Europe, public debts, and safe assets: the scope for a European Debt Agency

The Covid-19 crisis has radically changed the game for world and EU-economies, and urged for a reappraisal of the guidelines for a healthy management of public expenditure. This requires a deep rethinking of the role of public debt in modern capitalistic economies and of efficient, equitable and politically viable ways of financing it. This paper outlines the main operating framework of a Debt Agency tasked with the management of the Eurozone sovereign debts and the creation of a truly European safe asset. The framework leverages on the potential irredeemable nature of sovereign debts in order to build a common bond. By structurally filtering liquidity risk, the Debt Agency can price the Member States’ funding costs by referring only to their credit risk, as defined by EU agreed rules. The common bond issued by the Debt Agency thus avoids mutualisation by design; hence, it can be directly bought by the ECB. Due to its structural intertemporal sustainability, the Debt Agency’s framework delineated in this paper can serve as a benchmark for institutional and political decisions. In this perspective, a counterfactual exercise has been conducted in order to evaluate the future potential impact of the Debt Agency as well as the past distortions in market pricing of Member States’ fundamental risk due to market mispricing of the liquidity risk.

Our metaphorical minds

Aside from metaphor being an important language device reflecting human cognition, it also provides a window into the understanding of culture (Kövecsec 2019). Language is a function of culture because it is a form of the verbal and nonverbal systems by which a group member can communicate with another member. Language bonds together people of the same cultural identity because it functions as a common bond between people who have the same linguistic heritage. As argued in Verhagen (2008), values of one’s understanding of the world he lives in may in turn be influenced by the conceptual metaphors he unconsciously holds to visualize his world. Verhagen has provided a valuable standpoint, yet it is western-centered and European-oriented. By investigating different Chinese metaphors in proverbs, food, marriage, and time expressions, this paper intends to address the following questions: Does conceptualization via metaphors reflect any specific Chinese mode of thinking? Does such conceptualization give a taste of Chinese culture? What kind(s) of theoretical and pragmatic implications can be derived from our line of investigation? It is thus hoped that this paper may provide empirical evidence with reference to mappings between thought and language, which in turn, may serve as a way to explore culture.

Income structure, diversification strategy and owners’ benefit in cooperative financial institutions

PurposeThe purposes of this paper are twofold. First, it analyses the income structure in cooperative financial institutions and examines how traditional and non-traditional incomes are related. Second, it evaluates whether increasing diversification towards non-traditional incomes facilitates or hampers the benefits of financial cooperative owners.Design/methodology/approachData are collected from over 3,100 US credit unions over the period of 1994–2016. A number of modern econometric techniques are employed throughout the analysis, including the use of panel fixed effect, generalised method of moments (GMM) and two-stage least square (2SLS) methodologies.FindingsUsing US credit unions as the empirical setting, the empirical results reveal that the expansion of traditional income leads to a corresponding increase in income from non-traditional activities. However, an increasing reliance on non-traditional income causes a significant drop in interest margins. The authors also find that the extent to which income diversification affects owner benefit varies across credit union types and period of time. While income diversification negatively affects owners' benefits in single common bond credit unions, it has no significant influence on multiple common bond and community credit union owners' benefits. Third, diversification can be beneficial during crisis time, but can be detrimental to owner benefit during normal time.Originality/valueThis paper provides some of the first empirical investigations on the diversification strategy of cooperative financial institutions. Therefore, the results offer significant policy implications for policymakers and market participants on whether financial cooperatives should diversify or specialise.

Driving individuals’ citizenship behaviors in virtual communities through attachment

Purpose The purpose of this paper is to examine the complex relationships between common bond attachment, common identity attachment, self-esteem and virtual community citizenship behavior (VCCB). This study identifies two broad categories of VCCB: citizenship behaviors directed toward benefitting other individuals (VCCBI) and citizenship behaviors directed toward benefitting the virtual community (VCCBC). Design/methodology/approach The authors apply partial least squares structural equation modeling to test the hypotheses, using a sample of 388 valid responses. Findings The results indicate that common bond attachment and common identity attachment have a significant effect on self-esteem, which, in turn, has a significant effect on VCCBI and VCCBC. The results also indicate that common bond attachment has a significant effect on VCCBI, and that common identity attachment has a significant effect on VCCBC. Originality/value This study contributes to a better understanding of VCCBs through common identity and common-bond theory, social identity theory and the stimulus-organism-response framework.

Discrimination, Old and New

Chapter 1 examines the stories and cases of three women, each of whom was unsuccessful in her attempt to use civil rights laws to redress an individual wrong. The transition from old to new discrimination is a story about identity. Despite their different jobs and distinct life experiences, the women in Chapter 1 share a common bond. They are outsiders. Discrimination evolves. While it used to be aimed at discrete outsider groups, discrimination is increasingly about the individual. And existing civil rights law is not equipped to deal with this shift. We need a new language to explain modern discrimination. Religious discrimination law holds the key.