Koen Schoors

A Shapley decomposition of carbon emissions without residuals

Abstract Conventional decomposition techniques for historical evolutions of carbon emissions present path dependent factor weights of selected variables next to significant residuals. Especially for analyses over long periods with many variables, high residuals make it almost impossible to derive reliable conclusions. As an alternative, we present the Shapley decomposition technique for carbon emissions over the period 1960–1996. This technique makes it possible to present a correct and symmetric decomposition without residuals. The starting point of our analysis was an extended Kaya Identity with nine components. In a study of four countries, the Shapley decomposition showed that the carbon intensity of energy use and the decarbonization of economic growth—variables that are targeted with current climate policy measures—have more effect on total emissions than generally suggested in conventional decomposition exercises. Another interesting conclusion from our analysis was that the effect of population growth on emissions can be for some countries more important than the decarbonization efforts.

Are Private Banks More Efficient than Public Banks? Evidence from Russia

We study whether bank efficiency is related to bank ownership in Russia. We find that foreign banks are more efficient than domestic private banks and - surprisingly - that domes-tic private banks are not more efficient than domestic public banks. These results are not driven by the choice of production process, the banks environment, managements risk preferences. the banks activity mix or size, or the econometric approach. The evidence in fnicl suggests that domestic public banks arc more efficient than domestic private banks and that the efficiency gap between these two ownership types did not narrow after the introduction of deposit insurance in 2004. This may be due to increased switching costs or to the moral hazard effects of deposit insurance. The policy conclusion is that the efficiency of the Russian banking system may benefit more from increased levels of competition and greater access of foreign banks than from bank privatization. JEL classification: G21; P30; P34; P52 Keywords: Bank efficiency; state ownership; foreign ownership; Russia

The Fate of Russia's Former State Banks: Chronicle of a Restructuring Postponed and a Crisis Foretold

TRANSITION IN CENTRAL AND EASTERN EUROPE has come a long way. One of the crucial components of a smoothly functioning market economy is an efficient and stable commercial banking system. In all countries of the former communist bloc reformers have been faced with the transformation of the inherited monobank system to a two-tier banking system with a central bank and commercial banks. The restructuring and privatisation of the existing state-owned bank institutions is one of the major challenges in this respect. It has been a long and painful process that remains incomplete in many countries. For Russia and some other former Soviet republics, the literature refers to the privatisation of the former specialised banks (spetsbanki) as a secessionist process that ensued without previous bank restructuring. The much needed restructuring of the former spetsbanki has been pending ever since. The number of former spetsbanki in financial trouble gradually increased, until a final blow was dealt by the August 1998 crisis. The main contribution of this article is the empirical analysis of the behaviour of spetsbanki descendants as a group. The descendants of the former spetsbanki appear to have higher labour costs, poorer loan quality, higher loan rates and marginally lower capital than other banks. This cannot be explained by initial conditions as we measure at a point in time at least 3–5 years after their creation. This shows that the spetsbanki were reluctant to restructure and helps to explain why most of them have since failed. The article starts with a descriptive analysis of the fate of large specialised banks (spetsbanki) in post-communist Russia. I then proceed with an empirical analysis that establishes new stylised facts common to all descendants of the former state banks, including the smaller ones that are less well-known. The final section summarises and concludes.

Are private banks more efficient than public banks

We study whether bank efficiency is related to bank ownership in Russia. We find that foreign banks are more efficient than domestic private banks and, surprisingly, that domestic private banks are not more efficient than domestic public banks. These results are not driven by the choice of production process, the bank’s environment, management’s risk preferences, the bank’s activity mix or size, the econometric approach, or the introduction of deposit insurance. The policy conclusion is that the efficiency of the Russian banking system may benefit more from increased levels of competition and greater access of foreign banks than from bank privatization.

FDI and the Consequences Towards More Complete Capture of Spillover Effects

We analyze productivity spillovers of FDI on domestic companies, both within and across industries. In the identification of intraindustry spillovers, we separate out labor market effects from other effects. Interindustry spillovers are identified through upstream, downstream, and supply-backward linkage effects. Dynamic input output tables are used to construct the linkages. For a panel of Romanian firms, we find evidence that labor market effects differ from other intraindustry effects. Spillovers across industries dominate those within industries. The supply-backward effect behaves as predicted by theory. Firm-specific level of technology, firm size, and ownership structure are all found to affect spillovers.

Bank supervision Russian style: rules versus enforcement and tacit objectives

We focus on the con.ict between two central bank objectives individual bank stability and systemic stability.We study the licensing policy of the Central Bank of Russia (CBR) during 1999.2002.Banks in poorly banked regions, banks that are too big to be disciplined adequately, and banks that are active on the interbank market enjoy protection from license withdrawal, which suggests a tacit concern for systemic stability.The CBR is also found reluctant to with- draw licenses from banks that violate the individuals deposits-to-capital ratio as this conflicts with the tacit CBR objective to secure depositor confidence and systemic stability.Keywords: Bank supervision, bank crisis, Russia.JEL Classification : G2 N2 E5

How to Catch Foreign Fish? FDI and Privatization in EU Accession Countries

In a partial adjustment framework the observed FDI stock is the result of two driving forces. First, the stock converges towards its equilibrium level, even without policy changes. Second, the equilibrium level itself is driven by changes in its determinants. By means of a dynamic panel data analysis we examine the determinants of investment by ‘old’ EU-members in ten countries of Central and Eastern Europe. We find a rapid adjustment towards equilibrium. Traditional variables, such as market potential, trade integration, and relative unit labour costs, are fairly stable as determinants of equilibrium FDI stocks in transition economies. Institutional development in all its forms is a robust determinant of the optimal level of FDI. The relationship between FDI and the privatization process is complex. Non-direct privatization schemes negatively affect the speed of adjustment towards the equilibrium, whereas current direct privatization strategies positively affect the equilibrium level of FDI. Privatization history increases equilibrium FDI, independently of the method applied.

A Payment System Failure and Its Consequences For Interrepublican Trade in the Former Soviet Union

The implosion of the Soviet Union coincided with the implosion of trade links between the former republics. We analyse this trade collapse from the point of view of the disintegration of the interrepublican payment system. The objective is to determine whether this payment system failure was indeed a cause of the trade collapse and whether it could have been avoided. First we will analyse how the system for interrepublican payments disintegrated in 1992-1993. We wonder whether this constituted a barrier to interrepublican trade. Then we estimate the loss of trade that was caused by the payment system failure under various scenarios. Expressing this cost in terms of GDP delivers a good approximation of the welfare loss due to the payment system failure. We compare this welfare loss to the historical example of post-WWII Europe. In this historical period, Europe had a disintegrated international payment system, until the problem was fixed by the foundation of the European Payments Union (EPU). At the end of the paper we reconsider the much debated question, whether a Soviet Payments Union (SPU) could have offered any relief. In fact a suchlike institution was conceived and founded but it was never operational. We will describe how the concrete proposal of a SPU looked like and analyse why it failed. In the last section we provide policy conclusions.

The credit squeeze during Russia's early transition: A bank-based view

This paper asks whether Russias protracted inflation stabilization might have caused a credit squeeze and hence might have contributed to the output collapse in the first three years of the Russian transition. Russian monetary policy was not restrictive as a whole. Still, the occurrence of a credit crunch is not excluded, because of the Russian central banks heavy reliance on required reserves to curb the inflationary effects of monetized budget deficits. Due to methodological limitations, we are forced to concentrate on a cross-sectional analysis of bank liquidity in 1994, in order to find possible indications about Russias monetary stance from the point of view of the lending channel. We cannot reject that the huge excess reserves of Russian banks in 1994 were at least partially due to excess liquidity. This suggests that there is no direct relation between the monetary policy of high required reserves and the observed credit crunch. The question of why banks preferred to hold excess liquidity deserves further attention. This question is still relevant, because Russian commercial banks have again accumulated excess reserves in 1999, in the aftermath of the banking crisis, triggered by the August-1998 crisis.

Bank Supervision Russian Style: Evidence of Conflicts Between Micro- and Macro-Prudential Concerns

Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the rule-based enforcement of bank standards. Macro-prudential concerns are also documented: Banks in concentrated bank markets, large banks, money center banks and large deposit banks are less likely to face license withdrawal. Further, the CBR is reluctant to withdraw licenses when there are “too many banks to fail”. Finally, macro-prudential concerns induce regulatory forbearance, revealing conflicts with micro-prudential objectives.