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Mike Buckle and John Thompson

potential returns and risks of the investment project for which funds are being lent. The existence of asymmetric information creates problems in the financial system both before a transaction is entered into, in evaluating borrowing proposals, and after, in monitoring and enforcing the loan contract. 2.2.1   Asymmetric information: adverse selection

in The UK financial system (fifth edition)
John Wilson

-building policies aimed at strengthening core competencies. Of course, one might add that the new regime was given an enormous initial fillip through the provision of taxpayers’ funds, combined with the lucky coincidence that for once in its generally unprofitable existence FerrantiPackard generated substantial surpluses that arrived just in time for Derek Alun-Jones to announce his first set of results.35 On the other hand, especially once the NEB had divested itself of its Ferranti shares in 1980 and two years later the government-imposed moratorium on trading in these stocks

in Ferranti: A History
Abstract only
Volume 3 Management, mergers and fraud 1987–1993
Author: John Wilson

The final volume of this detailed history of Ferranti covers the last seven years of its operating existence, starting with the 1987 merger with ISC and culminating in a humiliating demise consequent upon GEC’s 1993 decision to withdraw its bid for what by then was an unprofitable rump. Extensive attention is paid to the way in which ISC evolved under James Guerin’s stewardship, providing insights into the shady world of international covert arms dealing. While in 1987 Ferranti purchased what was regarded as a highly profitable defence electronics business, by 1989 it was apparent that ISC’s net worth was marginal, creating an accounting hole in what by then was Ferranti International from which it never recovered, in spite of highly imaginative strategies enacted by a new chief executive, Eugene Anderson. The book provides detailed insights into international mergers, corporate governance issues and defence electronics that highlight the dangers associated with competing in one of the fastest-moving industries of that era.

Open Access (free)
Oonagh McDonald

has covered the leading theories of the markets. They are abstract theories; indeed, more so than they should be, since they lack a sound empirical base. The dominant theory of the Efficient Market Hypothesis distracted regulators, market participants and central bankers from paying attention to market prices as signals or from recognizing the existence of bubbles in the housing market, as Alan Greenspan admitted. The decline in house prices should have been a signal, and was indeed a real indicator of deeper troubles in the market. Instead of regarding the market

in Lehman Brothers
Mike Buckle and John Thompson

out, is termed ‘uncovered interest rate parity’. The efficient markets hypothesis implies that the returns in the two centres should be equal, so that both types of IRP should exist in the foreign exchange market. The evidence for the existence of this type of efficiency will also be examined in section 10.6 . 10.3.3   The international Fisher relation

in The UK financial system (fifth edition)
Mike Buckle and John Thompson

in existence are discussed in the next section. The ability to finance investment through borrowing undoubtedly encourages economic development and the existence of financial claims also stimulates household saving. The investment and saving flows in our simple economy are represented by the outer loop of figure 1.1 . The non-spending of income (or saving) by households

in The UK financial system (fifth edition)
Open Access (free)
Stan Metcalfe and Alan Warde

made considerable advances by reducing market relations to the mutual interaction of demand and supply correspondences to represent the two sides of any transaction; but what lies behind demand and supply, as theoretical constructs, cannot be reduced to questions of the independent behaviour of autonomous individuals. Yet almost all approaches to economic behaviour presuppose the existence and primacy of independent individual agents (mostly persons and firms) who engage in purposive action in the light of their resources, knowledge and interests. Those are, as it

in Market relations and the competitive process
Mike Buckle and John Thompson

unlikely to be sufficient to account for the general preponderance of upward-sloping yield curves. It is likely that some other factor has also been at work. The second source of criticism is that the degree of forecasting ability credited to market operators is, to say the least, excessive. Is it really credible to assume the existence of agents able to forecast future movements of

in The UK financial system (fifth edition)
Mike Buckle and John Thompson

9.1   Introduction The sterling money market located in London is a wholesale market for short-term funds and consequently provides facilities for economic units to adjust their cash position quickly. The rationale for its existence is that receipts of and payments in cash are not generally synchronised. Quite large cash balances are needed if

in The UK financial system (fifth edition)
Problems of polysemy and idealism
Andrew Sayer

nothing themselves. The illusion that they can is further present in the assertion that firms can either make things or get them from the market (the ‘make or buy’ decision). While this is true, in fact the existence of a market for inputs is, of course, dependent on the existence of other producers making those inputs. Markets are not an alternative to production or to firms or ‘hierarachies’ but a mode of co-ordination of the division of labour. Enterprises or hierarchies are usually involved not only in co-ordination but in production; they are therefore not merely

in Market relations and the competitive process