Given the recent wave of consolidation in the European banking system (see Figure 1 reporting recent data on the incresing importance of M&A) there is an increasing concern on the impact of bank concentration on the stability of the overal banking system. There are contrasting views about the impact of banking concentration on financial stability. Under the “competition-fragility” view, some authors (see Allen and Gale, 2004, among the others) argue that bank concentration, by keeping safe profit margins for banks, does not give the incentive to bank to finance risky projects.
On the other hand, the “competition-stability” view (Boyd and De Nicolo’, 2005 among the others) argues against bank concentration, given that, the sizeable market power of the only few existing banks will give the incentive of banks to raise the interest rate on loans, and consequently, this will adversely select the firm with risk projects, with a negative impact on the stability of the banking system.
Geometrical and physical intuition, both untutored and cultivated, is ubiquitous in the research, teaching, and development of mathematics. A number of mathematical “monsters”, or pathological objects, have been produced which?according to some mathematicians?seriously challenge the reliability of intuition. We examine several famous geometrical, topological and set-theoretical examples of such monsters in order to see to what extent, if at all, intuition is undermined in its everyday roles.
Negative economic shocks can have long term effects on individuals. Displaced workers face potentially lower future earnings, reduced access to credit, as well as higher mortality rates (Oreopoulos et al. 2006; Schmieder and von Wachter forthcoming; Sullivan and von Wachter 2009). College students who graduate during bad economic conditions are likely to suffer from long term wage losses compared to their luckier peers (Oreopoulos et al 2006; Stevens 2008; Kahn 2010). However, for youth who are facing the decision of graduating from high school, acquiring post secondary education, or entering the labor force, the impact of high unemployment on schooling decisions is theoretically ambiguous, and may be beneficial (Gustman and Steinmeier 1981; Dellas and Koubi 2003; Bedard and Herman 2008). While the opportunity cost of attending school decreases during periods of bad economic conditions, the financial means available to fund education are likely to decline as well.
