Long before the recent subprime crisis became a global crisis, regulatory authorities, under the influence of the Basel Committee for Banking supervision, spent much effort on designing, harmonizing and implementing quantitative rules for prudential capital adequacy, but spent little effort on doing the same for liquidity. The crisis has changed this and has revived interest in liquidity regulations as a complement to solvency regulations (Rochet 2008), especially since high-capitalized banks may also suffer from funding liquidity strains in times of market turmoil. In a recent paper, the Basel Committee for Banking Supervision has outlined principles for sound liquidity risk management and supervision (Basel Committee 2008a). While in some countries, such as Italy and Spain, the liquidity regulations contain only qualitative requirements, in other countries, such as the United Kingdom and Germany, regulations specifying qualitative as well as quantitative requirements were installed several years ago (Algorithmics 2007).
Qualitative requirements, which are often based on the recommendation of the Basel Committee (2000), focus, inter alia, on the need for adequate information systems, required processes to assess future cash-flows, net funding requirements, and setting of internal limits (Basel Committee 2008b). Quantitative requirements, which specify liquidity relevant positions in simple rules, may be based on a stock approach that requires target holdings of liquid assets that can be drawn down, when needed and/or a cash-flow mapping approach that forces banks to match their cash in- and outflows. Both qualitative and quantitative requirements aim at limiting banks’ exposure to funding risk (i.e., the risk that the counterparties who supplied short-term funding will not roll over that funding and force banks to use other funding sources), and market liquidity risk (i.e., the risk that disruptions in securities markets may turn formerly liquid assets into illiquid assets). Such quantitative requirements are usually designed for normal market conditions, not for times of market turmoil when liquidity in the interbank or securities markets vanishes.
To explore the possibility that a Palaeolithic diet, i.e. one that orresponds to what was available in any of the ecological niches of pre-agricultural humans (1.5 million–10,000 years BP), is optimal in the prevention of age-related degenerative disease. Design: Literature review. Materials and Methods: Between 1985 and December 2002, more than 200 scientific journals in medicine, nutrition, biology and anthropology were systematically screened for relevant papers.
Computer-based searches and studies of reference lists in journals and books provided a vast number of additional papers. Results: Increasing evidence suggests that a Palaeolithic diet based on lean meat, fish, vegetables and fruit may be effective in the prevention and treatment of common Western diseases. Avoiding dairy products, margarine, oils, refined sugar and cereals, which provide 70% or more of the dietary intake in northern European populations, may be advisable.
In this paper, we use firm-level data to quantify the intensive and extensive margin effects of real exchange rate fluctuations on Canadian retailers. We expect an exchange rate movement to have demand-side effects on retailers through its impact on cross-border shopping by Canadian and American consumers and to have supply-side effects through its impact on the price of imported goods that Canadian retailers purchase for resale. Our primary focus is on the demand-side effects and we find significant responses in Canadian retail to real exchange rate movements along the intensive margin.
