Stricter oversight needed as financial misconduct drives risk-taking in banking
Peer-Reviewed Publication
Updates every hour. Last Updated: 30-Apr-2025 11:08 ET (30-Apr-2025 15:08 GMT/UTC)
Banks facing regulatory sanctions for financial misconduct tend to adopt riskier business practices, according to new research.
A study by Wits University and Harvard confirms that South Africa’s 2013 sodium reduction legislation has successfully lowered blood pressure and improved public health.
Excessive sodium intake increases the risk of cardiovascular disease, which causes 20 million deaths globally each year. South Africa was the first African country to mandate sodium limits in processed foods. Researchers found a 10% drop in sodium intake over seven years, with more people achieving ideal consumption levels. Even small reductions in sodium correlated with lower blood pressure.
The law required sodium cuts in 13 food categories, including bread and processed meats, with reductions of up to 70% by 2016 and further cuts by 2019. Lead researcher Prof. Thomas Gaziano noted that even a slight blood pressure drop could prevent thousands of deaths annually.
Prof. Steve Tollman of Wits Agincourt Unit highlighted that mandatory regulations are more effective than voluntary measures. The study, involving 5,000 adults in rural South Africa, suggests other countries could adopt similar policies to save lives.
The $500,000 grant from the Appalachian Regional Commission wants to improve economic development in the region through sustainable non-timber forest farming practices.
Purpose
We estimate the marginal cost curve of each dealer in each auction, based on structural models of the multiunit discriminatory-price auction.
Design/methodology/approach
Auction theory has ambiguous implications regarding the relative performance of three formats of multiunit auctions: uniform-price, discriminatory-price and Vickrey auctions. We evaluate the performance of these three auction formats using bid-level data of the Federal Reserve’s purchase auctions of agency MBS from June 2014 through November 2014.
Findings
Our results suggest that neither uniform-price nor Vickrey auctions outperform discriminatory-price auctions in terms of the total expenditure. However, Vickrey auctions outperform discriminatory-price auctions in terms of efficiency, with the efficiency gain around 0.74% of the surplus that dealers extract on average.
Originality/value
To the best of our knowledge, this paper provides the first structural analysis of the auctions used by the Federal Reserve in implementing its monetary policies.