Economics and Finance

1908 Submissions

[7] viXra:1908.0565 [pdf] submitted on 2019-08-27 07:50:28

Health Insurance Funds that Manage Money Without Saving it

Authors: Dimiter Dobrev
Comments: 8 Pages. Bulgarian language

There is no need for the health insurance fund to collect health contributions and then to pay for the activities carried out with that money. It is better if the National health insurance fund collects the money and keeps it and the health fund only manages it without actually passing the money through it. This eliminates the risk of bankruptcy of the fund and the need to create a guarantee fund. So changing the fund will be very easy, because no real money will be moved, but only the subject that manages it will change.
Category: Economics and Finance

[6] viXra:1908.0532 [pdf] replaced on 2019-10-25 06:48:41

How to Get Rid of a Debt Based Money System

Authors: Ivo Van Der Rijt
Comments: 10 Pages.

Solution on how to get rid of money.
Category: Economics and Finance

[5] viXra:1908.0526 [pdf] submitted on 2019-08-27 04:43:42

Contamination of Farms by Genetically Modified Organisms (GMOs): Options for Compensation

Authors: John Paull
Comments: 16 Pages.

There is no satisfactory legal remedy for farmers in Australia whose farm has been contaminated by genetically modified (GM) material. This is a deficiency of Australia’s Gene Technology Act 2000 and it has not been remedied. In the Marsh v Baxter case (2010-2016) an organic farm in Western Australia (WA) was contaminated with GM canola from a neighbouring farm. The organic farm lost its certification (along with the price premium for organic produce). The organic farmer (Marsh) sued the GM farmer (Baxter) for the agreed damages of A$85,000. The case was lost in the WA Supreme Court, then in the Court of Appeal, and finally it was rejected by the High Court of Australia. The legal fees were in the order of A$2,000,000, which is quite disproportionate to the agreed loss. A Parliamentary Inquiry (2017-2019) in WA examined “Mechanisms for compensation for economic loss to farmers in Western Australia caused by contamination by genetically modified material”. There were 121 submissions to the Inquiry and 22 public hearings. Seven ‘mechanisms’ were considered: (i) Do nothing; (ii) a GM Levy; (iii) a GM Technology Licence Bond; (iv) Non-GM farmer Insurance; (v) GM farmer Insurance; (vi) a Compulsory Third Party (CTP) GM Scheme; and, (vii) the Government pays. After its deliberations, the Standing Committee on Environment and Public Affairs did not recommend any change from the present unsatisfactory state of affairs where reliance on the common law offers no effective protection for non-GM farmers against contamination by genetically modified organisms (GMOs) (as witnessed in the Marsh v Baxter case). The ‘Do nothing’ option, which was supported by Monsanto and pro-GM farmer groups, prevailed. This paper explores the context and content of the Parliamentary Inquiry, presents the six proposed proactive options for compensation (of which only four appeared in the Inquiry Report), and the twelve findings of the Inquiry. Ultimately the Committee was timid where it might have been bold. The Inquiry was a lost opportunity for righting a known wrong. The Inquiry outcome will ensure that GM-farming remains a very contentious issue in WA and continues to lack any semblance of a social licence. However, the WA Parliamentary Inquiry (in toto, viz. the submissions, the hearings, and the Report) provides a rich trove of views and material for legislators and regulators in other jurisdictions who face the exact same issue of GM contaminations.
Category: Economics and Finance

[4] viXra:1908.0499 [pdf] submitted on 2019-08-24 08:32:12

Bilateral Defaultable Financial Derivatives Pricing and Credit Valuation Adjustment

Authors: Xiao, Tim
Comments: 19 Pages.

The one-side defaultable financial derivatives valuation problems have been studied extensively, but the valuation of bilateral derivatives with asymmetric credit qualities is still lacking convincing mechanism. This paper presents an analytical model for valuing derivatives subject to default by both counterparties. The default-free interest rates are modeled by the Market Models, while the default time is modeled by the reduced-form model as the first jump of a time-inhomogeneous Poisson process. All quantities modeled are market-observable. The closed-form solution gives us a better understanding of the impact of the credit asymmetry on swap value, credit value adjustment, swap rate and swap spread.
Category: Economics and Finance

[3] viXra:1908.0331 [pdf] submitted on 2019-08-15 19:02:29

Pricing Financial Derivatives Subject to Multilateral Credit Risk and Collateralization

Authors: Xiao, Tim
Comments: 26 Pages.

This article presents a new model for valuing financial contracts subject to credit risk and collateralization. Examples include the valuation of a credit default swap (CDS) contract that is affected by the trilateral credit risk of the buyer, seller and reference entity. We show that default dependency has a significant impact on asset pricing. In fact, correlated default risk is one of the most pervasive threats in financial markets. We also show that a fully collateralized CDS is not equivalent to a risk-free one. In other words, full collateralization cannot eliminate counterparty risk completely in the CDS market.
Category: Economics and Finance

[2] viXra:1908.0201 [pdf] submitted on 2019-08-10 08:13:31

Incremental Risk Charge Methodology

Authors: Xiao, Tim
Comments: 18 Pages.

The incremental risk charge (IRC) is a new regulatory requirement from the Basel Committee in response to the recent financial crisis. Notably few models for IRC have been developed in the literature. This paper proposes a methodology consisting of two Monte Carlo simulations. The first Monte Carlo simulation simulates default, migration, and concentration in an integrated way. Combining with full re-valuation, the loss distribution at the first liquidity horizon for a subportfolio can be generated. The second Monte Carlo simulation is the random draws based on the constant level of risk assumption. It convolutes the copies of the single loss distribution to produce one year loss distribution. The aggregation of different subportfolios with different liquidity horizons is addressed. Moreover, the methodology for equity is also included, even though it is optional in IRC.
Category: Economics and Finance

[1] viXra:1908.0192 [pdf] replaced on 2019-08-11 22:44:03

Krugmanomics Doesn't Check Out

Authors: Miguel A. Sanchez-Rey
Comments: 3 Pages.

Skepticism and long-term prospect.
Category: Economics and Finance