Search Results
Journal Article
Gauging the impact of the Great Recession
The Great Recession of 2007?2009, coming on the heels of a spending binge fueled by a housing bubble, so far has resulted in over $7,300 in foregone consumption per person, or about $175 per person per month. The recession has had many costs, including negative impacts on labor and housing markets, and lost government tax revenues. The extensive harm of this episode raises the question of whether policymakers could have done more to avoid the crisis.
Conference Paper
Measuring systemic risk
Conference Paper
The financial crisis and regulatory reform
Journal Article
Fed policy in the financial crisis: arresting the adverse feedback loop
An adverse feedback loop takes hold when a weakening financial system and a slowing economy feed off each other. A crisis or shock curtails lending, hobbling the real economy; the more production and employment falter, the more lending contracts. ; Arresting the adverse feedback loop could prove to be the seminal challenge of early 21st century monetary policymaking. Since sounding the alarm in January 2008, the Fed has taken a series of actions--many unprecedented--to prevent additional damage to financial markets and restore lending activity. These policies have had some success in ...
Journal Article
The financial crisis and inflation expectations
One measure of a successful monetary policy is its ability to anchor expectations about future inflation rates. Financial crises, such as that of 2008?09, can be considered natural experiments that test this anchoring. The effects of the crisis on inflation expectations were largely temporary in the United States, but longer-lasting in the United Kingdom. That is surprising because the United Kingdom had a formal inflation target during this period. Expectations may have been affected more because inflation stayed above the central bank?s target for extended periods following the crisis.
Speech
Bank capital: lessons from the U. S. financial crisis
Remarks by Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, at the Bank for International Settlements Forum on Key Regulatory and Supervisory Issues in a Basel III World, Bank of Korea, Seoul, Korea, February 25, 2013.
Working Paper
Banking and financial crises in United States history: what guidance can history offer policymakers?
This paper assesses the validity of comparisons between the current financial crisis and past crises in the United States. We highlight aspects of two National Banking Era crises (the Panic of 1873 and the Panic of 1907) that are relevant for comparison with the Panic of 2008. In 1873, overinvestment in railroad debt and the default of railroad companies on that debt led to the failure of numerous brokerage houses, precursor to the modern investment bank. During the Panic of 1907, panic-related deposit withdrawals centered on the less regulated trust companies, which had only indirect access ...
Working Paper
The impact of the originate-to-distribute model on banks before and during the financial crisis
The growth of securitization made it easier for banks to sell home mortgage loans that they originated. I explore how mortgage sales affected banks in the years leading up to the financial crisis that began in 2007 and how their pre-crisis mortgage sales affected banks during the crisis. Loan sales are important because most banks sell mortgages as part of the securitization process, but few actually do the securitization. I find that stock returns increase when banks increase sales of mortgages used for refinancing rather than home purchase, suggesting that some banks scale up lending during ...
Journal Article
Not your father’s recovery?
There has been much talk about a disappointing recovery in the wake of the Great Recession?that this time it is much slower. Comparing features of this recovery to past recoveries casts some doubt on that view. The comparison is made using a scaled-down version of the sophisticated and powerful models that real forecasters actually use. Applying it to real GDP growth, unemployment, inflation, and the federal funds rate suggests that the recovery looks consistent with past recoveries?at least so far.