What Happens When Regulatory Capital Is Marked to Market?
Minimum equity capital requirements are a key part of bank regulation. But there is little agreement about the right way to measure regulatory capital. One of the key debates is the extent to which capital ratios should be based on current market values rather than historical “accrual” values of assets and liabilities. In a new research paper, we investigate the effects of a recent regulatory change that ties regulatory capital directly to the market value of the securities portfolio for some banks.
Available for Sale? Understanding Bank Securities Portfolios
It’s natural to think of banks as intermediaries that take in deposits and use them to make loans to businesses and individuals.
New York City’s Economic Recovery—Main Street Gets the Jump on Wall Street
After bottoming out in late 2009, New York City’s economy has been on the road to recovery. In this post, we call attention to an unprecedented feature of the current economic recovery: overall employment in the city began to rebound from the recession well before Wall Street started adding jobs. We also consider some questions that this development naturally raises: What took Wall Street employment so long to recover? What’s been driving job generation on Main Street? What does the recent pickup in Wall Street employment suggest about the outlook for the city’s economy?