasa.ac.at


Stefan Thurner Senior Research Scholar
Advanced Systems Analysis
+43(0) 2236 807 380
thurner@iiasa.ac.at


Katherine Leitzell IIASA Press Office
Tel: +43 2236 807 316
Mob: +43 676 83 807 316
leitzell@iiasa.ac.at


About IIASA:

The International Institute for Applied Systems Analysis (IIASA) is an international scientific institute that conducts research into the critical issues of global environmental, economic, technological, and social change that we face in the twenty-first century. Our findings provide valuable options to policy makers to shape the future of our changing world. IIASA is independent and funded by scientific institutions in Africa, the Americas, Asia, Oceania, and Europe. http://www.iiasa.ac.at



ELSE PRESS RELEASES FROM THIS DATE:

Waste coffee used as fuel storage

2015-09-02
Scientists have developed a simple process to treat waste coffee grounds to allow them to store methane. The simple soak and heating process develops a carbon capture material with the additional environmental benefits of recycling a waste product. The results are published today, 03 September 2015, in the journal Nanotechnology. Methane capture and storage provides a double environmental return - it removes a harmful greenhouse gas from the atmosphere that can then be used as a fuel that is cleaner than other fossil fuels. The process developed by the researchers, ...

Biodiversity belowground is just as important as aboveground

Biodiversity belowground is just as important as aboveground
2015-09-02
Although most of the world's biodiversity is below ground, surprisingly little is known about how it affects ecosystems or how it will be affected by climate change. A new study demonstrates that soil bacteria and the richness of animal species belowground play a key role in regulating a whole suite of ecosystem functions on Earth. The authors call for far more attention to this overlooked world of worms, bugs and bacteria in the soil. Ecosystem functions such as carbon storage and the availability of nutrients are linked to the bugs, bacteria and other microscopic ...

Cellular recycling complexes may hold key to chemotherapy resistance

2015-09-02
CAMBRIDGE, Mass. (September 2, 2015) - Altering the protein recycling complexes in human cells, including cancer cells, allows the cells to resist treatment with a class of drugs known as proteasome inhibitors, according to Whitehead Institute scientists. "This is why some cancers can be so difficult to treat with chemotherapy, because the cells can be in different states--some sensitive to treatment and some resistant to treatment, all in the same tumor," says Sandro Santagata, a former visiting scientist in the lab of Whitehead Member Susan Lindquist. Santagata is now ...

Male seahorse and human pregnancies remarkably alike

Male seahorse and human pregnancies remarkably alike
2015-09-02
Their pregnancies are carried by the males but, when it comes to breeding, seahorses have more in common with humans than previously thought, new research from the University of Sydney reveals. Seahorses are famed for being part of the only family in the animal kingdom (Syngnathidae) in which the male is responsible for pregnancy. What hasn't been known until now is the degree to which male seahorses nourish and protect their embryos in their brood pouch during the 24-day gestation period. Findings co-authored by Dr Camilla Whittington from the University's School of ...

Scientists discover a common diabetes drug could prevent hemorrhage and fatal blood loss

2015-09-02
A new study, published today in the British Journal of Pharmacology, by scientists from Royal Holloway, University of London, St George's, University of London and University of Surrey have identified that a drug related to commonly used diabetes treatments provides protection against terminal blood loss. Massive blood loss often leads to death, and when blood transfusions are unavailable, drugs are currently being tested that can keep people alive until they get to hospital. Understanding how these drugs work, and finding improved drugs, has up to now proved difficult. ...

When stroke patients undergo surgery to remove blood clots, what anesthesia works best?

2015-09-01
MAYWOOD, Ill. - In carefully selected patients, minimally invasive surgery is enabling physicians to stop strokes in their tracks. And as more stroke patients undergo such procedures, physicians are debating the best way to anesthetize them. Should patients be put under general anesthesia, rendering them unconscious and motionless? Or should they undergo conscious sedation, in which they remain conscious, but are sedated and do not feel pain? In the September, 2015 issue of the Journal of Stroke and Cerebrovascular Diseases, Loyola University Medical center anesthesiologists ...

Self-driving golf carts

2015-09-01
At the International Conference on Intelligent Robots and Systems in September, members of the Singapore-MIT Alliance for Research and Technology (SMART) and their colleagues will describe an experiment conducted over six days at a large public garden in Singapore, in which self-driving golf carts ferried 500 tourists around winding paths trafficked by pedestrians, bicyclists, and the occasional monitor lizard. The experiments also tested an online booking system that enabled visitors to schedule pickups and drop-offs at any of 10 distinct stations scattered around the ...

Surge in Bicycle Injuries to Riders Over 45

2015-09-01
The incidence of bicycle accidents has increased significantly in the U.S. in recent years, with many serious injuries occurring among riders older than 45, according to a new study led by UC San Francisco. The researchers used a national injury surveillance database to study trends in bicycle injuries from 1998 to 2013. They found that the rate of hospital admissions associated with bicycle injuries more than doubled during that timeframe, especially with head and torso injuries. Altogether, the proportion of injuries occurring to riders above age 45 rose 81 percent, ...

Ancient hybridization key to domestic dog's origin, wolf conservation efforts

2015-09-01
KNOXVILLE--The ancestry of man's best friend may be more complicated than its furry coat and soulful eyes betray. Understanding the evolutionary history of the domesticated dog may ultimately help protect endangered wolves, according to a study from the University of Tennessee, Knoxville. Vladimir Dinets, research assistant professor of psychology, has published an overview examining the confusing and often misunderstood system used to classify dogs and related animals such as wolves and jackals. He has proposed a logical and scientifically sound classification scheme ...

New international standards needed to manage ocean noise

2015-09-01
DURHAM, N.C. -- As governments and industries expand their use of high-decibel seismic surveys to explore the ocean bottom for resources, experts from eight universities and environmental organizations are calling for new global standards and mitigation strategies. Their goal is to minimize the amount of sound the surveys produce and reduce risks the surveys and other underwater human noise pollution poses to vulnerable marine life. Firms and agencies conducting the surveys would benefit from these new measures, the experts assert, because instead of having to navigate ...

LAST 30 PRESS RELEASES:

Genetic causes of cerebral palsy uncovered through whole-genome sequencing

Modesty and boastfulness – perception depends on usual performance

Do sweeteners increase your appetite? New evidence from randomised controlled trial says no 

Women with obesity do not need to gain weight during pregnancy, new study suggests

Individuals with multiple sclerosis face substantially greater risk of hospitalisation and death from COVID-19, despite high rates of vaccination

Study shows obesity in childhood associated with a more than doubling of risk of developing multiple sclerosis in early adulthood

Rice Emerging Scholars Program receives $2.5M NSF grant to boost STEM education

Virtual rehabilitation provides benefits for stroke recovery

Generative AI develops potential new drugs for antibiotic-resistant bacteria

Biofuels could help island nations survive a global catastrophe, study suggests

NJIT research team discovering how fluids behave in nanopores with NSF grant

New study shows association of historical housing discrimination and shortfalls in colon cancer treatment

Social media use may help to empower plastic surgery patients

Q&A: How to train AI when you don't have enough data

Wayne State University researchers uncover potential treatment targets for Zika virus-related eye abnormalities

Discovering Van Gogh in the wild: scientists unveil a new gecko species

Small birds spice up the already diverse diet of spotted hyenas in Namibia

Imaging detects transient “hypoxic pockets” in the mouse brain

Dissolved organic matter could be used to track and improve the health of freshwaters

Indoor air quality standards in public buildings would boost health and economy, say international experts

Positive associations between premenstrual disorders and perinatal depression

New imaging method illuminates oxygen's journey in the brain

Researchers discover key gene for toxic alkaloid in barley

New approach to monitoring freshwater quality can identify sources of pollution, and predict their effects

Bidirectional link between premenstrual disorders and perinatal depression

Cell division quality control ‘stopwatch’ uncovered

Vaccine protects cattle from bovine tuberculosis, may eliminate disease

Andrew Siemion to receive the SETI Institute’s 2024 Drake Award

New study shows how the Crimean-Congo hemorrhagic fever virus enters our cells

Neoadjuvant chemotherapy proves effective for locally advanced penile squamous cell carcinoma

[Press-News.org] Risk of financial crisis higher than previously estimated