178 posts on "Banks"
August 9, 2017
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.
August 7, 2017
Regulatory Incentives and Quarter‑End Dynamics in the Repo Market
Since the global financial crisis, central bankers and other prudential authorities have worked 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.
August 2, 2017
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activities by U.S. banks began well before the passage of the Gramm-Leach-Bliley Act in 1999, the legislation that repealed much of the Glass-Steagall Act of 1933.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.
July 31, 2017
Were Banks ‘Boring’ before the Repeal of Glass‑Steagall?
Since the global financial crisis and Great Recession, many critics have called for regulatory and legislative reforms to restore a system of “boring” banks constrained to traditional banking activities like deposit taking and lending.
June 21, 2017
Low Interest Rates and Bank Profits
The Fed’s December 2015 decision to raise interest rates after an unprecedented seven-year stasis offers a chance to assess the link between interest rates and bank profitability.
June 1, 2017
Just Released: Bank Loan Performance Under the Magnifying Glass
The New York Fed’s recently released Quarterly Trends for Consolidated U.S. Banking Organizations (QT report) confirms that bank loan portfolios look a lot healthier than they did just a few years ago, reflecting the sustained economic recovery from the Great Recession. In this post, we sharpen the focus to look at bank loan performance in more detail, using more disaggregated charts added to the QT report this quarter.
February 22, 2017
Getting More from the Senior Loan Officer Opinion Survey?
Every quarter, senior loan officers at selected large banks around the United States are asked by Fed economists how their standards for approving business loans changed compared with the quarter before. Of all the questions in the Senior Loan Officer Opinion Survey (SLOOS), responses to that question about standards usually attract the most attention from the financial press and researchers. Relatively ignored by comparison are loan officers’ reports on how they changed interest spreads, collateral requirements, and other terms on loans they are willing to approve. Lenders can clearly expand or contract credit by altering those terms even without changing their standards for approving loans, so we investigate whether the reports on loan terms collected in the SLOOS are also informative.
May 5, 2016
Borrowing, Lending, and Swapping Collateral in GCF Repo®
By Marco Cipriani and Adam Copeland In the third post in this series, we examined GCF Repo® traders’ end-of-day strategies. In this final post, we further our understanding of dealers’ behavior by looking at their trading pattern within the day.
April 14, 2016
A Peek behind the Curtain of Bank Supervision
Since the financial crisis, bank regulatory and supervisory policies have changed dramatically both in the United States (Dodd-Frank Wall Street Reform and Consumer Protection Act) and abroad (Third Basel Accord).
April 13, 2016
How Does Supervision Affect Banks?
Supervisors monitor banks to assess the banks’ compliance with rules and regulations but also to ensure that they engage in safe and sound practices.
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