It has been known for many years that security failures are caused at least as often by bad incentives as by bad design. However, the regulatory correction of bad incentives is not easy in practice and it is still lacking. In the meantime, system dynamics models of security systems can improve the situation by increasing the awareness that misaligned incentives can backfire as long-term consequ...

We develop a model of neural networks to study the bankruptcy of U.S. banks, taking into account the specific features of the recent financial crisis. We combine multilayer perceptrons and self-organizing maps to provide a tool that displays the probability of distress up to three years before bankruptcy occurs. Based on data from the Federal Deposit Insurance Corporation between 2002 and 2012,...

In theory, information from the prices of bank claims could be used as a complement to off-site surveillance in bank supervision. Unfortunately, the vast majority of banks do not issue claims that are actively traded in secondary markets. These banks do rely heavily on one type of claim that is sensitive, at least to some degree, to bank risk: jumbo CDs. Indeed, the Federal Deposit Insurance Co...

Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded offi cial Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Ban...

The online banking systems offered by the Lloyds Banking Group (including Bank of Scotland & Halifax) and the Royal Bank of Scotland Group (including Natwest, Royal Bank of Scotland & Ulster bank) are vulnerable to a remote attack which allows an adversary to commit financial fraud. The vulnerability has arisen as a result of poor software engineering practice which neglected security in favour...

Multiple model adaptive estimation (MMAE) is used to detect and identify sensor failures in a mobile robot. Each estimator is a Kalman lter with a speciic embedded failure model. The lter bank also contains one lter which has the nominal model embedded within it. The lter residuals are postprocessed to produce a probabilistic interpretation of the operation of the system. The output of the syst...

The expectation of a random variable is its average value, where each value is weighted according to the probability that it comes up. The expectation is also called the expected value or the mean of the random variable. For example, suppose we select a student uniformly at random from the class, and let R be the student’s quiz score. Then E [R] is just the class average —the first thing everyo...

Toppling is a common deformation and failure phenomenon in the reservoir bank slopes of hydropower projects. This paper studies genesis evolution different toppling bodies during water impoundment at Miaowei Hydropower Station Reservoir on Lancang River southwest China. properties were determined second characteristics analyzed stages. Different degrees primarily affected by transverse bending ...