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Intermediary Asset Pricing during the National Banking Era
Financial intermediary balance sheets matter for asset returns even when these intermediaries do not directly participate in the relevant asset markets. During the National Banking Era, liquidity conditions for the New York Clearinghouse (NYCH) banks forecast excess returns for stocks, bonds, and currencies. The NYCH banks had little to no direct participation in these markets; their main link to these markets was through securities financing. Liquidity conditions affect asset prices through the credit growth of the NYCH banks, which shapes marginal investors' discount rates. I use ...
Short-Term Funding Stresses and Asset Prices: Lessons from U.S. History
Recent stress episodes in U.S. short-term dollar funding markets have brought renewed attention to the functioning of these markets and how they interact with capital markets more generally. The history of U.S. money markets and stock and bond markets before the founding of the Federal Reserve offer a unique perspective on how the structure of money markets can contribute to broader asset price fluctuations.
Foreign Portfolio Investment When the United States was an Emerging Market
In this note, we analyze two surveys occurring in 1853 and 1869 and compare the patterns of foreign ownership then to foreign portfolio investment in the present-day United States.