Liberty Street Economics
July 23, 2012

A Principle for Forward-Looking Monitoring of Financial Intermediation: Follow the Banks!

In the previous posts in this series on the evolution of banks and financial intermediaries, my colleagues and I considered the extent to which banks still play a central role in financial intermediation, given the rise of the shadow banking system.

Income Evolution at BHCs: How Big BHCs Differ

As noted in the introduction (add link) to this series, over the past two decades financial intermediation has evolved from a traditional, bank-centered system to one where nonbanks play an increasing role. For my contribution (add link) to the series, I document how the sources of bank holding companies’ (BHC) income have evolved.

July 20, 2012

Peeling the Onion: A Structural View of U.S. Bank Holding Companies

When market observers talk about a “bank,” they are generally not referring to a single legal entity.

Posted at 7:00 am in Financial Institutions | Permalink | Comments (4)
July 19, 2012

The Dominant Role of Banks in Asset Securitization

As the previous posts have discussed, financial intermediation has evolved over the last few decades toward shadow banking.

Posted at 7:00 am in Financial Institutions | Permalink | Comments (1)
July 18, 2012

The Role of Bank Credit Enhancements in Securitization

As Nicola Cetorelli observes in his introductory post, securitization is a key element of the evolution from banking to shadow banking.

July 17, 2012

The Rise of the Originate-to-Distribute Model and the Role of Banks in Financial Intermediation

In yesterday’s post, Nicola Cetorelli argued that while financial intermediation has changed dramatically over the last two decades, banks have adapted and remained key players in the process of channeling funds between lenders and borrowers.

Just Released: Housing Checkup–Has the Market Finally Bottomed Out?

In this post, we examine a number of important housing market “vital signs” that collectively help to indicate the health status of local markets at the county level.

Posted at 7:00 am in Housing | Permalink | Comments (0)
July 16, 2012

Introducing a Series on the Evolution of Banks and Financial Intermediation

It used to be simple: Asked how to describe financial intermediation, you would just mention the word “bank.”

July 13, 2012

Historical Echoes: Whip Inflation Now … and Then

In October I974, with consumer inflation running at more than 10 percent annually, President Gerald Ford gave a now famous speech in which he proclaimed: “There is only one point on which all advisers have agreed: We must whip inflation right now.”

July 11, 2012

The Puzzling Pre-FOMC Announcement “Drift”

For many years, economists have struggled to explain the “equity premium puzzle”—the fact that the average return on stocks is larger than what would be expected to compensate for their riskiness.

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