Liberty Street Economics
February 10, 2017

Historical Echoes: The Legacy of Freedman’s Savings and Trust



LSE_Historical Echoes: The Legacy of Freedman’s Savings and Trust

Freedman’s Savings and Trust Company, often referred to as the Freedman’s Bank, was created specifically for former slaves and African-American soldiers. It was established by legislation signed by Abraham Lincoln on March 3, 1865, only weeks before his assassination. Groundwork for the bank was laid during a meeting in January of that year by abolitionist preacher John Alvord, who met with a number of others to discuss the possibility of founding a system to assist freed African-Americans in their savings, financial development, and integration into American economic society. In the ten years of its existence, the Freedman’s Bank brought hope and then heartbreak to the African-American community.

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

February 08, 2017

Beyond 30: Long-Term Treasury Bond Issuance from 1957 to 1965



LSE_2017_Long-Term Treasury Bond Issuance from 1957 to 1965

As noted in our previous post, thirty years has marked the outer boundary of Treasury bond maturities since “regular and predictable” issuance of coupon-bearing Treasury debt became the norm in the 1970s. However, the Treasury issued bonds with maturities of greater than thirty years on seven occasions in the 1950s and 1960s, in an effort to lengthen the maturity structure of the debt. While our earlier post described the efforts of Treasury debt managers to lengthen debt maturities between 1953 and 1957, this post examines the period from 1957 to 1965. An expanded version of both posts is available here.

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

February 06, 2017

Beyond 30: Long-Term Treasury Bond Issuance from 1953 to 1957



LSE_2017_Long-Term Treasury Bond Issuance from 1953 to 1957

Ever since “regular and predictable” issuance of coupon-bearing Treasury debt became the norm in the 1970s, thirty years has marked the outer boundary of Treasury bond maturities. However, longer-term bonds were not unknown in earlier years. Seven such bonds, including one 40-year bond, were issued between 1955 and 1963. The common thread that binds the seven bonds together was the interest of Treasury debt managers in lengthening the maturity structure of the debt. This post describes the efforts to lengthen debt maturities between 1953 and 1957. A subsequent post will examine the period from 1957 to 1965. An extended version of both posts is available here.

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

January 23, 2017

Measuring Americans’ Expectations Following the 2016 Election



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While consumer confidence as measured by various surveys has increased sharply since the national election, the New York Fed's Survey of Consumer Expectations (SCE) has shown little notable change in expectations. In this post, we show that the difference may partly reflect systematic compositional changes whereby respondents who answer a survey after the election differ in important ways from those answering the survey before the election—something which the SCE largely avoids. We also show that the flat average aggregate outlook in the SCE masks substantial regional/partisan heterogeneity in shifts in expectations.

January 20, 2017

Historical Echoes: Are There Any Banks on Bank Street?



LSE_2017_Are There Any Banks on Bank Street?

Bank Street in New York City is a quaint little six-block stretch in Greenwich Village (see this 48-second video) with a huge cultural legacy—but no banks. Many cities and towns have a Bank Street and often the street is so named because that's where most of the banks were originally located. (It is not likely that any Bank Street got its name because of its proximity to a riverbank.) However, New York City’s Bank Street is not where the banks were originally located and it's not even in the financial district—it's in Greenwich Village. Why, then, is it called “Bank Street?”

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments ( 1 )

January 18, 2017

Advent of Trade Reporting for U.S. Treasury Securities



Greater transparency is coming to the U.S. Treasury securities market. Members of the Financial Industry Regulatory Authority (FINRA) will be required to report their trades in Treasuries using FINRA’s Trade Reporting and Compliance Engine (TRACE) starting July 10, 2017. Although initial collection efforts are focused on providing such data to the official sector, the public will likely have access in the future. In this post, I discuss the motivation for such reporting, how it came to be decided on, and the evidence from the corporate bond market on how public access to such data affects trading costs.

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

January 13, 2017

Historical Echoes: Tracking Money



LSE_Historical Echoes: Tracking Money

Have you ever wondered where your dollars go when you spend them? Not in financial terms, but their physical location? Well, there’s an app and a website for that.

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments ( 3 )

January 11, 2017

Credit Market Arbitrage and Regulatory Leverage



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In a companion post, we examined the recent trends in arbitraged-based measures of liquidity in the cash bond and credit default swap (CDS) markets. In this post, we turn to the mechanics of the CDS-bond arbitrage trade and explore how the costs and profitability of such trades might be affected by the finalization of the supplementary leverage ratio (SLR) rule in September 2014.

Posted by Blog Author at 7:00 AM in Financial Markets | Permalink | Comments ( 1 )

January 09, 2017

Trends in Arbitrage-Based Measures of Bond Liquidity



LSE_2017_arbitrage_boyarchenko_460_art

Corporate bonds are an important source of funding for public corporations in the United States. When these bonds cannot be easily traded in secondary markets or when investors cannot easily hedge their bond positions in derivatives markets, the issuance costs to corporations increase, leading to higher overall funding costs. In this post, we examine recent trends in arbitrage-based measures of liquidity in corporate bond and credit default swap (CDS) markets and evaluate potential explanations for the deterioration in these measures that occurred between the middle of 2015 and early 2016.

December 21, 2016

Hey, Economist! Tobias Adrian Reflects on His Work at the N.Y. Fed before Heading to the IMF

LSE_Hey, Economist! Tobias Adrian Reflects on His Work at the N.Y. Fed before Heading to the IMF

Tobias Adrian is leaving the New York Fed to become the Financial Counselor and Director of the Monetary and Capital Markets Department at the International Monetary Fund (IMF). In announcing Adrian’s appointment, Christine Lagarde, managing director of the IMF, described Tobias as “internationally highly regarded for his insightful analytical work.” Until he starts his new position at the beginning of 2017, Adrian will be winding down his service as Senior Vice President of the New York Fed and Associate Director of the Bank’s Research and Statistics Group. Before he moves on to the IMF, Adrian shared some insight on his time at the Bank.

Posted by Blog Author at 7:00 AM in Monetary Policy | Permalink | Comments ( 2 )

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