181 posts on "Banks"
October 10, 2012
August 8, 2012
The European Debt Crisis and the Dollar Funding Gap
Against the backdrop of the ongoing debt crisis in Europe, the difficulties faced by European banks in borrowing U.S. dollars have attracted increased attention.
Posted at 7:00 am in Banks, Exchange Rates, Fed Funds, International Economics, Liquidity | Permalink | Comments (2)
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.
Posted at 7:02 am in Banks, Financial Institutions, Financial Intermediation, Regulation | Permalink | Comments (1)
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.”
Posted at 9:00 am in Banks, Financial Institutions, Financial Intermediation, Financial Markets, Nonbank (NBFI), Regulation | Permalink
April 4, 2012
Corridors and Floors in Monetary Policy
As part of its prudent planning for future developments, the Federal Open Market Committee (FOMC) has discussed strategies for normalizing the conduct of monetary policy, when appropriate, as the economy strengthens.
January 9, 2012
Cash Assets of Foreign Banks: An Example of Seasonal Adjustment Gone Awry
Federal Reserve Statistical Release H.8 provides aggregate data on the assets and liabilities of commercial banks in the United States
December 21, 2011
Central Bank Imbalances in the Euro Area
The euro area sovereign debt crisis sparked an outflow of bank deposits from countries in the periphery to commercial banks in Germany and other core countries.
Posted at 7:00 am in Banks, Central Bank, Euro Area, Financial Institutions, International Economics | Permalink | Comments (4)
July 11, 2011
Global Banks and Their Internal Capital Markets during the Crisis
As financial markets have become increasingly globalized, banks have developed growing networks of branches and subsidiaries in foreign countries. This expansion of banking across borders is changing the way banks manage their balance sheets, and the ways home markets and foreign markets respond to disturbances to financial markets. Based on our recent research, this post shows how global banks used their foreign affiliates for accessing scarce dollars during the financial crisis—a liquidity strategy that helped transmit shocks internationally while reducing some of the consequences in the stressed locations.
April 13, 2011
Why Did U.S. Branches of Foreign Banks Borrow at the Discount Window during the Crisis?
To help contain the economic damage caused by the recent financial crisis, the Federal Reserve extended large amounts of liquidity to financial firms through traditional lending facilities such as the discount window as well as through newly designed facilities. Recently released Federal Reserve data on discount window borrowing show that some U.S. branches and agencies of foreign banks were among the most active users of the window. In this post, we explain why U.S. branches borrow at the discount window. We also discuss two main reasons why these branches had a large need for dollars during the crisis and how discount window loans to them helped stabilize the financial system and the real economy in the United States.
Posted at 10:00 am in Banks, Fed Funds, Financial Institutions, Monetary Policy | Permalink | Comments (2)
March 30, 2011
Why Do Central Banks Have Discount Windows?
Though not literally a window any longer, the “discount window” refers to the facilities that central banks, acting as lender of last resort, use to provide liquidity to commercial banks. While the need for a discount window and lender of last resort has been debated, the basic rationale for their existence is that circumstances can arise, such as bank runs and panics, when even fundamentally sound banks cannot raise liquidity on short notice. Massive discount window borrowing in the immediate aftermath of the September 11 terrorist attack on the United States clearly illustrates the importance of a discount window even in a modern economy. In this post, we discuss the classical rationale for the discount window, some debate surrounding it, and the challenges that the “stigma” associated with borrowing at the discount window poses for the effectiveness of the discount window.
Posted at 10:03 am in Banks, Central Bank, Financial Institutions, Lender of Last Resort | Permalink
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