Capital Flow Surges and Consequences

This chapter examines whether the source or the type of inflow of the capital inflow to emerging economies makes any difference to the consequences of the capital flow. Our results, based on a sample of 53 emerging markets over 1980–2013, show that when it comes to the source of the inflow, the macroeconomic and financial-stability consequences of flows driven by residents (asset flows) and nonresidents (liability flows) are broadly similar in economic terms. Formal statistical tests, however, suggest that liability flows are more prone to causing economic overheating and domestic credit expansion than asset flows. On the types of inflows, we find that compared to direct investment, portfolio debt and other investment flows are associated with larger macroeconomic imbalances and financial vulnerabilities. We conclude that policy should try to mitigate the untoward consequences of inflows, and shift their composition from risky to safer forms of liabilities.

Passive Sustainable Funds: The Global Landscape

In this article, we provide an overview of the global landscape of index-tracking sustainable funds, looking at trends in asset growth, asset flows, and product development. We focus on the two regions where these funds have seen the greatest adoption, Europe and the United States. We also examine the broad range of approaches that aim to address various sustainability and investment objectives.

Openness and Financial Development in Central and Eastern European Countries

Great numbers of countries have made the limitations loose on the transnational goods, services and capital flows and begun to follow a policy of export-oriented growth. Total value of global financial asset flows exceeded the value of global trade over time and financial markets have experienced considerable expansions in almost every country. This paper investigates the interaction between openness and financial development in 9 Central and Eastern European countries during 1996-2014 period employing cointegration test of Westerlund and Edgerton (2007) and causality test of Dumitrescu and Hurlin (2012). We reached that openness affected financial sector development positively in the long term. Furthermore, there was one-way causality from financial openness to financial sector development.

Unveiling the Black Markets of Pooled Assets

Presence of black markets is not common for every industry but is a unique phenomenon in the industries such as asset pooling and leasing services. The unique business models and the asset flows that we see in such industries are susceptible for such threats and reveals the nature and extent of extent of industry-specific threats. This paper employs agility lens (Overby et al. 2006; Roberts and Grover 2012) to understand how such firms could address the issue of black market threats with the help of network structure. Through a case study of a global asset pooling and leasing company, we reveal the criticality of network structures, the difficulties, inadequacies and impracticalities of current tracking technologies that challenge firms in minimizing such threats.

Eliciting Security Requirements for an Information System using Asset Flows and Processor Deployment

The authors cannot comprehensively determine all of the vulnerabilities to an attack only from requirements descriptions. To resolve the problem, the authors propose a method for eliciting security requirements using the information about system architecture. The authors convert a use-case description into a variation of a data flow diagram called an asset-flow diagram (AFD). The authors then refine the AFDs based on a processor deployment diagram (PDD), which gives information about a system architecture. By using vulnerabilities patterns to an attack, the authors distinguish vulnerabilities to the attack that can be identifiable in AFDs from remaining vulnerabilities to the attack. To prohibit the former vulnerabilities, security requirements are defined as countermeasures and/or modification of existing requirements. To prevent the latter vulnerabilities, security requirements are defined as design and implementation constraints. Through an evaluation of a web application, the authors show that our method enables us to elicit security requirements against several different attacks in different system architectures.