Business & Economics | Encyclopedia MDPI

Topic Review

Climate change creates financial risks to the safety and soundness of banks, insurers and the wider financial system, posing a significant threat to the stability of the financial system. Climate-related financial and sustainability risks are already starting to crystallise and have the potential to increase substantially in the future. For instance, physical risks that arise from increasing the severity and frequency of climate and weather-related events may lead to a reduction in asset values, a fall in profitability and an increase in the cost of settling underwriting losses for insurers. On the other hand, adjustment towards a carbon-neutral economy may prompt a reassessment of asset values, a fluctuation in energy prices, and a deterioration of the creditworthiness of borrowers, potentially leading to credit losses. While there is a pressing need for central banks, regulators and financial institutions to accelerate their capacity to assess and manage such financial risks that may result from climate change, academic research will be a key impetus to drive and support the ongoing efforts of the financial sector and the regulatory bodies in building capacity to address these risks.

1.0K
15 Jul 2020

Topic Review

Vectoring & Fractalisation Of Fiscal Stress

Never before like pan global contagion pandemic COVID-19 has intensely up-regulated stress on the indo money-market domains. Authors try to see the light at end of tunnel. Consider direct finance to consumers as the anti-dote; termed as fractalisation; vectoring; and granulation of stress. Heritage structure as cue and parable. Identify the internal causes of an obstinate stress causers and Ayurvedic sector as the green field opportunity.

805
14 Jul 2020

Topic Review

Urban Fragility

Urban fragility is one of the big challenges for the late-modern city coping with the growing external pressures (from the environment) and internal tensions (within the social system), typically referable to the socio-cultural and political-economic climate, definitely characterising the current "Age of Changes". A broad institutional context is involved in that undertaking, and many studies and reports show how fragility is linked above all to the growing complexity of the cities. The ever-increasing population, extension, density and cultural mixite, as well as the fast “filtering up and down” processes, are some symptoms of the combination of two fundamental drivers. Firstly, the exponential technological progress—mostly concerning the geographical and digital accessibility—has been encouraging far more people to claim a better socio-economic status, which urban location, by definition, is symbol of. Secondly, the progressive human/environmental unfairness of economy over the planet and the related increase in insecurity, push the transfer of large masses of the population towards the richer countries of the developed geo-economic areas, and in particular towards the larger, more heterogeneous, complex and vibrant cities. This new climate involves the accountability of the neoliberal model allowing a limited number of subjects to concentrate the largest part of the liquidity created as a result of the progressive “financial abstraction” of the real wealth over the era of post-globalization, that is the age of the contemporary archipelago-economies. The development of the city has always gone together with the spread and reinforcement of the financial institutions more able to give a monetary shape to the flows of wealth, thus indirectly increasing the part of the surplus of social product intended to the social overhead capital; the latter is at the same time cause and effect of the concentration of wealth and people, activities and tensions, conflicts and hopes (in one word, of value) in urban shapes. On the urban-scale, in turn, such processes have been occurring creating and populating denser and denser built areas at the expenses of other ones (decaying historic centers or peripheral neighborhoods) progressively neglected and jeopardized. The coexistence of such different value density degrees increases the fragility of the city as a whole; the most visible and permanent tracks of these inequalities reflect in the urban shape and namely in its economic form that is the urban capital value shape, displayed by the real estate market price map. Some remarks about the concept of fragility in the field of territorial studies can help to better understand how the urban eco-social system deals with it. The perspective of the “real estate-scape”, in fact, assumes the social and urban fragility issue, since one of the main focuses of the urban renovation planning process in its broad lines. The colloquial meaning of “fragility” closely relates to its physical definition concerning the tendency of a solid material to break abruptly, without any yielding deformation, which has previously occurred. In the urban studies some insights need to be done to understand a conceptual significance of fragility, considering its original causes and those effects typically concerning the current drift of the urban phenomenon. Since the above early definition does not take into account the driving forces of the urban fragility and their most perceptible effects, a further and more extensive meaning of it can be derived from material sciences, thus highlighting the deep and constitutive causes of it. Fragility is “the property that characterizes how rapidly the dynamics of a material slow down as it is cooled toward the glass transition: materials with a higher fragility have a relatively narrow glass transition temperature range, while those with low fragility have a relatively broad glass transition temperature range”. By metaphorizing such definition, and referring to the relationship between the socio-economic situation of a city and the real estate capital asset value, an urban system can be considered more fragile when the “socio-economic cooling” (i.e., a decrease in rights and incomes) gives rise to sudden, pathological and irreversible fall of the real estate market prices; on the contrary, an urban system seems to be more resilient when such effects are slower and easily metabolized, and can also be reversed when an opposite cause occurs. Furthermore, “physically, fragility may be related to the presence of dynamical heterogeneity in glasses, as well as to the breakdown of the usual Stokes–Einstein relationship between viscosity and diffusion”.

1.6K
14 Jul 2020

Topic Review

Performance Evaluation of the Board of Directors

Abstract: Purpose: The objectives of this paper are to analyse both individual and overall performance evaluations of the Board of Directors as carried out by Maltese Listed Companies (MLCs) and to assess the importance of such board evaluations to small shareholders. Design/Approach/Methodology: The study was designed around semi-structured interviews with fifteen MLC representatives and seven stockbrokers, as well as questionnaires administered to twenty-nine small shareholders. Findings: The findings indicate that, while Boards of Director evaluations are carried out in MLCs, they lack the necessary formal structures that specify critical evaluation measures. Thus one may infer that those charged with the responsibility of conducting evaluations are not being well determined. By departing from the recommendations of the Maltese Corporate Governance Code on performance evaluations, MLCs have generally opted to resort to an inward and more restricted style of evaluation, doing away with external or independent parties in the process. Practical Implications: Recommendations include the promotion of shareholder interest by enhancing their awareness of the benefits they will stand to gain from the process and by involving them more in the process. Originality/Value: The paper considers possible evaluation measures that may be aimed to enhance both shareholder and public confidence in the exercise and also other ways by which it may be improved. It thus contributes to the literature, as yet scarce, which relates to corporate governance in small states. Keywords: Performance evaluation, corporate governance, board of directors, MLCs. JEL code: G34. Paper type: Research article.

3.9K
28 May 2020

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