Lucia Dallapellegrina

Capitalization Requirements, Efficiency and Governance: A Comparative Experiment on Islamic and Western Banks

The profit and loss sharing principle that is peculiar to Islamic banks reformulates the allocation of risk between shareholders and depositors. In this work we focus on monitoring as a determinant of bank efficiency, under the assumption that equity is a better device than deposits for reducing excessive risk undertaking. Since in Islamic banks depositors are closer to stockholders in terms of residual claiming on profits, the positive relationship between capitalization and efficiency should in principle be weaker in than in their Western counterparts. Results, obtained by means of a stochastic cost frontier analysis on samples of European-15 and Islamic banks during the period 1996-2002, show that the ratio of equity to deposits negatively affects inefficiency in both types of banks, but this effect is considerably undersized in Islamic banks as compared to European ones, thus providing a justification to the reluctance that has accompained the proposal of capital coefficient revision for Islamic banks in accordance to Basel I and II Agreements.

Politicians and Financial Supervision Architectures: Trends and the Italian Case

In recent years we have witnessed a deep change in the design of all the institutions that are responsible for supervising banking and financial markets. The financial supervision scenario is going through a deep evolution on all fronts, and many countries have made important changes in the overall architecture, redefining who is responsible for what. How is the conventional face of supervision changing in all the segments of financial markets? And what are the determinants of one supervisory regime versus another? Our standpoint focuses on the role that politicians can play in reshaping the regime, given that, as a matter of fact, they take the decision to maintain or reform an institutional setting. The paper is organized as follows. In Section Two we describe the actual landscape of the financial supervision architecture in a cross-country perspective. In Section Three we discuss the role that political preferences play in determining the shape of the supervisory setting. The empirical analysis in Section Four allows us to shed light on the factors affecting the choice of supervisory regimes. We discuss the case of Italy in Section Five, while Section Six attempts some preliminary conclusions.

Migration Policy: When an Emergency Rule Becomes the Rule: Evidence from Italy

Anecdotal evidence exists that migrants experience difficulties in complying with Italian immigration rules (i.e. permit of stay applications and renewals) because of an intricate and inconstant legal framework. As a consequence, migrants often need legal assistance in order to regularize their status. In 2011, in order to manage the exceptional flows of refugees escaping from countries involved in the Arab Spring and the Libyan civil war, the Italian Government released the North Africa Emergency Provisions (ENA) which temporarily relaxed immigration policies for some categories of migrants. By using data from an important charity in Milan (Casa della Carita) which provides legal assistance to migrants we perform diff-in-diffs estimations in order to investigate the impact of this emergency rule on the probability of legal status regularization. Results show that the emergency situation actually increased the number of successful applications in favor of immigrants who were entitled to the ENA provisions, while dramatically boosting the denial rate for all the other immigrants. This suggests that some migrants (those not benefiting from the ENA) suffered a sort of displacement due to the enactment of the emergency rules.

Posted Workers: Complements or Substitutes for Local Employment? Empirical Evidence from the EU

This paper investigates the effects of the intra-European posting of workers on domestic labour markets in the years 2007-2009. Instrumental variables related to migrant labour and neighbouring countries’ populations are used to address the endogeneity between posting and labour market features. Contrary to conventional wisdom, we find that an intensification of posting inflows is not likely to displace domestic workers. Instead, an increase in posting from abroad may rise both domestic labour costs and productivity. Results point toward the complementarity between domestic and posted workers, so that posting can actually improve labour efficiency and put upward pressure on labour costs.