Journal Article
Does the TIPS spread overshoot?
Schmid, Frank A. (2003-12)
Monetary Trends , Issue Dec

Journal Article
Asset mispricing, arbitrage, and volatility
Schmid, Frank A.; Emmons, William R. (2002-11)
Market efficiency remains a contentious topic among financial economists. The theoretical case for efficient markets rests on the notion of risk-free, cost-free arbitrage. In real markets, however, arbitrage is not risk-free or cost-free. In addition, the number of informed arbitrageurs and the supply of financial resources they have to invest in arbitrage strategies is limited. This article builds on an important recent model of arbitrage by professional traders who need?but lack?wealth of their own to trade. Professional abitrageurs must convince wealthy but uninformed investors to entrust ...
Review , Volume 84 , Issue Nov

Journal Article
Monetary policy actions, macroeconomic data releases, and inflation expectations
Schmid, Frank A.; Kliesen, Kevin L. (2004-05)
This article analyzes how announced surprises in monetary policy actions and macroeconomic data releases affect the average rate of inflation that economic agents expect to prevail over the 10-year period following the surprise. The analysis also addresses the effect of Federal Reserve communication and surprises in monetary policy actions on perceived inflation risk over this 10-year period. The study shows that surprises in macroeconomic data releases and monetary policy actions indeed affect the expected rate of inflation. Further, there is evidence that surprises in monetary policy ...
Review , Volume 86 , Issue May , Pages 9-22

Journal Article
Credit unions and the common bond
Schmid, Frank A.; Emmons, William R. (1999-09)
A distinguishing feature of credit unions is the legal requirement that members share a common bond. This organizing principle recently became the focus of national attention when the Supreme Court and the U.S. Congress took opposite sides in a controversy regarding the number of common bonds (fields of membership) that could coexist within a single credit union. In this article, Emmons and Schmid develop and simulate a model of credit-union formation and consolidation to examine the effects of common-bond restrictions on the performance of credit unions. The performance measures are ...
Review , Volume 81 , Issue Sep , Pages 41-64

Working Paper
Banks vs. credit unions: dynamic competition in local markets
Schmid, Frank A.; Emmons, William R. (2002)
One interesting aspect of the financial services industry is that for-profit institutions such as commercial banks compete directly with not-for-profit financial intermediaries such as credit unions. In this article, we analyze competition among banks and between banks and credit unions using a dynamic model of spatial competition. The model allows for the co-existence of (for-profit) banks and (not-for-profit) credit unions. Using annual county-level data on banking market concentration and credit-union participation rates for the period 1989-96, we find empirical evidence of two-way ...
Supervisory Policy Analysis Working Papers , Paper 2002-10

Journal Article
Membership structure, competition, and occupational credit union deposit rates
Schmid, Frank A.; Emmons, William R. (2001-01)
How do occupational credit unions set deposit rates? This article shows that the answer to this question will depend on (i) who actually makes business decisions in credit unions (who is in control), and (ii) whether local deposit market competition is important. It is not obvious who controls occupational credit unions. If the sponsor (the employer) is in control, then loans and deposits are priced to maximize the surplus received by all of the credit union?s current and potential members (those eligible to join). If members are in control, then a group of members with a majority can ...
Review , Volume 83 , Issue Jan , Pages 41-50

Journal Article
Voting rights, private benefits, and takeovers
Schmid, Frank A. (2002-01)
This article analyzes the effects that institutional design of the firm has on the allocation of control over the firm?s assets. The efficient allocation of control is a necessary condition for the optimal allocation of resources. Dynamic efficiency in resource allocation presupposes that control over firms will change hands when a given allocation becomes suboptimal.> Typically, changes in control are brought about through (successful) tender offers or block trades. With regard to takeovers, a firm may have two types of value to consider: First, there is the public value of the firm, which ...
Review , Volume 84 , Issue Jan. , Pages 35-46

Journal Article
Bank competition and concentration: do credit unions matter?
Schmid, Frank A.; Emmons, William R. (2000-05)
One interesting aspect of the financial services industry is that for-profit institutions, such as commercial banks, compete directly with not-for-profit financial intermediaries, such as credit unions. In this article, William R. Emmons and Frank A. Schmid analyze the competition between banks and credit unions. Using annual county-level data on banking-market concentration and household participation rates at occupational credit unions for the period between 1989 and 1996, the authors find empirical evidence of two-way competitive interactions between banks and credit unions.
Review , Volume 82 , Issue May

Journal Article
The Tobin tax
Schmid, Frank A. (2001-11)
International Economic Trends , Issue Nov

Journal Article
Credit unions make friends-but not with bankers
Schmid, Frank A.; Emmons, William R. (2003-10)
Unable to slow the growth of credit unions by protesting their tax breaks and sponsor subsidies, banks are citing other reasons to bolster their case that the competition has an unfair edge.
The Regional Economist , Issue Oct , Pages 4-9