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Briefing
Perspectives on the Banking Turmoil of 2023
The banking turmoil of March 2023 was a significant incident in the U.S. financial system that threatened to create a general macroeconomic problem. There were multiple factors at play that explain what happened. In this article, I discuss some of those factors in detail to gain a more complete understanding of why and how the turmoil happened and the way policy addressed it.
Speech
Opening Remarks to Community Bankers Conference, Federal Reserve Bank of New York, New York City
Remarks to Community Bankers Conference, Federal Reserve Bank of New York, New York City.
Discussion Paper
Monetary Policy Transmission and the Size of the Money Market Fund Industry: An Update
The size of the money market fund (MMF) industry co-moves with the monetary policy cycle. In a post published in 2019, we showed that this co-movement is likely due to the stronger response of MMF yields to monetary policy tightening relative to bank deposit rates, combined with MMF shares and bank deposits being close substitutes from an investor’s perspective. In this post, we update the analysis and zoom in to the current monetary policy tightening by the Federal Reserve.
Working Paper
Short Selling and Bank Deposit Flows
Some observers have argued that the short selling of bank stock contributes to bank runs and bank failures. Previously, no evidence has been available. We find no evidence that more short selling of bank stock is associated with materially larger outflows of bank deposits. We believe this means that proposals to restrict the short selling of bank stock should be supported by other arguments.
Working Paper
Short Selling and Bank Deposit Flows
Some observers have argued that the short selling of bank stock contributes to bank runs and bank failures. Previously, no evidence has been available. We find no evidence that more short selling of bank stock is associated with materially larger outflows of bank deposits. We believe this means that proposals to restrict the short selling of bank stock should be supported by other arguments.