Worker Flows in Banking Regulation
In the aftermath of the 2008 financial crisis, job transitions of personnel in banking supervision and regulation between the public and private sectors—often labeled the revolving door—have come under intense scrutiny and have been blamed by certain economists (Johnson and Kwak), legal scholars (John Coffee in the Financial Times), and policymakers (Dodd-Frank Act of 2010, Section 968) for distorting regulators’ actions in favor of banks.
How Liquidity Standards Can Improve Lending of Last Resort Policies
Prior to the Great Recession, the focus of bank regulation was on bank capital with little consensus about the need for liquidity regulation.
Liquidity Policies and Systemic Risk
One of the most innovative and potentially far-reaching consequences of regulatory reform since the financial crisis has been the development of liquidity regulations for the banking system.
The Liquidity Stress Ratio: Measuring Liquidity Mismatch on Banks’ Balance Sheets
Liquidity transformation—funding longer-term assets with short-term liabilities—is one of the main functions that banks provide. However, this liquidity mismatch exposes banks to liquidity risk.
A New Idea on Bank Capital
How does any firm decide on its capital structure – how much equity (capital) to use, how much debt?
Parting Reflections on the Series on Large and Complex Banks
The motivation for the Economic Policy Review series was to understand better the behavior of large and complex banks, and we have covered a lot of ground toward that end.
Resolution of Failed Banks
During the recent crisis, some of the largest and most prominent financial institutions failed or nearly failed, requiring extraordinary intervention from regulators, such as extended access to lender-of-last-resort facilities, debt and deposit guarantees, and injection of capital to mitigate systemic risk.
Measuring Global Bank Complexity
Paraphrasing a famous Supreme Court opinion: “I know bank complexity when I see it.”
The Growth of Murky Finance
Building upon previous posts in this series that discussed individual banks, we examine the historical growth of the entire financial sector, relative to the rest of the economy.
On the Design of Monetary and Macroprudential Policies
The financial crisis, recession, and slow recovery have emphasized the interactions between financial markets and the real economy.