Liberty Street Economics
Liberty Street Economics
Return to Liberty Street Economics Home Page

7 posts from September 2017

September 29, 2017

Hey, Economist! Tell Us about Your First Year as Research Director of the New York Fed



LSE_2017_qa-hirtle_delaney_460

A year has passed since Beverly Hirtle was named director of research for the Federal Reserve Bank of New York. Before assuming that position, Bev played many roles at the Bank over the last thirty years, including serving as the deputy chair of the Federal Reserve Model Oversight Group responsible for designing and implementing the Comprehensive Capital Analysis and Review and Dodd-Frank Act stress tests. But what was it like to become the head of the Research and Statistics Group and director of research? Hirtle offers some insight into her latest role.

Continue reading "Hey, Economist! Tell Us about Your First Year as Research Director of the New York Fed" »

Posted by Blog Author at 7:00 AM | Permalink | Comments (0)

September 27, 2017

Why Pay Interest on Excess Reserve Balances?



LSE_2017_Why Pay Interest on Excess Reserve Balances?

In a previous post, we described some reasons why it is beneficial to pay interest on required reserve balances. Here we turn to arguments in favor of paying interest on excess reserve balances. Former Federal Reserve Chairman Ben Bernanke and former Vice Chairman Donald Kohn recently discussed many potential benefits of paying interest on excess reserve balances and some common misunderstandings, including that paying interest on reserves restricts bank lending and provides a subsidy to banks. In this post, we focus primarily on benefits related to the efficiency of the payment system and the reduction in the need for the provision of credit by the Fed when operating in a framework of abundant reserves.

Continue reading "Why Pay Interest on Excess Reserve Balances?" »

Posted by Blog Author at 7:00 AM in Central Bank, Federal Reserve, Monetary Policy | Permalink | Comments (1)

September 26, 2017

The Treasury Market Practices Group: A Consequential First Decade



LSE_2017_The Treasury Market Practices Group: A Consequential First Decade

The Treasury Market Practices Group (TMPG) was formed in February 2007 in response to the appearance of some questionable trading practices in the secondary market for U.S. Treasury securities. (A history of the origins of the TMPG is available here.) Left unaddressed, the practices threatened to harm the efficiency and integrity of an essential global benchmark market. The Group responded by identifying and publicizing “best practices” in trading Treasury securities—a statement of behavioral norms intended to maintain a level and competitive playing field for all market participants. The Group’s focus expanded in 2008 to include market architecture issues, and again in 2010 to include the federal agency debt and mortgage-backed securities (MBS) markets.

Continue reading "The Treasury Market Practices Group: A Consequential First Decade" »

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

September 25, 2017

Why Pay Interest on Required Reserve Balances?



LSE_2017.09.25_Interest-on-Reserves_GettyImages-824163956_460x288


The Federal Reserve has paid interest on reserves held by banks in their Fed accounts since 2008. Why should it do so? Here, we describe some benefits of paying interest on required reserve balances. Since forcing banks to hold unremunerated reserves would be akin to levying a tax on them, paying interest on these balances is a way to eliminate or greatly reduce that tax and its negative effects.

Continue reading "Why Pay Interest on Required Reserve Balances?" »

Posted by Blog Author at 7:00 AM in Federal Reserve, Monetary Policy | Permalink | Comments (10)

September 22, 2017

Just Released: A Monthly Underlying Inflation Gauge



LSE_Just Released: A Monthly Underlying Inflation Gauge

Today marks the launch of the monthly publication of the Underlying Inflation Gauge (UIG). We are reporting two UIG measures, described recently on Liberty Street Economics, that are constructed to provide an estimate of the trend, or persistent, component of inflation. One measure is derived using a large number of disaggregated price series in the consumer price index (CPI), while the second measure incorporates additional information from macroeconomic and financial variables.

Continue reading "Just Released: A Monthly Underlying Inflation Gauge" »

Posted by Blog Author at 7:00 AM in Fiscal Policy, FOMC, Forecasting, Inflation | Permalink | Comments (2)

September 08, 2017

The New York Fed DSGE Model Forecast—August 2017



This post presents our quarterly update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since May 2017.

Continue reading "The New York Fed DSGE Model Forecast—August 2017" »

Posted by Blog Author at 7:00 AM in DSGE, Forecasting, Macroecon, Monetary Policy | Permalink | Comments (0)

September 06, 2017

What Drives International Bank Credit?



LSE_2017_What Drives International Bank Credit?

A major question facing policymakers is how to deal with slumps in bank credit. The policy prescriptions are very different depending on whether the decline is a result of global forces, domestic demand, or supply problems in a particular banking system. We present findings from new research that exactly decompose the growth in banks’ aggregate foreign credit into these three factors. Using global banking data for the period 2000-16, we uncover some striking patterns in bilateral credit relationships between consolidated banking systems and borrowers in more than 200 countries. The most important we term the “Anna Karenina Principle” of global banking: all healthy credit relationships behave alike; each unhealthy credit relationship is unhealthy in its own way.

Continue reading "What Drives International Bank Credit?" »

Posted by Blog Author at 7:00 AM in Bank Capital, Banks, Credit, Crisis, Financial Markets, International Economics | Permalink | Comments (0)

About the Blog
Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Donald Morgan, all economists in the Bank’s Research Group.

The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.


Economic Research Tracker

Liberty Street Economics is now available on the iPhone® and iPad® and can be customized by economic research topic or economist.


Useful Links
Comment Guidelines
We encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:
Please be brief: Comments are limited to 1500 characters.
Please be quick: Comments submitted after COB on Friday will not be published until Monday morning.
Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.
Please be on-topic and patient: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post. We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will not be posted.‎
Disclosure Policy
The LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.
Archives