The Swiss authorities plan to reduce the currently excessively high taxes on bioethanol. We argue that a fair tax treatment of ecological fuels could lead to a rapid development in their use in the next few years. For this to be the case, Switzerland would however have to open up its market to...

This paper critically examines the proposed new constitutional article for the Swiss National Bank. The following points are emphasised : a) The SNB distributes only a very small fraction of its profits (as compared to other national banks). b) The SNB holds an exceptionally important and...

This paper examines the effects the planned merger between UBS and SBC would have on competition in the Swiss banking market. It is shown that the merger would lead to a dangerous level of concentration in certain submarkets such as the (economically important) market for credits to small and...

This paper integrates the problem of designing corporate bankruptcy rules into a theory of optimal debt structure. We show that, in an incomplete-contracts framework with imperfect renegotiation, having multiple creditors increases a firm's debt capacity while increasing its incentives to...

The proposed new law for the Swiss National Bank attempts to establish the SNB as an entity, which is practically uncontrolled by the democratic institutions of our country. The proposal has to be fundamentally remodelled, taking into account the following principles: The more independence the...

Legislation affects corporate governance and the return to human and financial capital. We allow the preference of a political majority to determine both the governance structure and the extent of labor rents. In a society where median voters have relatively more at stake in the form of human...

This paper studies the state building insurance monopoly in Spain, the Consorcio the Compensacion de Seguros. It is shown that, just like its Swiss counterparts, the Consorcio operates with exceptionally low transactions costs. Furthermore it allows the supply of a very low cost insurance cover...

We argue that there is a natural trade-off between the independence and the accountability of a central bank. Economist's emphasis on the independence aspect has contributed to creating situations, where the central banks' accountability is largely deficient. Attempts to resolve this issue by...

By limiting the scope for substitution between commodities, other things equal quantity constraints raise the cost of living. Thus, rationed families have higher povery lines than unconstrained ones. This heterogeneity in both resources and poverty lines means that, in principle, bivariate...

In a previous paper we have shown that the UBS-SBC merger would lead to an excessive concentration in the credit market for small and medium companies. The UBS has reacted to this paper in a series of letters to the Swiss competition authorities. We critically examine the content of these...