Shadow banking and the economy

Alan Moreira, Alexi Savov 16 September 2014

a

A

Shadow banking, what is it good for? At the epicentre of the global financial crisis, shadow banking has become the focus of intense regulatory scrutiny. All reform proposals implicitly take a stance on its economic value.

According to the prevailing regulatory arbitrage and neglected risks views, it doesn’t have any – shadow banking is about evading capital requirements, exploiting ‘too big to fail’, and marketing risky securities as safe to unwitting investors. The right response is to bring shadow banking into the regulatory and supervisory regime that covers insured banks.

a

A

Topics:  Financial markets Global crisis Macroeconomic policy

Tags:  shadow banking, banking, financial crisis, global crisis, regulatory arbitrage, liquidity transformation, financial stability, externalities, collateral, business cycle, financial regulation, financial fragility, liquidity, liquidity crunch

Quantifying the macroeconomic effects of large-scale asset purchases

Karl Walentin 11 September 2014

a

A

Central banks have used various unconventional monetary policy tools since the onset of the financial crisis yet the debate continues regarding their efficiency. This column attempts to shed light on the ‘bang for the buck’, or the macroeconomic effects, of one such unconventional monetary policy – the Federal Reserve’s large-scale asset purchases of mortgage-backed securities employed during the Fed’s QE1 and QE3 programs.

a

A

Topics:  Global crisis Monetary policy

Tags:  monetary policy, unconventional monetary policy, large-scale asset purchases, central banking, financial crisis, Federal Reserve, quantitative easing, mortgage-backed securities, term premia, zero lower bound, interest rates, US, UK, Sweden, mortgages, global crisis

What were they thinking? The Federal Reserve in the run-up to the 2008 financial crisis

Stephen Golub, Ayse Kaya, Michael Reay 08 September 2014

a

A

Financial crises are caused by imprudent borrowing and lending, but as former Federal Reserve chairman William McChesney Martin noted, it is ultimately up to regulators to ‘take away the punch bowl’ when the larger economy is at risk. Indeed, many have criticised regulators for failing to anticipate and prevent the 2008 crash (Buiter 2012, Gorton 2012, Johnson and Kwak 2010, Roubini and Mihm 2010). Little work has been done, however, on why regulatory agencies failed to act despite warnings from prominent commentators (Borio and White 2004, Buffett 2003, Rajan 2005).

a

A

Topics:  Financial markets Global crisis Monetary policy

Tags:  financial crisis, Federal Reserve, FOMC, global crisis, collateralised debt obligations, Credit Default Swaps, LTCM, CDOs, CDSs, central banking

Political booms, financial crises: Why popular governments are not always a good sign

Christoph Trebesch, Helios Herrera, Guillermo L. Ordoñez 06 September 2014

a

A

Financial crises: the search for early warning indicators

Financial crises are a recurrent phenomenon in the history of emerging markets and advanced economies alike. To understand the common causes of these crises and to prevent future ones from developing, economists have a long tradition of studying early warning indicators. Two well-documented predictors of financial crises are credit booms and capital flow bonanzas.

a

A

Topics:  Financial markets Politics and economics

Tags:  credit booms, financial crisis, politics, emerging markets, capital flows, public opinion, popularity

The impact of capital requirements on bank lending

Jonathan Bridges, David Gregory, Mette Nielsen, Silvia Pezzini, Amar Radia, Marco Spaltro 02 September 2014

a

A

The financial crisis has led to widespread support for greater use of time-varying capital requirements on banks as a macroprudential policy tool (see for example Yellen 2010 and Hanson et al. 2011). Policymakers aim to use these tools to enhance the resilience of the financial system, and, potentially, to curb the credit cycle. Under Basel III, national regulatory authorities will be tasked with setting countercyclical capital buffers over the economic cycle.

a

A

Topics:  Financial markets

Tags:  Macroprudential policy, capital requirements, regulation, bank regulation, BASEL III, Bank of England, financial crisis, bank lending, UK

Lessons from history for the European Financial Crisis

Selin Sayek, Fatma Taskin 05 July 2014

a

A

As of July 2014, we continue to debate whether the European economy is out of the woods. The effectiveness of policies and the prospects of full recovery are under scrutiny. The unique nature of Europe’s monetary union begets further questions of whether policies should be designed to resolve a single euro crisis, or whether they should be designed to resolve multiple European crises occurring simultaneously. A discussion of whether the sui generis European project has led to a sui generis set of financial crises would provide a framework for these policy discussions.

a

A

Topics:  Economic history Europe's nations and regions Global crisis

Tags:  eurozone, financial crisis, EZ crisis, GIIPS

Teaching economics as if the last three decades had happened

Wendy Carlin interviewed by Viv Davies,

Date Published

Tue, 05/20/2014

a

A

a

A

Topics

Frontiers of economic research
Tags
financial crisis, global crisis, academia, teaching, economics education, undergraduates

Related Article(s)

Greening Economics: It is time How should macroeconomics be taught to undergraduates in the post-crisis era? A concrete proposal Are economics graduates fit for purpose? Why teaching economics must now change in light of the crisis
MP3 File Details

Listen

Unfortunately the file could not be found.

Open in a pop-up window Open in a pop-up window

Download

Download MP3 File (5.67MB)

MP3 File Size

5.67MB

MP3 RSS File Size

5,670,000

MP3 Length (Minutes)

6

MP3 Length (Seconds)

12

The mainstream economics curriculum needs an overhaul

Diane Coyle 04 May 2014

a

A

One of the delayed consequences of the financial crisis is a widespread and apparently growing desire to change how economics is taught. Students in a number of countries, including vocal groups in Chile and the UK, have recently intensified the demand for reform. One recent example is a report from the Post-Crash Economics Society at the University of Manchester (Post-Crash Economics Society 2014).

a

A

Topics:  Education Global crisis

Tags:  education, financial crisis, global crisis, academia, teaching, economics education, undergraduates

The locust and the bee: predators and creators in capitalism's future

Geoff Mulgan interviewed by Romesh Vaitilingam,

Date Published

Fri, 04/11/2014

a

A

See Also

Mulgan, G (2014) The Locust and the Bee: Predators and Creators in Capitalism's Future. Princeton University Press 

a

A

Topics

Politics and economics
Tags
innovation, financial crisis, political uncertainty

Related Article(s)

Redistribution, inequality, and sustainable growth The price of political uncertainty The puzzling pervasiveness of dysfunctional banking The great escape from death and deprivation New evidence on the durability of social norms
MP3 File Details

Listen

Unfortunately the file could not be found.

Open in a pop-up window Open in a pop-up window

Download

Download MP3 File (11.2MB)

MP3 File Size

11.2MB

MP3 RSS File Size

11200000

MP3 Length (Minutes)

12

MP3 Length (Seconds)

14

When

April 2014

Where

London

Exploring the transmission channels of contagious bank runs

Martin Brown, Stefan Trautmann, Razvan Vlahu 10 April 2014

a

A

Financial contagion – the situation in which liquidity or insolvency risk is transmitted from one financial institution to another – is viewed by policymakers and academics as a key source of systemic risk in the banking sector. In particular, the events in the 2007–2009 Global Crisis have turned the attention of policymakers towards the potential contagion of liquidity withdrawals across banks and the resulting implications for financial stability.

a

A

Topics:  Financial markets

Tags:  experimental economics, financial stability, financial crisis, global crisis, banking, contagion, banks, systemic risk, bank runs

Pages

Events