Preparing for a smooth (eventual) exit
Remarks at the National Association for Business Economics Policy Conference, Arlington, Virginia
The implementation of current asset purchases
Remarks at the Forecasters Club of New York, New York City.
Managing the Federal Reserve's balance sheet
Remarks at 2010 CFA Institute Fixed Income Management Conference, Newport Beach, California.
Lessons learned from the financial crisis
Remarks at the Eighth Annual BIS Conference, Basel, Switzerland.
Asset bubbles and the implications for central bank policy
Remarks at The Economic Club of New York, New York City.
Remarks on the role of central bank interactions with financial markets
Remarks at New York University's Stern School of Business, New York City.
Federal Reserve lending disclosure
Testimony of Thomas C. Baxter, Jr., and Scott G. Alvarez, General Counsel of the Board of Governors, before the Subcommittee on Domestic Monetary Policy and Technology, Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
Financial intermediation, asset prices, and macroeconomic dynamics
Fluctuations in the aggregate balance sheets of financial intermediaries provide a window on the joint determination of asset prices and macroeconomic aggregates. We document that financial intermediary balance sheets contain strong predictive power for future excess returns on a broad set of equity, corporate, and Treasury bond portfolios. We also show that the same intermediary variables that predict excess returns forecast real economic activity and various measures of inflation. Our findings point to the importance of financing frictions in macroeconomic dynamics and provide quantitative ...
Financial amplification mechanisms and the Federal Reserve's supply of liquidity during the crisis
The small decline in the value of mortgage-related assets relative to the large total losses associated with the financial crisis suggests the presence of financial amplification mechanisms, which allow relatively small shocks to propagate through the financial system. We review the literature on financial amplification mechanisms and discuss the Federal Reserve's interventions during different stages of the crisis in light of this literature. We interpret the Fed's early-stage liquidity programs as working to dampen balance sheet amplifications arising from the positive feedback between ...
Dodd-Frank one year on: implications for shadow banking
One year after passage of the Dodd-Frank Act (DFA), regulators proposed several of the rules required for its implementation. In this paper, I discuss some aspects of proposed DFA rules in light of shadow banking. The topics are risk-retention rules for securitized products and the impact of capital reforms on asset-backed commercial paper (ABCP) conduits. While the reform of securitization is resulting primarily from DFA, changes in accounting standards, together with the Basel capital reforms, have had important impacts on the economics of ABCP conduits.