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Conference Paper
Bank lending and the transmission of monetary policy
Conference Paper
Crunching the recovery: bank capital and the role of bank credit
Report
Global standards for liquidity regulation
Liquidity risk has received increased attention recently, especially in light of the 2007 - 2009 financial crisis, when banks' extensive reliance on short-term funding, maturity mismatches between assets and liabilities, and insufficient liquidity buffers made them quite susceptible to liquidity risk. To mitigate such risk, the Basel Committee on Banking Supervision (BCBS) introduced an improved global capital framework and new global liquidity standards for banks in December 2010 in the form of the new Basel Accord (Basel III). This brief offers insights from the crisis experience, ...
Report
Credit supply disruptions: from credit crunches to financial crisis
Events that transpired during the recent financial crisis highlight the important role that financial intermediaries still play in the economy, especially during economic downturns. While the breadth and severity of the financial crisis took most observers by surprise, it has renewed academic interest in understanding the effects on the real economy of both financial shocks and the changing nature of financial intermediation. This interest in the real effects of financial shocks highlights a literature that began more than 20 years ago associated with the bank credit crunch of the early ...
Journal Article
A call to ARMs: adjustable rate mortgages in the 1980s
Adjustable rate mortgages, long-term loans that provide for interest rate changes at regular intervals over their lifetimes, have recently become a major source of residential mortgage financing in this country. Today adjustable rate mortgages probably account for close to 25 percent of total home mortgage debt. ; While adjustable rate mortgages (ARMs) have grown to be an important factor in mortgage lending, their variety and complexity have led to confusion. This article discusses their advantages and disadvantages to both borrowers and lenders, and highlights the nature of the risks ...
Journal Article
A real, affordable mortgage
Homeownership has long been a cherished American goal, but many now find that homeownership is no longer possible. The median household income of potential first-time homebuyers is now estimated to be only three-quarters that required to afford the median-priced starter home. As a consequence, the 1980s was the first decade since the Great Depression during which the aggregate homeownership rate fell. ; The Price Level Adjusted Mortgage (PLAM) represents a genuine and substantial advance in housing finance in an inflationary environment. PLAMs rearrange the timing of the mortgage payments so ...
Journal Article
Business failures in New England
During the 1980s, the New England economy prospered relative to the nation as a whole, with lower unemployment rates, more rapidly rising real estate prices, and lower rates of business failures. As the economic tide turned against New England at the end of the decade, the rate of business failures soared, in absolute terms as well as relative to nationwide statistics. This recent wave of business failures appears to have been far in excess of that attributable to the decline in New England economic activity. Moreoever, it has undesirable implications for the regional economy and can be ...