Tax and spending incentives and enterprise zones
Firm-specific incentives and enterprise zones are the two most rapidly growing weapons in states' and localities' competitive arsenal. What incentives have states and localities adopted, which of these incentives are spreading, and what are the prominent successes and failures? What has been the experience with "clawback" provisions, assurances from recipients that they will actually create the jobs and other economic benefits they promise?
Reflections on the economic outlook and the implications for monetary policy
Remarks at Fordham Wall Street Council, Fordham University Graduate School of Business, New York City.
Dollar asset markets: prospects after the crisis
Remarks at the ACI 2010 World Congress, Sydney, Australia.
The Federal Reserve's liquidity facilities
Remarks at the Vanderbilt University Conference on Financial Markets and Financial Policy Honoring Dewey Daane, Nashville, Tennessee.
Opening remarks at The Spread between Primary and Secondary Mortgage Rates: Recent Trends and Prospects Workshop
Remarks at The Spread between Primary and Secondary Mortgage Rates: Recent Trends and Prospects Workshop, New York City.
Did affordable housing legislation contribute to the subprime securities boom?
No. In this paper we use a regression discontinuity approach to investigate whether affordable housing policies influenced origination or affected prices of subprime mortgages. We use merged loan-level data on non-prime securitized mortgages with individual- and neighborhood-level data for California and Florida. We find no evidence that lenders increased subprime originations or altered pricing around the discrete eligibility cutoffs for the Government Sponsored Enterprises (GSEs) affordable housing goals or the Community Reinvestment Act. Our results indicate that the extensive purchases of ...
Is the Federal Home Loan Bank system good for banks? a look at evidence on membership, advances and risk
Since the early 1990s, commercial banks have turned to Federal Home Loan Bank (FHLBank) advances to plug the gap between loan and deposit growth. Is this trend worrisome? On the one hand, advances implicitly encourage risk by insulating borrowers from market discipline. On the other, advances give borrowers greater flexibility to managing interest rate and liquidity risk. And access to FHLBank funding encourages members to reshape their balance sheets in ways that could lower credit risk. Using quarterly financial and supervisory data for banks from 1992 to 2000, we assess the effect of ...
Executive compensation at Fannie Mae and Freddie Mac
Corporate governance-and executive-compensation arrangements in particular-should be an important component of the agenda to reform the housing GSEs. The GSEs' safety-and-soundness regulator-who is essentially the debtholders' and taxpayers' representative-must be admitted to the GSEs' boardroom in a way that is atypical of an ordinary publicly held company. This intrusion into the board's oversight of executive-compensation plans is justified given the GSEs' public purposes and their large potential cost to taxpayers. Prudent public policy requires greater supervisory control over executive ...
Conjectural guarantees loom large: evidence from the stock returns of Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac are government sponsored enterprises (GSEs) with publicly traded equity. Although these companies hold government issued charters, their securities are not legally backed by the full faith and credit of the United States government. Yet, investors and rating agencies seem to believe that the U.S. Government would "bail out" Fannie or Freddie if they became distressed. We provide evidence of a conjectural guarantee in GSE stock returns. Stock that contains an option on returning the shares at a given price to the issuer -- the government, in this case -- show ...
The GSEs: where do we stand?
a speech to the Chartered Financial Analysts of St. Louis, St. Louis, Jan. 17, 2007