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PALGRAVE MACMILLAN STUDIES IN
BANKING AND FINANCIAL INSTITUTIONS
SERIES EDITOR: PHILIP MOLYNEUX

Banking and Beyond

The Evolution of Financing along

Traditional and Alternative Avenues

Edited by
Caterina Cruciani
Gloria Gardenal
Elisa Cavezzali
Palgrave Macmillan Studies in Banking
and Financial Institutions

Series Editor
Philip Molyneux
University of Sharjah
Sharjah, United Arab Emirates
The Palgrave Macmillan Studies in Banking and Financial Institutions
series is international in orientation and includes studies of banking sys-
tems in particular countries or regions as well as contemporary themes
such as Islamic Banking, Financial Exclusion, Mergers and Acquisitions,
Risk Management, and IT in Banking. The books focus on research and
practice and include up to date and innovative studies that cover issues
which impact banking systems globally.

More information about this series at

http://www.palgrave.com/gp/series/14678
 Caterina Cruciani • Gloria Gardenal
Elisa Cavezzali
Editors

Banking and Beyond

The Evolution of Financing along Traditional
and Alternative Avenues
Editors
Caterina Cruciani Gloria Gardenal
Department of Management Department of Management
Ca’ Foscari University of Venice Ca’ Foscari University of Venice
Venice, Italy Venice, Italy

Elisa Cavezzali
Department of Management
Ca’ Foscari University of Venice
Venice, Italy

ISSN 2523-336X     ISSN 2523-3378 (electronic)

Palgrave Macmillan Studies in Banking and Financial Institutions
ISBN 978-3-030-45751-8    ISBN 978-3-030-45752-5 (eBook)
https://doi.org/10.1007/978-3-030-45752-5

© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Switzerland AG 2020
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
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institutional affiliations.

This Palgrave Macmillan imprint is published by the registered company Springer Nature
Switzerland AG.
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
 Contents

1 Introduction by the Editors  1

Caterina Cruciani, Gloria Gardenal, and Elisa Cavezzali

Part I Financial Institutions and the Evolution of European

Market and Policy Framework   7

2 ECB and FED Governors’ Speeches: A Topic Modeling

Analysis (2007–2019)  9
Marika Carboni, Vincenzo Farina, and Daniele A. Previati

3 Analyzing Policy Options in the Resolution of

Systemically Important Banks: Comparing the “Bailout”
and “Bail-In” Tool in Selected Case Studies 27
Ewa Miklaszewska and Jan Pys

4 Recent Innovation in the Regulation of Covered Bonds in

Europe: Who Will Benefit from the New Legislative
Framework? 49
Giusy Chesini and Elisa Giaretta

5 Subordinated Debt and Banking Regulation: An Overview 75

Giulio Velliscig, Josanco Floreani, and Maurizio Polato

v
vi Contents

6 The Impact of Monetary Policy on Bank Profitability105

Paula Cruz-García

Part II Frontiers in Financing: Instruments for Firms and

Individuals 137

7 The Value Drivers of the Italian Asset Management

Industry: An Inquiry on the Systematic Risk Drivers139
Andrea Ferrarin, Josanco Floreani, and Maurizio Polato

8 Signaling Success Factors in Alternative Entrepreneurial

Finance169
Francesca Battaglia, Francesco Busato, and Maria Manganiello

9 Business Models in the Lending-Based Crowdfunding

Industry191
Stefano Cosma, Francesco Pattarin, and Daniela Pennetta

10 The Italian Minibonds Experience in Triveneto215

Nicola Carta and Caterina Cruciani

11 Start-Ups Beyond the Crisis: A Survival Analysis237

Giulia Baschieri, Giorgio S. Bertinetti, and Gloria Gardenal

Index257
 Notes on Contributors

Giulia Baschieri is Senior Assistant Professor of Corporate Finance at the

Department of Management—Alma Mater Studiorum University of
Bologna, Italy, where she teaches Corporate Finance. She has a Master in
Science in Finance, Intermediary and Markets, and a PhD in Markets and
Financial Intermediaries with a thesis on the local home bias in the Italian
context. Her research interests refer to asset-pricing dynamics tied to cor-
porate geographic location, and corporate evaluation.
Francesca Battaglia is Associate Professor of Banking and Finance at the
University of Naples “Parthenope”, Department of Management Studies
and Quantitative Methods, where she teaches Risk Management in
Banking and Financial Markets and Institutions. She also serves as a
member of the teaching board of the Doctorate “Governance,
Management and Economics”. Her research focuses on risk manage-
ment, securitization, corporate governance, systemic risk of financial
intermediaries and crowdfunding.
Giorgio S. Bertinetti is Full Professor of Corporate Finance and past
director at the Department of Management of Ca’ Foscari University of
Venice, Italy. His research focuses on enterprise risk management, sustain-
ability and corporate performance measures. Recently, he started to
investigate the case of the real estate industry.
Francesco Busato is Full Professor of Economics at the University of
Naples “Parthenope”. He received his BA from University of Rome La
Sapienza (summa cum laude), MA from Bocconi University, and PhD

vii
viii NOTES ON CONTRIBUTORS

in Economics from Columbia University, NY. He served as an assis-

tant professor at the University of Aaarhus Denmark, University of
Rome III, as an associate professor and next Full Professor at the
University of Naples “Parthenope”. He is the head of PhD Program
of Economics, Statistics and Sustainability. He teaches classes topics
in finance, economics, at bachelor, master and PhD level. He pub-
lished on peer reviewed international journals in finance, economics
(dynamic models) and sustainability.
Marika Carboni is a researcher at the University of Rome III, Italy.
Before completing her PhD at the University of Rome “Tor Vergata”,
Italy, she was a visiting research scholar at Olin Business School, Washington
University in St. Louis. Her research has been published in various
journals, including Journal of Banking and Finance.
Nicola Carta received his Master Degree in Economics and Finance in
March 2019 from the Ca’ Foscari University of Venice, Italy. Since
September 2019, he is a PhD student with a concentration in Finance
within the Department of Management of the same university. His research
interests broadly concern internal governance, SMEs, entrepreneurial
finance and sustainability.
Elisa Cavezzali is Associate Professor of Economics of Financial
Intermediaries at the Department of Management where she received her
PhD in Business. She achieved a second PhD in Finance from Cass Business
School, London. Her main research interests include the security industry,
asset allocation and portfolio selection, behavioral finance, corporate finan-
cial disclosure, corporate social responsibility and debt restructuring pro-
cesses. Cavezzali’s teaching experience includes financial and banking
instruments, commercial banks’ management and credit analysis, corporate
finance, corporate financial policies, corporate financial disclosure, corporate
and investment banking at Bachelor, Master and MBA levels. She was also an
“expert” for the European Economic and Social Committee (CESE) about
financial markets system and financial derivatives.
Giusy Chesini is Associate Professor of Financial Markets and Institutions
at the University of Verona, Italy. She got her PhD in Financial Markets
and Institutions at the University of Bergamo, Italy. Her research
interests refer to the evolution of financial markets and international
stock exchanges, the bank-company relationship, bank regulation, man-
agement and performance measurement.
 NOTES ON CONTRIBUTORS ix

Stefano Cosma is Full Professor of Financial Markets and Institutions at

the Department of Communication and Economics, University of Modena
and Reggio Emilia, Italy. His research fields are retail banking, consumer
credit, households lending and corporate banking. His current research
interests include FinTech, open banking and banking platforms.
Caterina Cruciani is Assistant Professor of Financial Markets and
Institutions at the Department of Management, Ca’ Foscari University of
Venice, where she also received a PhD in Economics. She is the operating
director of the Center for Experimental Research in Management and
Economics (CERME) and a member of the Risk-Lab at Ca’ Foscari
University of Venice. Cruciani’s research interests focus on behavioral
finance, financial advisory, and SME financing. She teaches financial and
banking instruments, corporate banking and behavioral finance at the
University of Venice and has been involved in professional training activi-
ties for financial advisors.
Paula Cruz-García holds a PhD in Quantitative Finance and Economy
from the University of Valencia. She has been a visiting PhD student at
Essex Business School, University of Essex. Her main research interests are
banking and financial economics and she has written several papers
for specialized journals and book chapters about these topics.
Vincenzo Farina is Associate Professor of Financial Markets and
Institutions in the Department of Management and Law at the University
of Rome Tor Vergata and Adjunct Professor of Financial Management and
Financial Markets in the Department of Finance at Bocconi University.
He is member of scientific board of PhD in “Economia Aziendale”,
University of Rome Tor Vergata.
Andrea Ferrarin is a PhD candidate in Managerial and Actuarial Sciences at
the Department of Economic and Statistics of the University of Udine, Italy.
His research focuses on the identification of the value drivers of the Italian
asset management industry, focusing on the systematic risk determinants.
Josanco Floreani is Associate Professor of Corporate Finance at the
Department of Economic and Statistics of the University of Udine, Italy.
His research focuses mainly on securities and exchange industry structure,
performance measurement and value creation in the exchange industry,
credit quality and banks’ systematic risk, and SME’s capital structure.
x NOTES ON CONTRIBUTORS

Gloria Gardenal is Assistant Professor of Corporate Finance and a

member of the Risk-Lab and the Center for Experimental Research in
Management and Economics (CERME) at Ca’ Foscari University of
Venice, where she also received a PhD in Business. Her research focuses
on corporate finance, risk management and investment decisions, with a
particular interest in behavioral finance. She taught several Bachelor and
Master courses including corporate finance, valuation, financial policies
and investment strategies and also has been involved in more advanced
courses like MBAs in Finance and International Finance.
Elisa Giaretta is Adjunct Professor of Corporate Finance and Research
Fellow at the Department of Economics of the University of Verona, Italy.
Her research focuses on FinTech innovation and bank digitalization pro-
cesses, financing firms’ networks, firms’ longevity and vitality, and firms’
dividend policies.
Maria Manganiello received her BSc in “Business Economics” and her
MSc in “Economic and Financial Sciences” from the University of Naples
“Parthenope” cum laude, respectively. She was awarded at the Chamber of
Deputies in Rome as a young merit graduate for the attainment of the first
level degree, by obtaining a Master’s degree in “Global Marketing,
Communication & Made in Italy” at the Italy-USA Foundation, with the
adhesion of the Minister of Education, University and Research. She also
completed the “Advanced Risk and Portfolio Management Marathon,” a
master-level program at the University of Rome “Tor Vergata”. She is cur-
rently a third-year PhD student in the International Program in “Economics,
Statistics, and Sustainability” at the Department of Economic and Legal
Studies of the University of Naples “Parthenope.” Her professional inter-
ests include financial economics, quantitative risk management, FinTech,
quantitative portfolio management, systemic risk, and real estate.
Ewa Miklaszewska is Professor of Banking and Finance at Cracow
University of Economics, where she chairs the Division of Banking and
Global Financial System.
Francesco Pattarin is Assistant Professor of Financial Markets and
Institutions at the Department of Economics “Marco Biagi”, University
of Modena and Reggio Emilia, Italy. His research is mainly focused on the
mini-bond market, the spending policies of banking foundations, and the
psychological determinants of household debt decisions.
 Notes on Contributors  xi

Daniela Pennetta is a PhD student in Labour, Development, and

Innovation at the “Marco Biagi” Foundation, University of Modena and
Reggio Emilia. She is a member of ADEIMF (Italian Association of
University Teachers of Financial Intermediaries and Markets). Her research
topics include crowdlending, FinTech and digital transformation in finan-
cial intermediation.
Maurizio Polato is Full Professor of Financial Markets and Institutions
at the Department of Economic and Statistics of the University of Udine,
Italy. He holds a PhD in Business from Ca’ Foscari University of
Venice, Italy. His main research interests include credit quality, bank
provisioning and systematic risk in banking business, Islamic versus
traditional stock exchanges, financial products and credit lending
to SMEs.
Daniele A. Previati is Full Professor of Financial Markets and Institutions
at the University of Rome III and Fellow of the SDA Bocconi School of
Management, Milan, Italy. He is currently President of ADEIMF, the
Italian Association of Scholars in Banking and Finance. His current research
interests include FinTech, crowdfunding, alternative finance, banking and
central banking communication, sustainability and risk management in
financial markets and institutions. With specific reference to the banking
sector, he studies stakeholder engagement, HR and intellectual capital
management, and operational and reputational risks.
Jan Pys is a PhD student at Cracow University of Economics, having
over ten years of practical experience in the banking sector, currently as a
head of management accounting for Retail and Consolidation at ING
Germany in Frankfurt.
Giulio Velliscig is a PhD student at the Department of Economic and
Statistical Sciences of the University of Udine, Italy. His research focuses
on bank resolution regulation and explores the impact exerted by the loss-­
absorbing capacity requirements (TLAC, MREL) on banking busi-
ness models.
 List of Figures

Fig. 2.1 ECB topics (relative weights). This figure reports the relative
weights of each topic, for each year of our sample
(2007–2019). Specifically, to compute the relative weight and
therefore build the graph, we divided the number of speeches,
associated to each topic in a specific year, by the total number
of speeches collected for that year 20
Fig. 2.2 FED’s topics (relative weights). This figure reports the relative
weights of each topic, for each year of our sample
(2007–2019). Specifically, to compute the relative weight and
therefore build the graph, we divided the number of speeches,
associated to each topic in a specific year, by the total number
of speeches collected for that year 20
Fig. 4.1 Percentage of outstanding covered bonds by country in
Europe (Source: Own elaboration from ECBC statistics) 54
Fig. 4.2 Trend of outstanding and issuance of covered bonds in the
world and in EMU (European and Monetary Union)
countries, 2018 (in million euros). (Source: Own elaboration
from ECBC statistics) 55
Fig. 4.3 Overview of the covered bond directive 64
Fig. 6.1 Intervention interest rates by the main central banks
(2000–2018). (Source: Bank of England, Bank of Japan,
European Central Bank and U.S. Federal Reserve) 106
Fig. 6.2 Interest rates and slope of the yield curve. (Source: OECD
[2019] database and authors’ calculations) 122

xiii
xiv List of Figures

Fig. 6.3 Interest rates and yield curve by countries. (a) three-month
interbank rates, (b) ten-year government bond rates, (c) slope
of the yield curve. (Source: OECD [2019] database and
authors’ calculations) 123
Fig. 6.4 Economic impact of the Lerner index determinants. Basis
points. (a) net interest margin, (b) ROA. Note: The figure
shows the effect on each of the dependent variables of a
variation in each of the explanatory variables from the value of
the bank located in the percentile 25th to 75th or, what is the
same, the difference in each of the dependent variables
between a bank that is in the 25th percentile of the distribution
and another that is in the 75th percentile of each of the
explanatory variables. The faint colored bars in the figure
correspond to variables with no statistically significant effect.
The variables are ordered from the highest to lowest relevance 129
Fig. 9.1 Silhouette plot of IOSCO classification. Note: the client-
segregated account model has an average silhouette width of
−0.08, the notary model of 0.11 and the guaranteed return
model of −0.01. The overall average silhouette width is 0.006 205
Fig. 9.2 Silhouette plot of the cluster analysis results with direct/
indirect intermediation model. Note: the average silhouette
width for the four clusters is 0.49, 0.59, 0.83 and 0.61
respectively. The average silhouette width for the entire dataset
is 0.6 207
Fig. 10.1 Unlisted and listed minibond new issues by regional location 225
Fig. 10.2 Unlisted and listed minibond new issues by business activity
over time 226
Fig. 10.3 Unlisted and listed minibond new issues by legal form over
time230
Fig. 10.4 Distribution of minibond new issues (unlisted and listed) by
face value 231
Fig. 10.5 Distribution of minibond new issues (unlisted and listed) by
maturity class 231
Fig. 11.1 Survivor function, cohort 2009 249
Fig. 11.2 Empirical hazards, cohort 2009 250
 List of Tables

Table 2.1 10-topic solution, 10 words, ECB Governors’ speeches 16

Table 2.2 10-topic solution, 10 words, FED Governors’ speeches 17
Table 2.3 ECB topic distribution 18
Table 2.4 FED topic distribution 19
Table 3.1 Number of banks with public aid (A) and without aid (B) in
2004–2016, EU-28 31
Table 3.2 The results of public aid for restructured bank (group A) and
for other banks (group B) in the EU-28, 2004–2016, period 32
Table 3.3 Pre-crisis comparison of Deutsche Bank, the ING Group
and RBS  34
Table 3.4 Return for Dutch state on state aid to the ING Group 35
Table 3.5 Aid measures received by RBS 37
Table 3.6 Post-crisis comparison of Deutsche Bank, the ING Group
and RBS 39
Table 3.7 Deutsche Bank, the ING Group and RBS: relative
transformation between 2006 and 2018 40
Table 4.1 Bond type definitions before and after the new directive 65
Table 5.1 A summary of mandatory subordinated debt proposals 79
Table 6.1 Descriptive statistics (averages) 119
Table 6.2 Results from the regressions 125
Table 6.3 Observed changes in interest rates and yield curve slope, and
predicted changes in net interest margin and profitability
(2000–2017). Basis points 131
Table 6.4 Observed changes in interest rates and yield curve slope, and
predicted changes in net interest margin and profitability
(2008–2017 and 2010–2017). Basis points 131
Table 7.1 AuM in Europe by investment funds and discretionary
mandates142

xv
xvi List of Tables

Table 7.2 Descriptive statistics of comparable asset management firms 152

Table 7.3 Descriptive statistics of the sample being studied 153
Table 7.4 Variables included in the study 155
Table 7.5 Descriptive statistics of the variables 157
Table 7.6 Pearson pairwise correlations 158
Table 7.7 Determinants of equity betas—Baseline results 160
Table 7.8 Instrumental Variable (IV) regression with GMM estimator 162
Table 8.1 Italian equity crowdfunding platforms 175
Table 8.2 Variable definitions 175
Table 8.3 Descriptive statistics 176
Table 8.4 Correlation matrix 178
Table 8.5 Difference in means between successful and unsuccessful
campaigns179
Table 8.6 Determinants of the amount raised, number of investors and
success181
Table 8.7 Determinants of the amount raised, number of investors and
success184
Table 9.1 Business models in the LBCF industry defined by IOSCO
(2014)195
Table 9.2 Geographical percentage composition of the sample 199
Table 9.3 Distribution of lenders (rows) and borrowers (columns) for
LBCF companies in the sample (% of total observations) 200
Table 9.4 Descriptive sample statistics of intermediation model variable
(% of total observations) 201
Table 9.5 Descriptive sample statistics of additional risk management
services variable (% of total observations) 202
Table 9.6 Features of companies by IOSCO classification 204
Table 9.7 Fisher’s exact tests of heterogeneity between groups of
LBCF companies sharing similar intermediation model
(IOSCO classification) 205
Table 9.8 Cluster analysis results with direct/indirect intermediation
model: features of LBCF companies in each cluster 206
Table 9.9 Fisher’s exact tests of heterogeneity between groups (cluster
analysis–based classification versus IOSCO classification) 207
Table 10.1 Distribution of minibond new listed issues by fixed coupon rate 226
Table 10.2 Distribution of minibond new unlisted issues by fixed
coupon rate 227
Table 10.3 Criteria for the identification of potential minibond emitters 232
Table 10.4 Number of potential minibond issuers in the Triveneto
region by geographical area, business activity and legal form 233
Table 11.1 Description of two-digit industries in manufacturing 245
Table 11.2 Summary statistics 248
Table 11.3 Duration of new firms 252
 CHAPTER 1

Introduction by the Editors

Caterina Cruciani, Gloria Gardenal, and Elisa Cavezzali

This book presents a selection of original contributions discussed at the

2019 Wolpertinger Conference held in Venice, Italy. The conference rep-
resents the annual meeting of the European Association of University
Teachers in Banking and Finance and aims at fostering discussions on key
topics and areas in the current debate within this field of applied research.
The 2019 edition of the conference centred around the future of credit for
small and medium enterprises (SMEs) and socially sustainable investing,
touching upon the role and the evolution of the banking sector and the
financing tools it fosters, while at the same time addressing the impact of
new regulations and the ensuing opportunities for financial institutions,
firms and individuals.
The book includes two parts. The first part takes on a more marked
macroeconomic approach, addressing the impact of policy changes affect-
ing banks and financial institutions. In particular, it deals with the conse-
quences of recent changes in European policy looking both at how policy
has been and is communicated and to how it shapes new incentives and

C. Cruciani (*) • G. Gardenal • E. Cavezzali

Department of Management, Ca’ Foscari University of Venice, Venice, Italy
e-mail: cruciani@unive.it; ggardenal@unive.it; elisa.cavezzali@unive.it

© The Author(s) 2020 1

C. Cruciani et al. (eds.), Banking and Beyond, Palgrave Macmillan
Studies in Banking and Financial Institutions,
https://doi.org/10.1007/978-3-030-45752-5_1
2 C. CRUCIANI ET AL.

challenges for the banking sector and institutional and individual inves-
tors. This part touches upon the debate on the “bail-in” versus “bail-out”
options and reviews the new opportunities for investors on the covered
and subordinated bond markets in Europe, building upon the new regula-
tory structure provided for by the European authorities. The second part
expands the scope of the analysis and explores the role of some of the new
financing tools besides the traditional banking sector available to firms and
individuals. Specifically, it explores financing options for firms and indi-
viduals and describes, for example, which role alternative capital-market
tools like mini bonds and crowdfunding are playing in the landscape of
SMEs financing, touching upon how financing decisions can affect the
survival of start-ups.
Chapter 2 by Marika Carboni, Vincenzo Farina and Daniele A. Previati
analyses for the first time central banks’ communication strategies, given
the increasing role they have been playing in the last decades. In particular,
they investigate the differences between the topics contained in European
Central Bank (ECB) and Federal Reserve (FED) Governors’ speeches
over the time span 2007–2019. This contribution finds that both ECB
and FED speeches strongly focus on monetary policy issues. However, the
United States give emphasis also to two other important issues—financial
stability and consumer protection—more than what their European coun-
terpart does.
Chapter 3 by Ewa Miklaszewska and Jan Pys focuses on another rele-
vant issue at the macroeconomic level—the effectiveness of the Single
Resolution Mechanism (SRM) and the Bank Recovery and Resolution
Directive (BRRD) in Europe—in limiting the use of public spending for
the stabilization and restructuring of systemically important banks. Public
intervention during the crisis played a fundamental role in stabilizing the
banking sector. However, it also produced negative effects such as changes
in the market structure, incentives to take risks, variations in the cost of
capital and of the competitive conditions. This chapter analyses the imple-
mentation of the resolution mechanism for large banks (bail-ins), devel-
oped in the post-crisis period, and compares it with bank restructuring
programmes based on bail-outs, using the case of two large banks:
Deutsche Bank in Germany and ING Group in the Netherlands. The
empirical analysis shows how tighter regulation can help shift the perspec-
tive towards the longer term and set in motion changes that ultimately
lead to improved profitability and cost efficiency.
 1 INTRODUCTION BY THE EDITORS 3

Chapters 4 and 5 expand the analysis of the impact of policy changes to

the ever-evolving bond market. Chapter 4 by Giusy Chesini and Elisa
Giaretta focuses on the evolution in the regulation of covered bonds, tra-
ditionally left in the hands of Member States. The lack of a harmonized
regulation resulted in several national approaches for what concerns key
technical issues and posed a challenge to the further development of this
financial tool. The European Commission has recently harmonized
national rules in the issuance of these securities by providing common
definitions, characteristics and regulations with the aim of introducing a
European trademark through the “Capital Markets Union Action Plan”.
In March 2018 the European Commission issued a proposal for a Directive
on covered bonds (CBs), laying down the conditions for such bonds to be
recognized under EU law and representing an important step forward to
strengthen capital markets and investments in the EU. This proposal
invigorates investor protection by imposing specific supervisory duties. In
this chapter, the authors intend to explore the new European characteris-
tics of these financial instruments and the possibility for banks and inves-
tors to take advantage of the new regulation.
Chapter 5 shifts the focus on subordinated bonds. The recent academic
literature has started focusing on the evolving role of subordinated debt
within the EU resolution framework. The market monitoring function
employed by its investors and its crucial role in complying with the
Minimum Requirement for Own Funds and Eligible Liabilities (MREL)
subordination requirement makes subordinated debt the more affected
asset class under the BRRD. In this chapter, the authors (Giulio Velliscig,
Josanco Floreani and Maurizio Polato) provide an overview of subordi-
nated debt literature and its evolution within banking regulation with a
focus on the BRRD. The chapter explores the different streams of litera-
ture that ground both theoretically and empirically future research on the
role of subordinated debt within the EU resolution framework.
Chapter 6 provides an empirical test of monetary policy on bank profit-
ability. Paula Cruz-García analyses the effect of monetary policy on the net
interest margin and on bank profitability of a panel from 31 OECD coun-
tries over the period 2000–2017, focusing specifically on the impact of
policy interest rates and the slope of the yield curve. The main results
show that expansionary monetary policy measures adopted in numerous
economies had a negative impact on net interest margins and, therefore,
on bank profitability. The relationship found between interest rates and
4 C. CRUCIANI ET AL.

the slope of the yield curve with both the net interest margin and profit-
ability is non-linear, more specifically concave. This suggests that the nega-
tive impact of low interest rates and the flat yield curve is greater the lower
and flattened they are, respectively. Therefore, a potential normalization
of monetary policy would have highly beneficial effects on restoring mar-
gins and profitability.
Moving to the second part of the book, in Chap. 7 Andrea Ferrarin,
Josanco Floreani and Maurizio Polato investigate the asset management
industry focusing on the Italian market. After the escalation of the global
financial crisis and the consequent turmoil of the whole banking system,
the asset management industry in EU has undergone a significant growth
in the last decade, distinguishing itself as the most vibrant segment within
the financial intermediation field. Using a sample of 44 Italian asset man-
agement firms from 2006 to 2016, this chapter provides an empirical
investigation of the major systematic risk determinants, which have fea-
tured Italian asset managers across the financial crisis. Results show that
operating efficiency represents a crucial factor for the pricing of the sys-
tematic risk exposure of asset managers, having a positive impact on mar-
ket beta.
Chapters 8 and 9 address another very important element for the firm
financing in the fintech era—crowdfunding as financing tool for SMEs. In
particular, Chap. 8, authored by Francesca Battaglia, Francesco Busato
and Maria Manganiello, focuses on the role of signalling in equity crowd-
funding by examining the determinants of funding success in the Italian
context. By using a unique dataset of 192 successful and unsuccessful cam-
paigns launched between 2014 and November 2018 on the leading Italian
equity crowdfunding platforms, they analyse the signalling role played
towards external investors by the disclosure of financial information, by
the share of equity retained by founders and by the size of their social
network. Results show that the disclosure of financial information, the
equity retention retained and the social capital of entrepreneurs have a
positive and significant impact on funding success and can be interpreted
as effective signals by external investors.
Chapter 9 focuses instead on a different issue—the strategies and busi-
ness models adopted by lending-based crowdfunding (LBCF) companies,
a topic currently neglected by the academic literature. The authors,
Stefano Cosma, Francesco Pattarin and Daniela Pennetta, aim at the defi-
nition of a more correct classification of LBCF companies, grounded on
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 This village, like so many others, is divided into two sections, each
of which has its dubu. At these annual festivals only one division
dances, the members of the other being spectators. If, for some
reason, such as the death of an important man, a challenge is not
taken up, there will be no dance the following year, which is a local
misfortune.
A man of the other division stepped forward and picked up the
areca nut; then those on the dubu broke up the bunches of the nuts
and threw them among the spectators for a scramble, and a scene of
hilarious excitement began. I joined in the scramble, and secured
one or two nuts.

Fig. 25. Irupi Dance, Babaka

Shortly after this seven recently tattooed girls walked in a row up

and down the broad open space in the village in front of the dubu.
The irupi or iropi dance was to be performed by them, and the pigs
for the feast had been provided by their relatives. The girls walked in
a somewhat stately manner, and gracefully swung a cord of about
three feet in length, to which a small netted bag was attached; the
other end of the cord was attached to the waist-belt of the petticoat
at the back. They swung it with the right hand, causing it to make a
graceful sweep behind the back round to the left side, where it was
caught by the left hand. During this manœuvre the whole body made
a half turn. The action was then repeated with the left hand, the
tassel being caught with the right hand. Up and down the little
damsels walked, well pleased with themselves, and fully conscious
that they were the centre of attraction; it was an elegant dance, and
really quite charming. During the irupi dance some women sat on the
dubu and beat the drums; this is the first time I have anywhere seen
women beating drums, and it is only on this occasion that women
may mount on a dubu. The movements of the girls were regulated by
the staccato beats of the drums.
The same girls next ascended the dubu and stood in a row facing
the village square. Two men then carried the pig, which was tied on
to a pole, and stood in front of the girls. An old woman came and
stood beside them; she was not ornamented in any way, whereas
the girls wore numerous swagger petticoats; round their necks were
as many necklaces and ornaments as they could muster, and some
had wonderful shell head-dresses. The girls next took off all their
petticoats and were anointed by the old woman, who dabbed each
girl with a mixture of coconut oil and water by means of a bunch of
wild thyme. As soon as the anointing was completed a drum was
beaten, and the girls quickly dressed themselves and jumped down
from the dubu. This ended one of the most interesting ceremonies it
has been my lot to witness.
It is evident that the latter part of the ceremony is the most
important, and that it is a fertility ceremony. I was told that it brought
good luck to the plantations. It is interesting to note that here, as in
India, and indeed in many parts of the world, the ceremony for
ensuring a bountiful harvest is performed by the women.
The next day the pig was killed for the feast, and there was
renewed dancing.
 PLATE XIV

GIRLS OF BABAKA DRESSED FOR THE ANNUAL CEREMONY

GIRLS ON THE DUBU AT BABAKA FOR THE ANNUAL

CEREMONY
 Mr. R. E. Guise, who has resided for over ten years in the Hood
peninsula, has recently described this ceremony in the Journal of the
Anthropological Institute (xxviii., 1899, p. 215). Apparently the
second and principal part of the ceremony (kuiriga) was somewhat
abbreviated on the occasion when we witnessed it. As soon as the
girls on the dubu have thrown their petticoats behind them, married
women advance and place in front of each girl a basket containing a
quantity of areca nuts, on the top of which are a few yams and a
small knife. After the anointing, each girl takes a yam in her left hand
and the knife in her right, and at each beat of the drum cuts off a
piece of the yam, bends her knees, and slightly bows her head,
causing the weighted head-dress to sway forwards. The whole effect
is described as being wonderfully pretty. After each girl has cut up
half a dozen yams the female orchestra give two sharp taps, and the
drums cease beating. The girls immediately take up the baskets and
pelt the crowd with the areca nuts; this part of the affair is much
appreciated by the onlookers, who scramble for the nuts, tumbling
over one another like children.
The girls quite enjoy the position, and do not show any shame.
Very few, if any, men seem to care to look on the ceremony, old
women, widows, and married women who have daughters
constituting the majority of the bystanders.
I had previously known about this ceremony and understood that it
was of an indecent character, but my experience quite corroborates
these statements of Mr. Guise. I must confess to feeling surprised
that the men took no notice at all of the girls, and it was perfectly
evident that this was regarded by them as solely a woman’s
ceremony.
One day we started in the early morning to visit Keapara
(Kerepunu). Mr. A. C. English, the Government Agent for the Rigo
District, had followed us to Bulaa, and he took us in his whale-boat.
After rowing for a long time in a heavy sea against a head wind Mr.
English found that the wind and tide were too strong for us to cross
Hood Bay; so the sail was set, and we ran down the bay to Kalo. To
windward of the mouth of the Vanigela is a sand-bar, which deepens
as it projects into the bay, and over this the breakers came rolling in
with any amount of surf and flying spray. We had a few anxious
moments as the boat was carried along through the seething water,
but we got safely through into the quiet water beyond, and then rode
into the mouth of the river, a vision of fairy calm and beauty. Nipa
palms erected their rigid fern-like leaves directly from the water; they
were banked by varied tropical foliage, and shooting skywards were
the slender white stems of the coconut palms with their waving leafy
crowns.
After a short spell we walked for eight miles along the sand beach
round the bay till we came to the entrance of Hood lagoon, over
which we were ferried in a canoe, and on arriving at Keapara we
were hospitably received by Tau and his wife, the L.M.S. South Sea
teacher, who gave us afternoon tea before we visited the village.
The sand beach in front of the village presented a busy scene;
until now I had not come across such activity as was here displayed.
Several canoes were being made, and not only was there a
continuous succession of chopping noises, but the sense of smell
was also affected, partly by the smoke of the fires, but mainly by the
very disagreeable odour given out by the soft wood as it is chipped
by the adzes.
The trees of which the canoes are made grow up the Vanigela
River; they are cut down, and their trunks are floated down the
stream to its mouth. The Kalo men sell the lumber to the Keapara
men, who tow it to their village. The outside of the canoes is cut with
steel tomahawks obtained from the white man, but the logs are
hollowed out with stone adzes, the stone blade of which can be
shifted round to any angle by turning the holder on the shaft. It
seems strange that these primitive shipwrights should prefer stone
implements to iron ones for hollowing out the canoes; perhaps it is
because they are frightened lest the sharper iron blade should
inadvertently cut through the thin side of the hull. After the canoes
are dug out and trimmed down they are charred by fires lit outside
and inside them; the effect of this is to harden the wood, and I
suppose to somewhat fill up the pores so as to make the craft more
seaworthy. I believe that one result of applying fire to the canoes is
to make them open out more widely. Probably in precisely the same
manner, save that no metal tool was available, our Neolithic
ancestors manufactured their canoes. It was an unexpected
pleasure to have this glimpse into the Stone Age.

PLATE XV

HOLLOWING OUT A CANOE WITH STONE ADZES AT KEAPARA

 A BULAA GIRL BEING TATTOOED

Sitting on the sand beach was a man chipping out a wooden bowl
from a piece of the same kind of wood as that of which the canoes
were made. He employed a small adze, constructed on the same
principle as that of the large adzes used in canoe making. In this
instance the blade was made of iron, but so fashioned as precisely
to resemble the original stone blade; subsequently I procured a small
stone adze. We photographed the man at work, and, as we have
experienced often, he took no notice of us; but he appeared to be
much surprised when I bargained for his implement and the
unfinished bowl. A native cannot in the least understand why one
wants to purchase an unfinished article and the tool with which it is
being made.
The Keapara natives buzzed round us like flies, offering for sale
“curios” of all kinds and sea shells; often the former were broken and
worthless specimens. One did not know which way to turn, so
persistent were they, and the din was deafening. Well did they
maintain their reputation for being keen, and whenever possible,
unprincipled traders; still we did very well and got our things
reasonably enough. I understand that they live principally by barter,
not only locally, but also doing some trading up and down the coast.
Next morning we paid a visit to the adjoining fishing village of
Alukune, or Harukune, which is situated on the other side of the point
of land on which Keapara stands. The natives, as is usually the case
with fisher-folk in Europe, keep very much to themselves, but here
they have good reason for this aloofness. The more powerful
Keapara men have for generations been in the habit of levying toll
from them in the shape of fish and other marine produce. The
Alukune possessed no land, and were not allowed to acquire any,
though the Keapara had more than enough for their own wants.
Vegetable food being a necessity, the Alukune women either had to
go to Kalo for it or had to buy it from their Keapara neighbours,
giving fish in exchange, but the latter, being the stronger tribe, were
able to obtain the fish at a very cheap rate. They were not only
oppressed in this and other ways, but their women were seized and
taken as wives by Keapara men. Some thirty-eight years ago half the
village, driven to desperation by the oppressions of their neighbours,
left in a body and settled at Hood Point, and built the village of Bulaa.
The other half who remained were still held in subjection by
Keapara, and their condition was but little improved since the old
days until very recently, and even now they do not appear to be in a
happy or thriving condition.
Although the inhabitants of Alukune are fisher-folk, they obtain
their canoes from Keapara, and in return they have to pay half the
catch; in other words, they have to trade on the half-profit system.
We obtained very little in this village, but I cut some samples of
children’s hair, to the amusement of the unlocking crowd and to the
great perplexity of the children themselves. The children were
playing with toy miniature bows and arrows made from the mid-ribs
of palm leaflets.
Just before we started in the whale-boat English arrested a man
for petty larceny, and we had an exhibition of native grief. Men and
women rushed up to the prisoner as he was being handcuffed and
led off to the boat, rubbing noses and applying their mouths to his
cheek, but I did not hear any actual kissing. On all sides was
weeping and wailing; many clawed the sides of their heads and
faces either on one or both sides; some beat their heads and faces,
clasped hands were wrung alternately on each side of the head at
the level of the ear, frequently the clasped hands were held at the
back of the head. There was a great deal of tragedy for very little
cause, as the man was going for only a week’s imprisonment, or
rather a week of forced labour on roadmaking. The comic element
was that he had picked a policeman’s pocket.
We had a spanking sail across the bay, and had a second
breakfast on our arrival soon after eleven. About 12.30 Wilkin and I
walked over to Babaka to take some more photographs. Ray worked
that afternoon at languages, and Seligmann had a very profitable
time testing the keenness of the eyesight of the natives.
During the next few days we got through a fair amount of
anthropological measurements and other work. We persuaded some
girls to demonstrate the process of tattooing, which we
photographed. The girl to be tattooed lay on the ground, and the
operator held a special clay vessel in one hand, in which was a black
fluid paste made from burnt resin; this was applied on the skin by
means of a little stick. When the design was finished a thorn was
held in the left hand, while in the right hand was a small stick round
which strips of banana leaves were wound. The thorn was lightly
tapped with the stick until the pattern had been well punctured into
the skin.

PLATE XVI

A NATIVE OF BULAA

A BULAA YOUTH WITH RINGWORM

When a Papuan has a headache, or indeed any other kind of

ache, an attempt is generally made to alleviate the pain by letting
blood. Usually this is done by cutting the part affected with sharp
shells or fragments of glass, or with anything handy that has an
edge; but here, and in a few other places, the phlebotomy is also
performed by shooting with a diminutive bow and arrow. The bow is
made of two or three pieces of the mid-rib of palm leaflets tied
together, the string being a strand of vegetable fibre. The arrow is
also a mid-rib of a palm leaflet tipped with a splinter of glass
(originally a thorn formed the point); the shaft passes between two of
the components of the arc of the bow, and the butt is tied on to the
bow-string. Owing to this arrangement the arrow, when it is pulled
rhythmically and let go, punctures the skin on or about the same
spot.
Whilst in Bulaa I added very largely to my collection of samples of
the hair of the natives. The Papuan belongs to the group of men who
have dark skins and black woolly or frizzly hair. The hair is very
much like that of the true negro, but it grows much longer. In some
parts of New Guinea the hair is usually worn rolled into numerous
cords, which hang down all round the head like a thrum mop, but
among most of the people of the south-eastern part of the
Possession the hair is combed out so as to form a very characteristic
aureola, which is the glory of a Papuan dandy. It is astonishing,
however, the number of people one finds in this part of New Guinea
with curly, and even wavy hair. In a few cases the hair is almost quite
straight, whereas, as I have remarked, the hair of the typical Papuan
is frizzly or woolly, and so far as I am aware it is universally so
among the hill tribes of the interior, among the inhabitants of the
Papuan Gulf, and indeed all over the western portion of British New
Guinea. This variability in the character of the hair evidently points to
a racial mixture here. I was also surprised to find in this district the
tips of the hair vary from dark to quite a pale brown or a tan colour,
though the roots are black. I naturally put this down to bleaching,
owing to the use of lime for sanitary purposes; but Mr. English
assured me that it is a natural colour, a fact of some interest and
perplexity.
The marine pile dwellings of the village of Bulaa probably present,
at all events at a distance, much the same appearance as did the
lake dwellings of Central Europe in prehistoric times. People have
wondered how the primitive Swiss drove in the piles that supported
their houses. This question can only be answered approximately by
noting what people do nowadays. I therefore asked Mr. English to
arrange to have the process of pile-driving exhibited.
A post was procured, one end of which was roughly pointed, and
to the other extremity two long ropes were tied. One man scooped a
hole on the reef at low tide with his hands; the pile was then propped
up in the hole by several men. Two or three men steadied the post,
while several caught hold of each guy and gently swayed it to and
fro; the men who clasped the pole prevented it from overbalancing.
Gradually by its own weight the pile is thus wormed into the ground. I
was informed that when a pile is sunk actually in the sea a light
staging is erected near the top of the post; two or three men stand
on this framework, so that by their extra weight the pile may sink
more readily.
One day we saw Neolithic men making canoes at Keapara, and
here at Bulaa we saw the pile-dwellers at work with a marine pile-
village in the background.
I spent a fair amount of time on various occasions in getting a
number of small boys to make toys and play games, several of which
we photographed. Very little is known about the toys and games of
the children of savage peoples, and judging from the interest and
anthropological value of the study of the amusements of our own
children, these will prove an important field for research when more
facts are available. I played a good deal with the children, to their
and my amusement. I also showed them one or two of our games,
such as cock-fighting and hand-slapping; but I think they were not
sufficiently impressed by them to adopt them. I mention this,
however, in case a future traveller should find them still practised.
Toys made of leaves were common. The small boys cut off pieces
about ten to twelve inches in length from the origin of the leaves of a
tall, coarse grass that is used in thatching houses. The blade is split
off from each side of the mid-rib for about half its length; the two
flaps are twisted round the index finger of the right hand, and the
cleared mid-rib is held between the thumb and middle finger; the
hand is jerked, and the tearing off of the remaining portion of the
blade of the leaf gives a considerable impetus to the mid-rib, which
thus flies away like a miniature javelin. This was the simplest method
of playing, but there were three others, two of which necessitated the
use of both hands; the principle of gaining the impetus was the same
in all.
I was informed that this game is also played at Mawatta, a village
on the Torres Straits coast of British New Guinea, but I do not know
whether it occurs throughout the intermediate coast.
Rushes are twisted into diamond-shaped objects named kuru,
they are said to be stuck in houses for play. A Mawatta man claimed
that his people also made them, and said, “We look at hill, and make
him all the same.”
The following are all made of coconut palm leaves.
Lauga consists of two strips, each with three slits in them; the
puzzle is to make or to undo the interlacing as shown in the figure (p.
226).
The simple whirligig make is a very widely spread toy. It is also
found in the Solomon Islands in Melanesia, and in Funafuti (Ellice
Group) and Rotumah in Polynesia.
A toy wind instrument is made of strips of palm leaf wound spirally
so as to form a hollow cone or funnel, which varies from three inches
to about a foot in length. Inserted in the cavity are two long narrow
strips of leaf, or one long piece doubled upon itself; in either case
two similar ends project through the narrow orifice to form a “reed.”
It may not be amiss to explain that there are two main groups of
simple wind instruments that are blown by the mouth. In one the lips
are applied to the simple orifice, and it is their vibration intensified by
the sounding chamber of the instrument that produces the noise.
The conch shell and the trumpet are familiar examples of this group.
In the second group there is a vibrating arrangement which is
technically termed a “reed.” This group is divided into two classes:
(a) the “oboe” or “shawm” series in which the fixed or removable
mouthpiece is a tube, the ends of which are pinched together; (b) the
“clarinet” series which has a single vibrating tongue. The Bulaa toy
may be regarded as a kind of oboe.
 I was delighted to find this musical toy, as I remembered that my
friend Henry Balfour, the curator of the Pitt-Rivers Museum at
Oxford, had recently written a paper on a very similar instrument, the
“whithorn,” which was made of spirally wound strips of willow bark. I
have since learned from Mr. Balfour that in Somersetshire these are
called “Mayhorns,” and very similar spirally twisted rude oboes (also
of bark) have been recorded from France, Germany, and Finland in
Europe. A spirally twisted palm-leaf trumpet(?) is found in West
Africa, and similar instruments from Flores, Sumatra, and Celebes,
but I am not quite certain of the exact nature of these latter. The
Bulaa name for this instrument is vili vili. A Mawatta man at Bulaa
told me his people made it, where it was called upa, but I was not
able to check this statement.
 Fig. 26. Palm-leaf Toys, Bulaa

The occurrence of a reed instrument in this part of the world was

so surprising that further inquiries were necessary, and Mr. English
found out, after much questioning, that the toy was introduced by
Johnson, a West Indian negro.
 Hereby hang two useful warnings, whether this fact be true or not.
First, not to assume an object is native to the district because it is
found there, but always to make inquiries. Secondly, the need for
investigations, for in a few years all knowledge of the origin of this
particular toy would be forgotten. These reflections hold good for
other objects in all parts of the world. A few months later I found that
at Mabuiag, in Torres Straits, a bent leaf of the karbe tree is used as
a whistle by blowing with it between the lips.
Once I thought I was on the track of a bull-roarer, and was much
excited thereby, as that remarkable implement has not been
recorded south-east of the Papuan Gulf; but kwari kwari proved to be
a new kind of toy that makes a noise like a fly buzzing, or the flying
of a large grasshopper. It is made of a strip of palm leaf bent upon
itself, one end of which is tied by a short bit of fine fibre to a long thin
mid-rib. The two flaps of the strip are kept apart by a thin bent mid-
rib of a palm leaflet. The whole is then whirled round.
A modification of the lauga puzzle is one in which the same strip of
palm leaf is cut into two links. On looking closely, one finds that it is
made thus: cut a piece of leaf (cardboard will do, but then the
method of manufacture is too evident) right through the thick lines in
the accompanying figure; cut half through the thickness of the leaf,
or card, along the dotted lines, then split the material between these
lines, and separate the upper and lower surfaces; the white portion
will come away from the shaded link, as in the second figure; the two
projecting spurs can be cut away if thought desirable. I cannot
imagine how the natives found this out—that is, if it is their own
invention; and they assure me such is the case.
Small cone shells are spun between the thumb and fingers like a
teetotum.
Our old friend leap-frog is also a diversion for Papuan boys, as it
occurs at such widely-spread places as Bulaa and Kiwai. A row of
boys stand in a line some distance apart on their hands and feet; the
last boy leaps over the others in succession, putting his hands on
their backs in the usual way. He then takes his place in front of the
others, and the now “last man” follows. This appears to be a very
widely-spread game. In Korea and Japan it is called “jumping over,”
and the same attitude on all-fours is taken there as in New Guinea.
In England we stand on our legs only, and “tuck in our tuppenny.”
We also saw the children indulging in the familiar pig-a-back
(pĕkĕkau), hopping (kaikai), jumping (puri), and skipping.
In the game called evanena two rows of boys face one another.
Each boy takes hold of the arm of the boy opposite him at or
immediately above or below the elbow with one hand, with the other
hand he clasps his own arm, right hand may grasp the left arm or
vice versâ. This position is similar to our “king’s chair” or “queen’s
chair” with the exception that we clasp the wrist and not the arm. As
all the boys stand close together they form a double row with a
platform of arms between them. A small boy is placed standing on
the arms of the last pair of boys, and he walks forward on those of
the boys in front. As soon as he has left the last pair of boys they
rush forward and place themselves in front of the others, and clasp
their arms as before. In this way a continuous platform is maintained,
and the game continues till the walker tumbles off. This game is also
played at Elevara, Port Moresby.
A variant which I saw played at Elevara is called omoro, or “frog.”
In this case the boy, instead of walking on the arms, lies full length
on his stomach, and is jerked up and down and at the same time
forwards. Ray also saw this game played at Saguana, Kiwai Island,
where it is called mere kereme beretsi (“boy-throwing”).
The prettiest revolving game was that known as maki gegelaki.
Four boys laid at full length on the ground at right angles to one
another, so as to form a cross, with their feet touching; usually they
placed a large piece of the husk of a coconut in the centre, against
which they tightly pressed their feet. A small boy crouched on their
feet to steady them. Four other boys stood between those lying
down; they caught hold of their hands; this raised the arms and
bodies of the latter. The standing boys walked round and round (right
hand to centre), and the whole contrivance revolved like a four-
spoked wheel.
 Rapurapu. Four boys sit on the ground and interlock their legs in
the form of a square in such a way that the instep of the right foot
hooks over the pit of the knee of the boy to the right. They then stand
up and hop round on the left foot, clapping their hands rhythmically
and singing:—

“Rapu rapu tabai manu

Roroiatĕ atĕ atĕ
Roroiatĕ bada raita
Eaiimo eai eaiimo.”

As in Europe, the children have singing games, some of which I

have observed are:—
Kwaito pinupinu. A number of boys form a circle, catching hold of
each other’s hands, facing inwards. Two run into the circle and under
the arms of two other boys; when all the others have run under, the
last two twist themselves under their own arms, and the circle is now
complete again, but all the boys face outwards. They then revolve
sideways as fast as they can, gradually accelerating their speed till
one boy tumbles down. They all sing during the evolution:—

“Maru gĕno o, ana kwaito o, pinupinu o, kwaito pinupinu o,—ai!”

Mota ĕrĕmpto. A number of boys stand in a circle, each boy

catching hold of his neighbour’s wrists. One boy stands in the centre
with arms folded over his chest. The encircling boys sing:

“Mota erempto erempto

 Bariva derempto derempto
Mota tim
Bariba tim
Pekuluoa waiau—o.”

This sounds like a challenge, and immediately the rhyme is

finished, the central boy rushes at the joined hands of any two boys
and tries to burst through. The game is finished when he succeeds.
Korikini. Some half-dozen boys sit in a circle very close together;
each holds the first or index finger of his hands upwards, closing the
thumb and other fingers of one hand on the extended index of the
other, or on that of another boy; in this way a column of hands is
made, the uppermost having its free index finger pointing upwards.
One boy alone has his right hand disengaged; with the forefinger he
taps the uppermost index finger crosswise. The following is sung
during the operation:—

Korikini korikini, papa raurirauri marire

Stick up finger crossing one another
Agiana korikoana karigămuai.
I look take away finger under armpit.

The top hand is then removed and placed under the armpit of the
nearest boy. The tapping song is repeated for the next hand, which
is similarly placed under the armpit of the boy that happens to be
nearest. When all have their hands placed under the armpits, the
same boy as before gently scratches each hand in rotation while
singing:—

Pika pika kiaka pa

Gaule aule kiaka pa.

The first hand to be released is placed in the middle of the player’s

palm uppermost, and each succeeding hand is placed upon it in the
same manner; sometimes the two hands of a player are placed side
by side; the whole pile of hands is raised up and down. One boy with
a disengaged hand gently taps the uppermost of the pile of hands
three times, holding his index finger vertically downwards while he
sings:—

Toitoi tutumu; keanai nunapakau.

Three times tap ear hold him.

At the end of the refrain the tapped hand is removed, and the
nearest ear of the next player is held by it. When all the hands have
been released and every ear is held by a hand, the players swing
their bodies backwards and forwards, and pulling each other’s ears
with more or less vigour, all sing:—

Mekeri aria
Pull one another.
Kiko aria.

This continues until one of the players gives in.

The words for the ear-pulling may apparently be varied, as some
children once sung:—

Wapuri poto
Kaia poto
i i i.

Mr. Ray saw the korikini game played at Saguane, where it is

called kuke.
Kinimali. This is a very similar game to the foregoing. The players,
however, pinch up the skin of the back of each other’s hands, the
slightly flexed hands being placed one on the top of the other. The
whole column is swayed up and down to the following song:—

Kinimali lĕkwa lĕkwa

Pinch flesh let go
Malawa kĕta kĕta
(name of a yam) (name of a yam)
Ana olio malauli
Run a little boy
 Polaia polai.
Yellow

When this is finished, the top hand is placed at the bottom of the
column, palm uppermost, with extended fingers. The song is
repeated until all the hands are placed the one on the top of the
other. The Toitoi phase then finishes the game.
There appears to be considerable variation in these songs; we
found it very difficult to write them down, and when we did, it was still
more difficult to get a satisfactory translation; indeed, as with us at
home, some words do not appear to have a meaning. This is also
the case with many of the men’s legendary songs, the meaning of
which is now completely forgotten.
During our stay at Bulaa, we had one or two opportunities of
seeing the young people amuse themselves by dancing on the sand
beach. All those young men who had drums held them in their left
hands and beat them with their extended right hands; one man
rhythmically tapped the inside of his lime gourd with its spatula. The
girls edged themselves between the men, linking their arms within
those of the men. The drum-beats were in triplets ( ).
There was very little movement in the dancing. The men flexed their
knees slightly, and the girls swayed their petticoats laterally; in some
figures they swayed them backwards and forwards.
There were numerous figures, or separate small dances, in the
Bulaa dances. In one that was often repeated the majority of the
dancers formed a shaped group, lads and lassies alternating; all
these remained in their places. Other dancers, men only, advanced
in couples, beating their drums and capering up the central space. In
some figures the dancing men zigzagged across the space in a
prancing manner as they proceeded up and down; in others they
formed two parallel rows, all facing one side of the hollow oblong,
and pranced sideways a few steps up and down the space. Then
they jumped right round, so as to face the opposite way, and
repeated the same process; then back again, and so on. In this
dance the girls swayed their petticoats backwards and forwards.