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Keywords:Systemic risk 

Working Paper
Systemic Risk, International Regulation, and the Limits of Coordination

This paper examines the incentives of national regulators to coordinate regulatory policies in the presence of systemic risk in global financial markets. In a two-country and three-period model, correlated asset fire sales by banks generate systemic risk across national financial markets. Relaxing regulatory standards in one country increases both the cost and the severity of crises for both countries in this framework. In the absence of coordination, independent regulators choose inefficiently low levels of macro-prudential regulation. A central regulator internalizes the systemic risk and ...
Finance and Economics Discussion Series , Paper 2013-87

Speech
Regulatory reform: lessons from the front line, 19th Annual Hyman P. Minsky Conference on the State of the U. S. and World Economies Organized by the Levy Economic Institute of Bard College, New York, New York, April 14, 2010

In a speech at the Minsky Conference on the State of the U.S. and World Economies, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto discussed consolidated supervision, an important, but sometimes overlooked, aspect of regulatory reform. She also described the criteria that she thinks should be used to define systemically important institutions and discussed a framework for ensuring financial firms are effectively supervised based on the risk they pose to the financial system. She concluded with an explanation of why it is vitally important for the Federal Reserve to remain ...
Speech , Paper 28

Speech
A new era of bank supervision

Remarks at the New York Bankers Association Financial Services Forum, New York City.
Speech , Paper 65

Working Paper
Do bank bailouts reduce or increase systemic risk? the effects of TARP on financial system stability

Theory suggests that bank bailouts may either reduce or increase systemic risk. This paper is the first to address this issue empirically, analyzing the U.S. Troubled Assets Relief Program (TARP). Difference-in-difference analysis suggests that TARP significantly reduced contributions to systemic risk, particularly for larger and safer banks located in better local economies. This occurred primarily through a capital cushion channel. {{p}} Results are robust to additional tests, including accounting for potential endogeneity and selection bias. Findings yield policy conclusions about the ...
Research Working Paper , Paper RWP 16-8

Speech
Plosser defines key issues in financial reform : remarks to the Joint Economic Committee Staff Meeting, U.S. Congress, May 5, 2010.

In remarks at a meeting of the Joint Economic Committee, President Charles I. Plosser discussed the importance of implementing regulatory changes that would help to avert financial crises in the future.
Speech , Paper 38

Working Paper
Systemic risk contributions

We adopt a systemic risk indicator measured by the price of insurance against systemic financial distress and assess individual banks' marginal contributions to the systemic risk. The methodology is applied using publicly available data to the 19 bank holding companies covered by the U.S. Supervisory Capital Assessment Program (SCAP), with the systemic risk indicator peaking around $1.1 trillion in March 2009. Our systemic risk contribution measure shows interesting similarity to and divergence from the SCAP expected loss measure. In general, we find that a bank's contribution to the systemic ...
Finance and Economics Discussion Series , Paper 2011-08

Speech
Steps toward a new financial regulatory architecture, speech presented on Ohio Bankers' Day, Columbus, Ohio April 1, 2009

President Pianalto discusses the economic outlook and the Federal Reserve?s recent actions, commenting on changes to the financial regulatory system. She makes the case for a new framework for categorizing financial institutions based on the degree of risk they pose to the financial system, adding her endorsement to what some have called macroprudential supervision.
Speech , Paper 22

Working Paper
Backtesting Systemic Risk Measures During Historical Bank Runs

The measurement of systemic risk is at the forefront of economists and policymakers concerns in the wake of the 2008 financial crisis. What exactly are we measuring and do any of the proposed measures perform well outside the context of the recent financial crisis? One way to address these questions is to take backtesting seriously and evaluate how useful the recently proposed measures are when applied to historical crises. Ideally, one would like to look at the pre-FDIC era for a broad enough sample of financial panics to confidently assess the robustness of systemic risk measures but ...
Working Paper Series , Paper WP-2015-9

Working Paper
The Shift from Active to Passive Investing : Potential Risks to Financial Stability?

The past couple of decades have seen a significant shift in assets from active to passive investment strategies. We examine the potential effects of this shift for financial stability through four different channels: (1) effects on investment funds? liquidity transformation and redemption risks; (2) passive strategies that amplify market volatility; (3) increases in asset-management industry concentration; and (4) the effects on valuations, volatility, and comovement of assets that are included in indexes. Overall, the shift from active to passive investment strategies appears to be ...
Finance and Economics Discussion Series , Paper 2018-060

Working Paper
Caught between Scylla and Charybdis? Regulating bank leverage when there is rent seeking and risk shifting

Banks face two moral hazard problems: asset substitution by shareholders (e.g., making risky, negative net present value loans) and managerial rent seeking (e.g., investing in inefficient ?pet? projects or simply being lazy and uninnovative). The privately-optimal level of bank leverage is neither too low nor too high: It balances effi ciently the market discipline imposed by owners of risky debt on managerial rent-seeking against the asset-substitution induced at high levels of leverage. However, when correlated bank failures can impose significant social costs, regulators may bail out bank ...
Working Papers (Old Series) , Paper 1024

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Rosengren, Eric S. 8 items

Dudley, William 7 items

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