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Journal Article
Credit derivatives: an overview
Arising from financial institutions' need to hedge and diversify credit risk, credit derivatives have now become a major investment tool. Almost all credit derivatives take the form of the credit default swap, which transfers default risk from one party to another. Most credit default swaps were once written on single names, but since 2004 the major impetus to growth and market liquidity has been credit default swaps on indexes. ; This paper examines the mechanics, risks, and market for credit default swaps, provides an overview of pricing and dealers' risk-management role, discusses the ...
Conference Paper
How market value accounting would affect banks
Working Paper
The feasibility of market value accounting for commercial banks
As the severity of the problems facing the federal deposit insurance funds become more obvious, the chorus of support for some form of market value accounting is growing. Proponents cite the benefits of increased disclosure and the discipline such accounting would bring about. Opponents argue that market value accounting is infeasible because it would be too costly and too inaccurate to be worth the effort.
Working Paper
Logit analysis of the effect of rent control on housing quality
Rent control is one of the few policy issues on which there is a general agreement among economists. Economic theory predicts, and few economists have tried to dispute, that imposing rent controls on a housing market is likely to lead to rental housing shortages and general deterioration of quality. Even on income distribution grounds, rent control receives poor reviews, since it is generally agreed to be a clumsy and inexact means of helping the poor.
Working Paper
The effect of second generation rent controls on the quality of rental housing
Microeconomic theory predicts that rent controls will lead to greater housing quality deterioration than would have been the case in an uncontrolled market. However, empirical analyses of rent control have concentrated on income distribution effects. This study tests the hypothesis of quality deterioration using a two period linked sample of dwelling units drawn from eight Standard Metropolitan Statistical Areas, half of which have rent control laws. The results indicate that quality was 7.1% lower in controlled markets in 1974, and 13.5% lower in 1977. Slow, cumulative effects of deferred ...
Working Paper
Legal and regulatory reform in electronic payments: an evaluation of finality of payment rules
Each day approximately $1.3 trillion changes hands by means of wholesale wire transfers. Of this total, about $638 billion is exchanged on Fedwire, the Federal Reserve wire transfer network, while just under $622 billion moves over the privately-owned Clearing House Interbank Payment System (CHIPS). On Fedwire, the average transfer is $2.9 million, while transfers on CHIPS average $4.6 million. With such substantial amounts involved in virtually instantaneous transactions, it is not surprising that concern has risen over risks that a large network network participant will fail to settle its ...
Journal Article
Interstate branch banking