The LIBOR-OIS spread as a summary indicator
The Global Pandemic and Run on Shadow Banks
In March, the global coronavirus pandemic led to a period of financial stress in which credit conditions tightened at an unprecedented pace. Elements of this stress period can be explained as a classic run on “shadow banks”—nonbank financial institutions that fund long-term assets with short-term debt. Although timely Federal Reserve interventions restored some calm to markets, shadow banks remain vulnerable to future runs because they lack the safeguards available to regulated depository institutions.
The microfinance revolution: an overview
The Nobel Prize committee awarded the 2006 Nobel Peace Prize to Muhammad Yunus and the Grameen Bank "for their efforts to create economic and social development from below." The microfinance revolution has come a long way since Yunus first provided financing to the poor in Bangladesh. The committee has recognized microfinance as "an important liberating force" and an "ever more important instrument in the struggle against poverty." Although several authors have provided comprehensive surveys of microfinance, our aim is somewhat more modest: This article is intended as a ...
Why HARM the subprime borrower?
Hybrid adjustable rate mortgages (HARM) were designed to be refinanced by the reset date, when the interest rate would jump. These mortgages worked out well for many people who were credit risks - but only as long as housing prices continued to rise.
Changes in the mortgage market since the crisis
It appears that mortgage origination and securitization is currently ?in limbo?: Private securitization has all but disappeared and is being absorbed by government- sponsored enterprises
Home equity and household income
During 1995-2007, home equity increased more than gross income for high-, low- and middle-income groups.
Alt-A: the forgotten segment of the mortgage market
This study presents a brief overview of the Alt-A mortgage market with the goal of outlining broad trends in the different borrower and mortgage characteristics of Alt-A market originations between 2000 and 2006. The paper also documents the default patterns of Alt-A mortgages in terms of the various borrower and mortgage characteristics over this period.
Home prices: a case for cautious optimism
Many analysts are cautiously optimistic that the house price decline has ended, citing that house prices increased in June and July. There are several reasons for being cautious.
Emerging markets: a source of and destination for capital
Increasingly, emerging markets are becoming a source of growth in the global economy. For example, foreign direct investment both into and out of these countries has shown a phenomenal increase since 2000.
Global European banks and the financial crisis
This paper reviews some of the recent studies on international capital flows with a focus on the role of European global banks. It presents a revision to the commonly held ?global saving glut? view that East Asian economies (along with oil-rich nations) were the dominant suppliers of capital that fueled the asset price boom in many parts of the world in the early 2000s. It argues that the role of funding costs and a ?liberal? regulatory regime that allowed for an unprecedented expansion of the balance sheets of European banks was no less important. Finally, we describe the aftermath of the ...