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6 posts from July 2019

July 19, 2019

At the New York Fed: Research Conference on FinTech



At the New York Fed: Research Conference on FinTech

Financial technology (“FinTech”) refers to the evolving intersection of financial services and technology. In March, the New York Fed hosted "The First New York Fed Research Conference on FinTech” to understand the implications of FinTech developments on issues that are relevant to the Fed’s mandates such as lending, payments, and regulation. In this post, we summarize the principal themes and findings of the conference.

Continue reading "At the New York Fed: Research Conference on FinTech" »

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

July 17, 2019

How Do Large Banks Manage Their Cash?



Second of two posts
How Do Large Banks Manage Their Cash?

As the aggregate supply of reserves shrinks and large banks implement liquidity regulations, they may follow a variety of liquidity management strategies depending on their business models and the interest rate differences between alternative liquid instruments. For example, the banks may continue to hold large amounts of excess reserves or shift to Treasury or agency securities or shrink their balance sheets. In this post, we provide new evidence on how large banks have managed their cash, which is the largest component of reserves, on a daily basis since the implementation of liquidity regulations.

Continue reading "How Do Large Banks Manage Their Cash?" »

Posted by Blog Author at 7:00 AM in Banks, Federal Reserve, Liquidity, Regulation, Repo, Treasury | Permalink | Comments (2)

July 15, 2019

Large Bank Cash Balances and Liquidity Regulations



Update (9 a.m.): An earlier version of this post transposed line labels in the first figure. The error has been corrected.

First of two posts
Large Bank Cash Balances and Liquidity Regulations

The Federal Open Market Committee (FOMC) has recently communicated its aim to continue implementing monetary policy in a regime that maintains an ample supply of reserves, though with a significantly lower level of reserves than has prevailed in recent years. The liquidity needs of the largest U.S. commercial banks play an important role in understanding the banking system’s appetite for actual reserve holdings, which we refer to as bank reserve demand. In this post, we discuss the recent evolution of large bank cash balances and the effect of liquidity regulations on these balances. In part two of this series, we provide new evidence on how the largest banks manage their liquidity needs on a daily basis.

Continue reading "Large Bank Cash Balances and Liquidity Regulations" »

Posted by Blog Author at 7:00 AM in Banks, Federal Reserve, Fire Sale, Liquidity, Regulation | Permalink | Comments (1)

July 12, 2019

Just Released: Historical Reconstruction of the New York Fed Staff Nowcast, 2002-15



Just Released: Historical Reconstruction of the New York Fed Staff Nowcast, 2002-15

The New York Fed Staff Nowcast has been running for over three years. Each Friday at 11:15 a.m., we publish our updated predictions for real GDP growth based on the data released each week. When the Bureau of Economic Analysis (BEA) releases the first estimate of GDP growth, we stop updating our nowcast and archive it. We maintain these archives as part of our Nowcasting Report on the New York Fed’s public website to allow users to study the features of the nowcast and its accuracy. Now, to better understand the model and its performance during different cyclical episodes, we are publishing extended historical archives of the nowcast. Doing so provides fourteen additional years of forecasts that can be used not only to evaluate our nowcast model, but also to explore daily U.S. economic history through the model’s lens.

Continue reading "Just Released: Historical Reconstruction of the New York Fed Staff Nowcast, 2002-15" »

Posted by Blog Author at 11:27 AM in Forecasting, Great Recession | Permalink | Comments (0)

July 10, 2019

Did the Value of a College Degree Decline during the Great Recession?



Did the Value of a College Degree Decline during the Great Recession?

In an earlier post, we studied how educational attainment affects labor market outcomes and earnings inequality. In this post, we investigate whether these labor market effects were preserved across the last business cycle: Did students with certain types of educational attainment weather the recession better?

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Posted by Blog Author at 7:00 AM in Education, Employment, Great Recession, Human Capital, Inequality, Labor Economics, Labor Market, Recession, Wages | Permalink | Comments (5)

July 08, 2019

From Policy Rates to Market Rates—Untangling the U.S. Dollar Funding Market



From Policy Rates to Market Rates—Untangling the U.S. Dollar Funding Market

How do changes in the rate that the Federal Reserve pays on reserves held by depository institutions affect rates in money markets in which the Fed does not participate? Through which channels do changes in the so-called administered rates reach rates in onshore and offshore U.S. dollar money markets? In this post, we answer these questions with the help of an interactive map that guides us through the web of interconnected relationships between the Fed, key market players, and the various instruments in the U.S. dollar funding market, highlighting the linkages across the short-term financial products that form this market.

Continue reading "From Policy Rates to Market Rates—Untangling the U.S. Dollar Funding Market" »

Posted by Blog Author at 7:00 AM in Banks, Central Bank, Fed Funds, Federal Reserve, Monetary Policy | Permalink | Comments (5)

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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 Asani Sarkar, all economists in the Bank’s Research Group.

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