Found 9 article(s) for author 'Banks'

Interest Rate Conundrums in the Twenty-First Century

Interest Rate Conundrums in the Twenty-First Century. Samuel Hanson, March 31, 2017, Paper, “A large literature argues that long-term interest rates appear to react far more to high-frequency (for example, daily or monthly) movements in short-term interest rates than is predicted by the standard expectations hypothesis. We find that, since 2000, such high-frequency “excess sensitivity” remains evident in U.S. data and has, if anything, grown stronger. By contrast, the positive association between low-frequency changes (such as those seen at a six- or twelve-month horizon) in short- and long-term interest rates, which was quite strong before 2000, has weakened substantially in recent years. As a result, “conundrums”— defined as six- or twelve-month periods in which short rates and long rates move in opposite directions—have become far more common since 2000.Link

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The Financial Regulatory Reform Agenda in 2017

The Financial Regulatory Reform Agenda in 2017. Robin Greenwood, Samuel Hanson, Jeremy Stein, Adi Sunderam, February 2017, Paper, “We take stock of the post-crisis financial regulatory reform agenda. We highlight and summarize areas of clear progress, where post-crisis reforms should either be maintained or built upon. We then identify several areas where the new regulations could be streamlined or rolled back in an effort to reduce the burden on the financial sector, particularly on smaller banks.Link

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Publish the Secret Rules for Banks’ Living Wills

Publish the Secret Rules for Banks’ Living Wills. Hal Scott, June 10, 2016, Opinion. “The Federal Reserve and the Federal Deposit Insurance Corp. recently determined that five of America’s largest banks do not have credible plans to go through bankruptcy without relying on extraordinary government support. If these five firms— J.P. Morgan Chase, Bank of America, Wells Fargo, Bank of New York Mellon and State Street—can’t develop “living wills” that satisfy regulators, then the Dodd-Frank Act authorizes the government to break them up as soon as 2018.Link

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The Volcker Rule as structural law: implications for cost-benefit analysis and administrative law

The Volcker Rule as structural law: implications for cost-benefit analysis and administrative law. John Coates, 2016, Paper. “The Volcker rule, a key part of Congress’s response to the financial crisis, is best understood as a “structural law,” a traditional Anglo-American technique for governance of hybrid public-private institutions such as banks and central banks. The tradition extends much farther back in time than the Glass-Steagall Act, to which the Volcker Rule has been unfavorably (but unfairly) compared. The goals of the Volcker Rule are complex and ambitious, and not limited to reducing risk directly, but include reshaping banks’ organizational cultures. Another body of structural laws, part of the core of administrative law, attempts to restrain and discipline regulatory agencies, through process requirements such as cost-benefit analysis (CBA). Could the Volcker rule be the subject of reliable, precise, quantified CBA? Given the nature of the Volcker rule as structural law, its ambitions, and the current capacities of CBA, the answer is clearly “no,” as it would require regulators to anticipate, in advance of data, private market behavior in response to novel activity constraints.Link

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Vulnerable banks

Vulnerable banks. Robin Greenwood, March 2015, Paper. “We present a model in which fire sales propagate shocks across bank balance sheets. When a bank experiences a negative shock to its equity, a natural way to return to target leverage is to sell assets. If potential buyers are limited, then asset sales depress prices, in which case one bank’s sales impact other banks with common exposures. We show how this contagion effect adds up across the banking sector, and how it can be estimated empirically using balance sheet data. We compute bank exposures to system-wide deleveraging, as well as the spillovers induced by individual banks…” Link

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Harpooning the London Whale is no Substitute for Reform

Harpooning the London Whale is no Substitute for Reform. Mark Roe, August 15, 2013, Opinion. “And so the drama moves on to a courtroom. Two prime traders in JPMorgan Chase’s “London whale” misadventure have been indicted. Side plots may unfold, perhaps via extradition proceedings. But here is the big question: will the indictments lead to better, stronger financial markets? Well, yes and no. Recall the problem: JPMorgan’s London trading desk made trades that would be profitable if the post-crisis American economy remained weak. As the economy improved, the traders sought to reverse the investments…” Link verified August 15, 2013

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Sustainability in Financial Services Is Not About Being Green

Sustainability in Financial Services Is Not About Being Green. George Serafeim, May 15, 2013, Opinion. “The next time we hear about a bank or insurance company’s “green program” — like using energy efficient light bulbs or operating out of a LEED Platinum building — we’ll either scream or throw up. Don’t get us wrong. We aren’t “climate change deniers” and we believe that every individual and organization should use energy and other natural resources responsibly. Our problem with banks, insurance companies, and other financial institutions that tout their commitment to sustainability by…” Link Verified October 11, 2014

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Cyclicality of Credit Supply: Firm Level Evidence

Cyclicality of Credit Supply: Firm Level Evidence. Victoria Ivashina, August 23, 2011, Paper. “Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time- series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We address this question by studying firms’ substitution between bank debt and non-bank debt (public bonds) using firm-level data. Any firm that raises new debt must have a positive demand for external funds. Conditional on issuance of new debt, we interpret firm’s switching…” Link

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