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Journal Article
Economic History: The Bank War
In his July 1832 veto message of the bill rechartering the Second Bank of the United States, President Andrew Jackson didn't hold back. Beyond characterizing the bank as hopelessly corrupt, he argued "the powers conferred upon [the bank were] ... not only unnecessary, but dangerous to the Government and the country." He went on, warning that if it continued to operate, "great evils... might flow from such a concentration of power in the hands of a few men irresponsible to the people." He argued that its power would only grow, as its leaders could "put forth their strength to influence ...
Speech
The Federal Reserve’s Pandemic Response
Remarks at Union of Arab Banks Webinar: Global Banking in Light of COVID-19 and Geopolitical Development (delivered via videoconference).
Speech
What the Moment Demands
Mary C. Daly, President and Chief Executive Officer, Federal Reserve Bank of San Francisco, 33rd Frankfurt European Banking Congress, Frankfurt, Germany, November 17, 2023, 3:30 PM CET (local), 6:30 AM PST
Speech
Interview With St. Louis Fed President James Bullard, Wall Street Journal
Federal Reserve Bank of St. Louis President James Bullard in an interview with Michael S. Derby of The Wall Street Journal laid out his optimism for the U.S. economy’s outlook and why he doesn’t see the same need for additional fiscal support from the government for the economy as his central bank colleagues. Mr. Bullard in the interview Monday also discussed how he thinks the Federal Reserve will handle policy over the near term, while flagging the economy’s ability to adapt during the coronavirus pandemic. The following transcript has been lightly edited for content and clarity.
Report
An investigation of the gains from commitment in monetary policy
This paper proposes a simple framework for analyzing a continuum of monetary policy rules characterized by differing degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary policy authority is assumed to formulate optimal commitment plans, to be tempted to renege on them, and to succumb to this temptation with a constant exogenous probability known to the private sector. By interpreting this probability as a continuous measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect ...
Report
Dealer financial conditions and lender-of-last resort facilities
We examine the financial conditions of dealers that participated in two of the Federal Reserve?s lender-of-last-resort (LOLR) facilities--the Term Securities Lending Facility (TSLF) and the Primary Dealer Credit Facility (PDCF)--that provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to borrowing from the facilities were more likely to participate in the programs, borrow more, and--in the case of the TSLF--at higher bidding rates. Dealers with less liquid collateral on their balance sheets before the facilities were ...
Discussion Paper
Which Dealers Borrowed from the Fed’s Lender-of-Last-Resort Facilities?
During the 2007-08 financial crisis, the Fed established lending facilities designed to improve market functioning by providing liquidity to nondepository financial institutions—the first lending targeted to this group since the 1930s. What was the financial condition of the dealers that borrowed from these facilities? Were they healthy institutions behaving opportunistically or were they genuinely distressed? In published research, we find that dealers in a weaker financial condition were more likely to participate than healthier ones and tended to borrow more. Our findings reinforce the ...
Journal Article
Forward-Looking Policy in a Real-Time World
Restoring price stability is a key part of the Fed’s mandate, and it is what the American people expect. Achieving it will take time and a broad view of economic conditions. Policymakers have to respond to an economy that is evolving in real time and prepare for what the economy will look like in the future. The following is adapted from remarks by the president of the Federal Reserve Bank of San Francisco to Griswold Center for Economic Policy Studies at Princeton University on March 4.
Speech
Forward-Looking Policy in a Real-Time World
Remarks delivered at Griswold Center for Economic Policy Studies, Princeton University, Princeton, New Jersey, March 4, 2023, by Mary C. Daly, President and Chief Executive Officer, Federal Reserve Bank of San Francisco.
Journal Article
The political origins of Section 13(3) of the Federal Reserve Act
At the height of the financial crisis of 2007-09, the Federal Reserve conducted emergency lending under authority granted to it in the third paragraph of Section 13 of the Federal Reserve Act. This article explores the political and legislative origins of the section, focusing on why Congress chose to endow the central bank with such an authority. The author describes how in the initial passage of the act in 1913, Congress demonstrated its steadfast commitment to the ?real bills? doctrine in two interrelated ways: 1) by limiting what assets the Fed could purchase, discount, and use as ...