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Journal Article
Tools (Lessons and Strategies) Toward Market Restoration: A Conference Summary
Community development post-recession takes place in an environment that is greatly changed in terms of both demand for and capacity to deliver services. While no community was immune, the places that were most deeply affected by the Great Recession ? and continue to feel its effects ? are often those places that had suffered from disinvestment for decades leading up to it. The tools and strategies that have been developed and relied on by investors, practitioners and advocates ? in some cases for decades ? need to be adapted to the changes, while continuing to meet ever growing demand.
Speech
Welcoming Remarks: Thirteenth Annual International Banking Conference
Welcoming remarks delivered by Charles Evans before the Thirteenth Annual International Banking Conference on September 23, 2010, in Chicago, IL.
Report
CDS and equity market reactions to stock issuances in the U.S. financial industry: evidence from the 2002-13 period
We study seasoned equity issuances by financial and nonfinancial companies between 2002 and 2013. To assess the risk and valuation implications of these issuances, we conduct an event-study analysis using daily credit default swap (CDS) and stock market pricing data. The major findings of the paper are that equity prices do not react to new issues in the pre-crisis period, but react negatively in the crisis. CDS prices respond to new, default-relevant information. Over the full sample period, cumulative abnormal CDS spreads drop in response to equity issuance announcements. The reactions are ...
Briefing
Essentiality of Money: A Historical Perspective
In this article, I explore the historical development of the concept of essentiality of money, as well as monetary theory more broadly. I begin by introducing the concept of money and its role in facilitating economic activity. I delve into the evolution of monetary theory, starting with the classical theory and the marginal revolution and moving to the division between microeconomics and macroeconomics. Then I discuss the microfoundation revolution in macroeconomics and the debate over the essentiality of money. Finally, I examine the New Keynesian School (which uses reduced-form tools to ...
Discussion Paper
How Does Market Power Affect Fire-Sale Externalities?
An important role of capital and liquidity regulations for financial institutions is to counteract inefficiencies associated with “fire-sale externalities,” such as the tendency of institutions to lever up and hold illiquid assets to the extent that their collective actions increase financial vulnerabilities. However, theoretical models that study such externalities commonly assume perfect competition among financial institutions, in spite of high (and increasing) financial sector concentration. In this post, which is based on our forthcoming article, we consider instead how the effects ...
Working Paper
Did life insurers benefit from TARP or regulatory forbearance during the financial crisis of 2008–2009?
Life insurers? odds of being placed under regulatory control (for example, conservatorship or receivership) during the financial crisis years of 2008 and 2009 increased with deteriorating fundamentals at a much higher rate than during normal times or during the previous recession. However, no life insurer in the sample belonging to a life insurance holding company system (LIHCS) in receipt of TARP funds experienced such insolvency issues, and life insurers with poor and deteriorating performance that belonged to a LIHCS in receipt of TARP funds received increased capital inflows during the ...
Speech
Keynote Remarks
Remarks at the Union of Arab Banks' Conference on Anti-Bribery Corruption, the Sixth European Union Anti-Money Laundering Directive, and the Anti-Money Laundering Act of 2020 (delivered via videoconference).
Journal Article
Policy Update: Will Chevron Keep its Stripes?
Following the will of Congress is often a complicated endeavor for regulators, especially when lawmakers leave aspects of a regulatory law unclear. That uncertainty often leads to litigation. But how should courts determine if an administrative agency has gone outside the bounds of the law when designing regulations? This is an important question for regulators, like the Fed, that have been charged with implementing laws passed by Congress.In the 1984 landmark case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. the Supreme Court established a process to determine ...
Speech
537 Days: Time Is Still Ticking
Remarks at LIBOR: Entering the Endgame (a webinar hosted by the Bank of England and the New York Fed) .
Journal Article
U.S. Treasury's ETA Brings Banking to the Unbanked
Six of the nation's largest banks have joined the growing list of financial institutions participating in the U.S. Treasury's Electronic Transfer Account program, an innovative service proving popular among both consumers and businesses.