Found 22 article(s) for author 'Samuel Hanson'

Who Neglects Risk? Investor Experience and the Credit Boom

Who Neglects Risk? Investor Experience and the Credit Boom. Samuel G. Hanson, Adi Sunderam, April 2015, Paper. “Many argue that overoptimistic thinking on the part of lenders helps fuel credit booms. We use new micro-data on mutual funds’ holdings of securitizations to examine which investors are susceptible to such boom-time thinking. We show that firsthand experience plays a key role in shaping investors beliefs. During the 2003 to 2007 mortgage boom, inexperienced fund managers loaded up on securitizations linked to nonprime mortgages, accumulating twice the holdings of more seasoned managers by 2007…” Link

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Government Debt Management at the Zero Lower Bound

Government Debt Management at the Zero Lower Bound. Robin Greenwood, Samuel G. Hanson, Lawrence H. Summers, September 30, 2014, Paper. “This paper re-examines government debt management policy in light of the U.S. experience with extraordinary fiscal and monetary policies since 2008. We first document that the Treasury’s decision to lengthen the average maturity of the debt has partially offset the Federal Reserve’s attempts to reduce the supply of long-term bonds held by private investors through its policy of quantitative easing…” May require purchase or user account. Link

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Banks as Patient Fixed Income Investors

Banks as Patient Fixed Income Investors. Samuel G. Hanson, Andrei Shleifer, Jeremy Stein, August 2014, Paper. “We examine the business model of traditional commercial banks in the context of their coexistence wit shadow banks. While both types of intermediaries create safe “money-like” claims, they go about this in very different ways. Traditional banks create safe claims with a combination of costly equity capital and fixed income assets that allows their depositors to remain “sleepy”: They do not have to pay attention to transient fluctuations in the mark-to-market value of bank assets. In contrast…” Link Verified October 18, 2014

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An Evaluation of Money Market Fund Reform Proposals

An Evaluation of Money Market Fund Reform Proposals. Samuel G. Hanson, David S. Scharfstein, Adi Sunderam, May 2014, Paper. “U.S. money market mutual funds (MMFs) are an important source of dollar funding for global financial institutions, particularly those headquartered outside the U.S. MMFs proved to be a source of considerable instability during the financial crisis of 2007-2009, resulting in extraordinary government support to help stabilize the funding of global financial institutions. In light of the problems that emerged during the crisis, a number of MMF reforms have been proposed…” Link

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Monetary Policy and Long-Term Real Rates

Monetary Policy and Long-Term Real Rates. Samuel G. Hanson, Jeremy Stein, April 2014, Paper. “Changes in monetary policy have surprisingly strong effects on forward real rates in the distant future. A 100 basis point increase in the two-year nominal yield on an FOMC announcement day is associated with a 42 basis point increase in the ten-year forward real rate. This finding is at odds with standard macro models based on sticky nominal prices, which imply that monetary policy cannot move real rates over a horizon longer than that over which all prices in the economy can readjust…” Link

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Are There Too Many Safe Securities? Securitization and the Incentives for Information Production

Are There Too Many Safe Securities? Securitization and the Incentives for Information Production. Samuel Hanson, Adi Sunderam, June 2013, Paper. “We present a model that helps explain several past collapses of securitization markets. Originators issue too many informationally insensitive securities in good times, blunting investor incentives to become informed. The resulting scarcity of informed investors exacerbates market collapses in bad times. Inefficiency arises because informed investors are a public good from the perspective of originators. All originators benefit from the presence of additional informed investors in bad times…” Link verified March 28, 2014

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An Evaluation of Money Market Fund Reform Proposals

An Evaluation of Money Market Fund Reform Proposals. Samuel Hanson, David S. Scharfstein, Adi Sunderam, April 2013, Paper. “We analyze the leading reform proposals to address the structural vulnerabilities of money market mutual funds (MMFs). We assume that the main goal of MMF reform is safeguarding financial stability. In light of this goal, reforms should reduce the ex ante incentives for MMFs to take excessive risk and increase the ex post resilience of MMFs to system-wide runs. Our analysis suggests that requiring MMFs to have subordinated capital buffers could generate significant financial stability benefits. Subordinated capital provides MMFs…” Link

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The Minimum Balance at Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds

The Minimum Balance at Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds. Samuel Hanson, 2013, Opinion. “Many academics, policymakers, and market participants have recently been pushing for a significant overhaul of money market fund (MMF) regulations. Others oppose any significant changes in these regulations. Why has this historically sleepy corner of the mutual fund sector become a frontline battle in the postcrisis debate about financial regulation? And what can this debate tell us about the theory and practice of financial regulation and its future prospects for success?…” Link

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A Macroprudential Approach to Financial Regulation

A Macroprudential Approach to Financial Regulation. Jeremy Stein, Samuel Hanson, Winter 2011, Paper. “Many observers have argued that the regulatory framework in place prior to the global financial crisis was deficient because it was largely “microprudential” in nature. A microprudential approach is one in which regulation is partial equilibrium in its conception and aimed at preventing the costly failure of individual financial institutions. By contrast, a “macroprudential” approach recognizes the importance of general equilibrium effects, and seeks to safeguard the financial system as a whole. In the aftermath of the…” Link

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