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Working Paper
Durable financial regulation: monitoring financial instruments as a counterpart to regulating financial institutions
Superseded by Working Paper 13-2 ; This paper sets forth a discussion framework for the information requirements of systemic financial regulation. It specifically proposes a large macro-micro database for the U.S. based on an extended version of the Flow of Funds. The author argues that such a database would have been of material value to U.S. regulators in ameliorating the recent financial crisis and will be of aid in understanding the potential vulnerabilities of an innovative financial system in the future. The author also argues that the data should -- under strict confidentiality ...
Journal Article
Time deposits and financial flows
Journal Article
What you don’t know can hurt you: keeping track of risks in the financial system
The financial crisis of 2007-2008 left in its wake new responsibilities for regulators to monitor the economy for risks to financial stability. The new task of monitoring financial stability includes tracking the risks of financial instruments and learning where these risks are located within the financial marketplace. One way to do this is to track the quantities of financial instruments and which institutions hold them. In this article, Leonard Nakamura discusses some limitations of the current data and the current data framework and the extent to which we can use the Flow of Funds for ...
Working Paper
An experimental study of circuit breakers: the effects of mandated market closures and temporary halts on market behavior
This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. The presence of a circuit breaker rule does not affect the magnitude of the absolute deviation in price from fundamental value or trading profit. The primary driver of behavior is information asymmetry in the market. By comparison, trading activity is significantly affected by the presence of a circuit breaker. ...
Working Paper
Durable financial regulation: monitoring financial instruments as a counterpart to regulating financial institutions
This paper sets forth a discussion framework for the information requirements of systemic financial regulation. It specifically describes a potential large macro-micro database for the U.S. based on an extended version of the Flow of Funds. I argue that such a database would have been of material value to U.S. regulators in ameliorating the recent financial crisis and could be of aid in understanding the potential vulnerabilities of an innovative financial system in the future. I also suggest that making these data available to the academic research community, under strict confidentiality ...
Journal Article
Deposits and demographics?
Working Paper
A comparison of the household sector from the Flow of Funds Accounts and the Survey of Consumer Finances
This paper examines selected assets and liabilities from the FFA household sector and from the 1989 and 1992 SCF. SCF and FFA comparisons have proved difficult in the past, and previous research has not fully adjusted for definitional differences between the FFA and the SCF. This analysis addresses common misperceptions about the definitions of the FFA's assets and liabilities and describes the reconciliations between the FFA and SCF measures. The results show that for some asset and liability categories the SCF and FFA estimates are quite close. Measures of liabilities, however, match up ...