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Who Benefited from the Paycheck Protection Program? Our Texas Analysis Offers an Early Look
Though many hail the Paycheck Protection Program as a historic lifeline for the economy, others have raised concerns that the program reinforces inequities and has led to loan approvals not in alignment with its mission.
Hard-Hit Child Care Industry May Need Multisector Response to Revive and Thrive
Millions of U.S. workers have lost their jobs during the pandemic. When they are ready to return to work, their child care options may be few.
How PPP Loans Eluded Small Businesses of Color
Using national- and state-representative data from small business owners from the Federal Reserve System’s Small Business Credit Survey, we found that small business owners of color were in greater need of financial support than their white-owned counterparts, but they successfully accessed the PPP less frequently.
Working Paper
The Importance of Technology in Banking during a Crisis
What are the implications of information technology (IT) in banking for financial stability? Data on US banks' IT equipment and the background of their executives reveals that higher pre-crisis IT adoption led to fewer non-performing loans and more lending during the global financial crisis. Empirical evidence indicates a direct role of IT adoption in strengthening bank resilience; this includes instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis shows that high-IT banks originated mortgages with better performance, indicating better ...
Working Paper
Welfare Implications of Asset Pricing Facts: Should Central Banks Fill Gaps or Remove Volatility?
More than 20 years of financial market data suggest a term structure of the welfare cost of economic uncertainty that is downward-sloping on average, especially during downturns. This evidence offers guidance in selecting a model to study the benefits of macroeconomic stabilization from a structural perspective. The addition of nonlinear external habit formation to a textbook monetary model can rationalize the evidence. The model is observationally equivalent in its quantity implications to a standard New Keynesian model with CRRA utility, but the optimal policy prescription is overturned. In ...
Women Veteran Business Owners: We Want to Hear From You
Women veteran-owned small businesses are an important part of our regional economy, but little is known about their needs and challenges.
COVID-19 and CRA: Fed Issues Guidance on Helping Communities Through the Crisis
To help support economic resiliency, we are providing Community Reinvestment Act (CRA) consideration for banking and lending activities in response to COVID-19.
Material Hardship and the CARES Act: Experiences of American Families
How did households use the aid provided by the CARES Act? Who had trouble accessing benefits? And in a polarized political climate, what did Americans think about the way the expanded safety net was offered—for themselves and their communities?
Discussion Paper
Bank Capital and Risk: Cautionary or Precautionary?
Do riskier banks have more capital? Banking companies with more equity capital are better protected against failure, all else equal, because they can absorb more losses before becoming insolvent. As a result, banks with riskier income and assets would hopefully choose to fund themselves with relatively more equity and less debt, giving them a larger equity cushion against potential losses. In this post, we use a top-down stress test model of the U.S. banking system?the Capital and Loss Assessment under Stress Scenarios (CLASS) model?to assess whether banks that are forecast to lose capital in ...
The Federal Reserve Is Updating the Community Reinvestment Act. Here’s How You Can Help.
Whether you are a community-service organization member, an economic development professional or simply interested in helping communities in our region thrive, your comments and ideas are a critical part of ensuring an inclusive financial services industry.