The most dramatic reduction in spending growth from 1999 to 2002 is an effect of the Balanced Budget Act of 1997 (BBA).The BBA is expected to make a significant downpayment on Medicare’s future by achieving $116 billion in savings from 1998 to 2002 and $394 billion over the 10-year period from 1998 to 2007. It also extended the projected insolvency of the Medicare Hospital Insurance Trust Fund ...

This contribution aims to compare legislation adjusting the course of insolvency proceedings in France, Germany and Slovakia. On the basis of an investigation of the legislative adjustment of this problem, an attempt is made to ascertain in the given countries the extent to which the outcome of the entire proceedings is influenced by legislation and to determine the fundamental moments that inf...

Turmoil in financial markets is often accompanied by a significant decrease in market liquidity. Here, we investigate how such key risk measures as likelihood of insolvency, value at risk, and expected tail loss respond to bid– ask spreads that are likely to widen just when positions must be liquidated to maintain capital ratios. Our results show that this sort of illiquidity causes significant...

We analyze the impact of capital adequacy regulation on bank insolvency and aggregate investment. We develop a model of the banking system that is characterized by the interaction of many heterogeneous banks with the real sector, interbank credit relations as a consequence of bank liquidity management and an insolvency mechanism. This allows us to study the impact of capital adequacy regulation...

Classification problems with uneven class distributions present several difficulties during the training as well as during the evaluation process of classifiers. A classification problem with such characteristics has resulted from a data-mining project where the objective was to predict customer insolvency. Using the dataset from the customer insolvency problem we study several alternative meth...

Insolvencies of life insurers in Europe have been virtually nonexistent. The deregulation of European markets, however, is likely to dramatically alter that situation. The goal of this study is two-fold: first, to identify significant variables in the early detection of financially distressed life insurers; and second, to consider the importance of these variables to the evaluation of life insu...

This note defines the premium of a put option on the firm as a measure of insolvency risk. The put premium is not a coherent risk measure as defined by Artzner et al. (1999). It satisfies all the axioms for a coherent risk measure except one, the translation invariance axiom. However, it satisfies a weakened version of the translation invariance axiom that we label translation monotonicity. The...

This paper examines the effects of managerial overconfidence on bank risk taking and investigates whether improvements in governance can help to mitigate the adverse effects of managerial overconfidence on bank risk taking by using ordinary least squares method. The sample consists of the financial institutions in G20 and Taiwan over the period of 2005-2012. The executive overconfidence is meas...

Ireland’s policy approach to personal insolvency went through sudden changes in 2012 after a lengthy period of stability. This article presents the findings study examining one remedies introduced with Personal Insolvency Act (as amended), Debt Relief Notice (DRN). The examined DRN’s effectiveness addressing financial well-being over-indebted individuals. results revealed reduction participants...