A visualization of the efforts of the US Treasury to "save" the US financial system and the "too big to fail" firms like Citi, AIG and Bank of America.
Dia de los Muertos is a holiday celebrated in Mexico and parts of Latin America that honors deceased loved ones. The document contains three quotes related to themes of haunting, mystery, and the brain having corridors that can be haunted like a house. It explores ideas around remembering and honoring the dead through poetry and descriptions of the moonlight.
From measuring production to measuring well-beingcatelong
What we measure affects what we do; and if our measurements are flawed, decisions may be distorted.
Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance.
So too, we often draw inferences about what are
good policies by looking at what policies have promoted economic growth; but if our metrics of performance are flawed, so too may be the inferences that we draw.
The document lists various things one can do with the remainder of 2009, including practicing a new sport, accepting new challenges, learning another language, making new friends, dreaming, updating one's wardrobe, laughing and smiling, kissing meaningfully, relaxing after work, and achieving at least one goal before the end of the year.
Mad meat! how securitized lending collapsed the financial systemcatelong
The document tells a parable about the financial crisis through the metaphor of a fictional nation called the Users of Sporks Archipelago (USA). In the USA, different islands specialized in different types of meat production. Over time, risky financial products like securitized loans and derivatives were developed, guaranteed by the government, and exported globally, ultimately collapsing the entire financial system. The parable critiques how politics, deregulation, conflicts of interest, and risky innovation led to the crisis.
US Senate Financial Reform Managers Amendment Summary, March 23, 2010catelong
The document summarizes amendments made by the manager to the March Dodd bill. Key amendments include: expanding exclusions from the Consumer Financial Protection Bureau's authority; strengthening the Financial Stability Oversight Council's role in certain derivatives exemptions; requiring the FDIC and Fed to jointly determine liquidity events; and modifying provisions around executive compensation, broker discretionary voting, and whistleblower protections. The amendments also address issues like resolution authority, banking regulation, and the Volcker Rule.
A Fistful of Dollars: Lobbying and the Financial Crisis†catelong
Has lobbying by financial institutions contributed to the financial crisis? This paper uses detailed information on financial institutions’ lobbying and their mortgage lending activities to answer this question. We find that, during 2000-07, lenders lobbying more intensively on specific issues related to mortgage lending (such as consumer protection laws) and securitization (i) originated mortgages with higher loan-to-income ratios, (ii) securitized a faster growing proportion of their loans, and (iii) had faster growing loan portfolios. Ex-post, delinquency rates are higher in areas where lobbying lenders’ mortgage lending grew faster. These lenders also experienced negative abnormal stock returns during key events of the crisis. The findings are robust to (i) falsification tests using information on lobbying activities on financial sector issues unrelated to mortgage lending, (ii) instrumental variables strategies, and (iii) a difference-in-difference approach based on state-level lending laws. These results suggest that lobbying may be linked to lenders expecting special treatments from policymakers, allowing them to engage in riskier lending behavior.
Deniz Igan, Prachi Mishra, and Thierry Tressel, Research Department, IMF‡
October 14, 2009
The document summarizes oversight challenges related to implementation of the American Recovery and Reinvestment Act and the long-term fiscal challenges facing the federal government. It notes that implementation of the Recovery Act requires transparency and accountability. It also discusses the growing federal budget deficits and debt over the long run due to rising healthcare and entitlement spending, and recommendations to address these challenges through continued oversight, budget controls, and public discussion.
Counterparty risk in a post Lehmans World -- January, 2010catelong
Results from joint Credit/FitchSolutions survey shows most buy-side firms do not hedge counterparty risk.
Those surveyed cited hedging as too expensive.
The presentation suggest using CDS as early market systems of increasing risk from counterparties.
Discussion of “Do Global Banks Spread Global Imbalances?”catelong
Discussion by Adam Ashcraft of the Federal Reserve Bank of New York of a paper presented at the Jacques Polak Research Conference -- Financial Frictions and Macroeconomic Adjustment, Washington DC, November 5—6, 2009
http://www.imf.org/external/np/res/seminars/2009/arc/index.htm
Interest rate risk management for banks under Basel II, presentation by Christine Brown, Department of Finance , The University of Melbourne, Shanghai, December 8-12, 2008
Dia de los Muertos is a holiday celebrated in Mexico and parts of Latin America that honors deceased loved ones. The document contains three quotes related to themes of haunting, mystery, and the brain having corridors that can be haunted like a house. It explores ideas around remembering and honoring the dead through poetry and descriptions of the moonlight.
From measuring production to measuring well-beingcatelong
What we measure affects what we do; and if our measurements are flawed, decisions may be distorted.
Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance.
So too, we often draw inferences about what are
good policies by looking at what policies have promoted economic growth; but if our metrics of performance are flawed, so too may be the inferences that we draw.
The document lists various things one can do with the remainder of 2009, including practicing a new sport, accepting new challenges, learning another language, making new friends, dreaming, updating one's wardrobe, laughing and smiling, kissing meaningfully, relaxing after work, and achieving at least one goal before the end of the year.
Mad meat! how securitized lending collapsed the financial systemcatelong
The document tells a parable about the financial crisis through the metaphor of a fictional nation called the Users of Sporks Archipelago (USA). In the USA, different islands specialized in different types of meat production. Over time, risky financial products like securitized loans and derivatives were developed, guaranteed by the government, and exported globally, ultimately collapsing the entire financial system. The parable critiques how politics, deregulation, conflicts of interest, and risky innovation led to the crisis.
US Senate Financial Reform Managers Amendment Summary, March 23, 2010catelong
The document summarizes amendments made by the manager to the March Dodd bill. Key amendments include: expanding exclusions from the Consumer Financial Protection Bureau's authority; strengthening the Financial Stability Oversight Council's role in certain derivatives exemptions; requiring the FDIC and Fed to jointly determine liquidity events; and modifying provisions around executive compensation, broker discretionary voting, and whistleblower protections. The amendments also address issues like resolution authority, banking regulation, and the Volcker Rule.
A Fistful of Dollars: Lobbying and the Financial Crisis†catelong
Has lobbying by financial institutions contributed to the financial crisis? This paper uses detailed information on financial institutions’ lobbying and their mortgage lending activities to answer this question. We find that, during 2000-07, lenders lobbying more intensively on specific issues related to mortgage lending (such as consumer protection laws) and securitization (i) originated mortgages with higher loan-to-income ratios, (ii) securitized a faster growing proportion of their loans, and (iii) had faster growing loan portfolios. Ex-post, delinquency rates are higher in areas where lobbying lenders’ mortgage lending grew faster. These lenders also experienced negative abnormal stock returns during key events of the crisis. The findings are robust to (i) falsification tests using information on lobbying activities on financial sector issues unrelated to mortgage lending, (ii) instrumental variables strategies, and (iii) a difference-in-difference approach based on state-level lending laws. These results suggest that lobbying may be linked to lenders expecting special treatments from policymakers, allowing them to engage in riskier lending behavior.
Deniz Igan, Prachi Mishra, and Thierry Tressel, Research Department, IMF‡
October 14, 2009
The document summarizes oversight challenges related to implementation of the American Recovery and Reinvestment Act and the long-term fiscal challenges facing the federal government. It notes that implementation of the Recovery Act requires transparency and accountability. It also discusses the growing federal budget deficits and debt over the long run due to rising healthcare and entitlement spending, and recommendations to address these challenges through continued oversight, budget controls, and public discussion.
Counterparty risk in a post Lehmans World -- January, 2010catelong
Results from joint Credit/FitchSolutions survey shows most buy-side firms do not hedge counterparty risk.
Those surveyed cited hedging as too expensive.
The presentation suggest using CDS as early market systems of increasing risk from counterparties.
Discussion of “Do Global Banks Spread Global Imbalances?”catelong
Discussion by Adam Ashcraft of the Federal Reserve Bank of New York of a paper presented at the Jacques Polak Research Conference -- Financial Frictions and Macroeconomic Adjustment, Washington DC, November 5—6, 2009
http://www.imf.org/external/np/res/seminars/2009/arc/index.htm
Interest rate risk management for banks under Basel II, presentation by Christine Brown, Department of Finance , The University of Melbourne, Shanghai, December 8-12, 2008
Capital Adequacy Standards and Bank Capitalcatelong
For banks these questions are answered:
*What is capital, what role does it play?
*How is capital measured?
*How much capital is desirable?
*How does capital influence bank behaviour?
Presented at the Enhancing Risk Management and Governance in the Region’s Banking System to Implement Basel, II and to Meet Contemporary Risks and Challenges Arising from the Global Banking System, APEC, 8th December - 12th December, 2008
Do Global Banks Spread Global Imbalances? The Case of Asset-Backed Commercial...catelong
The global imbalance explanation of the financial crisis of 2007-09 argues that the
demand for riskless assets from countries with current account surpluses created fragility
in the US financial sector. We examine this explanation by analyzing the geography of
asset-backed commercial paper conduits set up by large commercial banks. We show
that both banks located in surplus countries and banks located in deficit countries
manufactured riskless assets of $1.2 trillion by selling short-term asset-backed
commercial paper to risk-averse investors, predominantly US money market funds, and
investing the proceeds primarily in long term US assets. As negative information about
US assets became apparent in August 2007, banks in both surplus and deficit countries
experienced difficulties rolling over asset-backed commercial paper and as a result
suffered significant losses. We conclude that it was global banking flows, and not just
global imbalances, that determined the geography of the financial crisis.
Viral Acharya, New York University, NBER, and CEPR and Philipp Schnabl, New York University
Macro Risk Premium and Intermediary Balance Sheet Quantitiescatelong
The macro risk premium measures the threshold return for real activity that
receives funding from savers. Financial intermediaries’ balance sheet conditions provide a window on the macro risk premium. The tightness of intermediaries’ balance sheet constraints determines their “risk appetite”. Risk appetite, in turn, determines the set of real projects that
receive funding, and hence determine the supply of credit. Monetary policy affects the risk appetite of intermediaries in two ways: via interest rate policy, and via quantity policies. We estimate time varying risk appetite of financial intermediaries for the U.S., Germany, the U.K., and Japan, and study the joint dynamics of risk appetite with macroeconomic aggregates and monetary policy instruments for the U.S. We argue that risk appetite is an important indicator for monetary conditions.
We measure how securitized assets, including mortgage-backed securities and other asset-backed securities, have shifted across financial institutions over this crisis and how the availability of financing has accommodated such shifts. Sectors dependent on repo financing – in particular, the hedge fund and broker-dealer sector – have reduced asset holdings, while the commercial banking sector, which has had access to more stable funding sources, has increased asset holdings. These findings are important to understand the role played by the government during the crisis as well as to understand the factors determining asset prices and liquidity during the crisis.
Zhiguo He (University of Chicago), In Gu Khang (Northwestern University) and Arvind Krishnamurthy (Northwestern University and NBER)
A short presentation about XBRL and credit ratings made at the Workshop on Improving Access to Financial Data on the Web, 5-6 October 2009, Co-organized by W3C and XBRL International, Inc, and hosted by FDIC, Arlington, Virginia USA
http://www.w3.org/2009/03/xbrl/program.html
Regulating Credit Default Swaps Preview For Presscatelong
Presentation of Mr. Gary Kopff for the PRMIA Conference on Reforming Markets for Credit Default Swaps & Collateralized Debt Obligations held in Washington, DC. June 10th, 2009.
Creating stability in the financial system -- Narrow Bankscatelong
Kevin James discusses the concept of "narrow banking".
This is banks which are constrained in the investing and lending activity.
It is an alternative to the giant too-big-too-fail banks which have nearly brought down the global financial system.
Moderninizing bank supervision and regulationcatelong
This is the testimony of Chris Whalen to the Senate Banking Committee on March 24, 2009 about bank and financial institution regulation and supervision.
- The US banking system is undergoing significant changes due to government bailouts and intervention during the financial crisis. Major banks have failed or been acquired, and the government now owns equity stakes in many banks.
- The credit crisis is not yet over, with losses from mortgage and other loans still mounting and not expected to peak until 2009-2010. Bank losses may exceed those of the 1990-91 recession.
- There is uncertainty around how to address ongoing issues like fear of counterparty risk among banks and restructuring the banking model going forward. The role of government in the banking system has increased substantially.
This document outlines a code for bond salesmen to work hard through intelligence and preparation, ensure deals benefit all parties through honesty and integrity, and represent their company loyally through dignified and knowledgeable relationships. It advises salesmen to make thoughtful mistakes and learn from them, acknowledge no social class but intelligence, remain enthusiastic without exaggeration, and believe in their company's values.
This is a whitepaper prepared for Members of Congress concerning creating more transparency and accountability in the credit ratings process. It details events related to the Credit Crisis of 2007-2008.
The document summarizes the global financial crisis that began in 2007. Excessive lending by central banks over many years led to a massive credit bubble and over-inflated housing markets. Cracks began to emerge in 2007 with downgrades of structured financial products and freezing of credit markets. Major events in 2008 like the failures of Bear Stearns and Lehman Brothers caused widespread panic and frozen credit markets. Government interventions like TARP were required to unfreeze credit and inject capital into banks to avoid a complete financial system collapse. The long term effects of the crisis included massive global deleveraging and economic recovery taking many years.