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10 posts from August 2017

August 23, 2017

At the New York Fed: The Appropriate Government Role in U.S. Mortgage Markets



While the U.S. mortgage finance system was at the center of the recent financial crisis, it remains largely untouched by legislative reforms. At the center of these conversations are Fannie Mae and Freddie Mac—both of which were placed into federal conservatorship in September 2008. Now, nearly nine years later, the fate of these two government-sponsored enterprises (GSEs) and the prospect of related changes to the mortgage finance system are once again a focus of policy discussion. In this post, we summarize the main themes of a recent New York Fed workshop where policymakers, academics, and practitioners gathered to consider the future structure of the U.S. housing finance system.

Continue reading "At the New York Fed: The Appropriate Government Role in U.S. Mortgage Markets" »

Posted by Blog Author at 7:00 AM in Housing, Mortgages | Permalink | Comments (0)

August 21, 2017

Just Released: Introducing the SCE Labor Market Survey



SCE_2017_news-labor-0821_460_art

The New York Fed for the first time released its Survey of Consumer Expectations (SCE) Labor Market Survey which focuses on individuals’ experiences and expectations in the labor market. These data have been collected every four months since March 2014 as part of the SCE. It is being introduced now because the module has enough historical data to reveal notable trends. In this post we introduce the SCE Labor Market Survey and highlight some of its features.

Continue reading "Just Released: Introducing the SCE Labor Market Survey" »

Posted by Blog Author at 11:00 AM in Employment, Expectations, Human Capital, Labor Market, Unemployment, Wages | Permalink | Comments (0)

August 18, 2017

“Hey, Economist!” How Was Your Ph.D. Internship?

LSE_2017_qa-phd-interns_delaney_460_art

This week, four Ph.D. students in economics and finance are wrapping up their summer internships at the New York Fed’s Research Department. The ten-week internships—which are compensated—offer interns the opportunity to further their dissertation research, interact with the Bank’s research economists, and give informal, “brown bag” lunch seminars to hear feedback on their work.

Continue reading "“Hey, Economist!” How Was Your Ph.D. Internship?" »

Posted by Blog Author at 9:34 AM in Federal Reserve, Hey, Economist! | Permalink | Comments (0)

August 16, 2017

Counterparty and Collateral Policies of Central Bank Lending Facilities



Editor’s note: When this post was first published there was an omission in text; text has been restored. (August 16, 2017, 9:05 a.m.)

LSE_Counterparty and Collateral Policies of Central Bank Lending Facilities

In a previous post, we compared the Federal Reserve’s discount window with the standing lending facilities (SLFs) at the Bank of England (BoE), the European Central Bank (ECB), and the Bank of Japan (BoJ). We showed that the Fed’s discount window was less integrated with monetary policy than the SLFs of the other central banks. In this post, we observe that the counterparty and collateral policies of the Fed’s discount window are similarly less integrated with the practices involved in monetary policy operations, in comparison with the other central banks.

Continue reading "Counterparty and Collateral Policies of Central Bank Lending Facilities" »

Posted by Blog Author at 7:00 AM in Central Bank, Monetary Policy | Permalink | Comments (0)

August 15, 2017

Just Released: More Credit Cards, Higher Limits, and . . . an Uptick in Delinquency



LSE_Just Released: More Credit Cards, Higher Limits, and . . .  an Uptick in Delinquency

Today the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the second quarter of 2017. Overall debt balances increased in the period, continuing their moderate growth since 2013. Nearly all types of balances grew, with mortgages and auto loans rising by $64 billion and $23 billion, respectively. Credit card balances increased by $20 billion, recovering from the typical seasonal first-quarter decline. The overall balance surpassed its previous peak in the first quarter. We wrote here about how the new peak poses little concern in and of itself—after all, the debt’s composition and characteristics are now very different than in 2008. There are, however, aspects of the household balance sheet that warrant close monitoring. For example, last year, we pointed out that there had been a moderate rise in the number of credit cards issued to nonprime borrowers. Separately, last quarter we noted an uptick in delinquency transitions for credit card balances, and we observed another climb in this quarter. So here, we further investigate how credit card balances, accounts, and delinquencies have evolved over the past year.

Continue reading "Just Released: More Credit Cards, Higher Limits, and . . . an Uptick in Delinquency" »

Posted by Blog Author at 11:00 AM in Credit, Household Finance | Permalink | Comments (0)

August 10, 2017

Just Released: Economic Press Briefing Focuses on Regional Wage Inequality



LSE_Just Released: Economic Press Briefing Focuses on Regional Wage Inequality

The New York-Northern New Jersey region is home to some of the most and least unequal places in the nation, based on research presented today at our economic press briefing examining wage inequality in the region. Wage inequality—meaning the disparity in earnings between workers—has increased significantly in the United States since the early 1980s, though some places have much more wage inequality than others. Fairfield, Conn., for example, ranks as the most unequal metropolitan area in the country, and the New York–Northern New Jersey metropolitan area ranks in the top ten. On the other hand, most of the metropolitan areas in upstate New York are among the least unequal places in the country.

Continue reading "Just Released: Economic Press Briefing Focuses on Regional Wage Inequality" »

Posted by Blog Author at 10:00 AM in Labor Market, Regional Analysis | Permalink | Comments (0)

August 09, 2017

Investor Diversity and Liquidity in the Secondary Loan Market



LSE_Investor Diversity and Liquidity in the Secondary Loan Market

Over the last two decades, the U.S. secondary loan market has evolved from a relatively sleepy market dominated by banks and insurance companies that trade only occasionally to a more active market comprising a diversified set of institutional investors, including collateralized loan obligations (CLOs), loan mutual funds, hedge funds, pension funds, brokers, and private equity firms. This shift resulted from the growing presence of these investors in the syndicates of corporate loans, as shown in the chart below. In 1991 the average term loan had just two different types of investors; by 2013 that number had grown to five.

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Posted by Blog Author at 7:00 AM in Banks, Financial Markets | Permalink | Comments (0)

August 07, 2017

Regulatory Incentives and Quarter-End Dynamics in the Repo Market



LSE_Regulatory Incentives and Quarter-End Dynamics in the Repo Market

Since the global financial crisis, central bankers and other prudential authorities have been working to design and implement new banking regulations, known as Basel III, to reduce risk in the financial sector. Although most features of the Basel III regime are implemented consistently across jurisdictions, some important details vary. In particular, banks headquartered in the euro area, Switzerland, and Japan report their leverage ratios—essentially, capital divided by total consolidated assets—as a snapshot of their value on the last day of the quarter. In contrast, institutions headquartered in the United States and the United Kingdom report most leverage ratio components as averages of their daily values over the quarter. In this post, we study the impact of this difference in regulatory implementation on rates and quantities borrowed in the U.S. repo market.

Continue reading "Regulatory Incentives and Quarter-End Dynamics in the Repo Market" »

Posted by Blog Author at 7:00 AM in Banks, Financial Markets, Repo | Permalink | Comments (2)

August 04, 2017

A Closer Look at the Fed’s Balance Sheet Accounting



LSE_2017_A Closer Look at the Fed’s Balance Sheet Accountingt


An earlier post on how the Fed changes the size of its balance sheet prompted several questions from readers about the Federal Reserve’s accounting of asset purchases and the payment of principal by the Treasury on Treasury securities owned by the Fed. In this post, we provide a more detailed explanation of the accounting rules that govern these transactions.

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Posted by Blog Author at 7:00 AM in Balance of Payments, Central Bank, Federal Reserve, Monetary Policy, Treasury | Permalink | Comments (6)

August 02, 2017

Were Banks Ever ‘Boring’?



LSE_Were Banks Ever ‘Boring’?

In a previous post, I documented that much of the expansion into nontraditional activities by U.S. banks began well before the passage of the Gramm-Leach-Bliley Act in 1999, the legislation that repealed much of the Glass-Steagall Act of 1933. The historical record actually contains many prior instances of the Glass-Steagall restrictions being circumvented, with nonbank firms allowed to operate as financial conglomerates and engage in activities that go beyond traditional banking. These broad industry dynamics might indicate that the business of banking tends to expand firm boundaries beyond a
traditional—“boring”—perimeter.

Continue reading "Were Banks Ever ‘Boring’?" »

Posted by Blog Author at 7:00 AM in Banks, Financial Institutions, Regulation | Permalink | Comments (2)

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