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Category Archives: Economy

Federal Student Aid – Loan Servicing Information Report

“Per the contractual agreement with each of our federal loan servicers, the Department of Education (the Department) will annually measure servicer performance in the areas of customer satisfaction and default prevention. We will then use these results to determine each servicer’s allocation of future loan volume when applicable. This announcement is intended to share the customer service performance results for the second quarter (ending December 31, 2014) with the financial aid community. The Department measured customer satisfaction with each of the federal loan servicers exclusively through independently administered customer satisfaction surveys. We assessed default prevention through analysis of each servicer’s portfolio.” [Via Shahien Nasiripour: “Some 41 million Americans collectively carry more than $1.1 trillion in education loans owned or guaranteed by the Education Department, a total that surpasses every form of consumer credit in the U.S. except home mortgages. Thursday’s figure reflects more than two-thirds of the $1.1 trillion total. The remainder is owned by the private sector as part of a bank-based federal loan program that has since been discontinued.”]

The Effect of Probability and Uncertainty Models on Hedge Fund Performance Analysis

Muteba Mwamba, John Weirstrastrass, The Effect of Probability and Uncertainty Models on Hedge Fund Performance Analysis (2014). The Journal of Applied Business Research, September/October 2014 Volume 30, Number 5. Available for download at SSRN: http://ssrn.com/abstract=2586164 “This paper implements two types of framework to investigate the outperformance, selectivity and market timing skills in hedge funds: uncertaintyContinue Reading

How the Volcker Rules Became an 8 Billion Annual Business

Via AmericanBanker.com, John Heltman (free to non-subscribers): “The Office of the Comptroller of the Currency — one of the five regulatory agencies that had to write and implement the Volcker Rule — estimated the cost of compliance at just under $1 billion when it conducted a cost-benefit analysis of the proposal back in 2011. AContinue Reading

Deciphering the fall and rise in the net capital share

Brookings Papers on Economic Activity – Matthew Rognlie, MIT Department of Economics: “In the postwar era, developed economies have experienced two substantial trends in the net capital share of aggregate income: a rise during the last several decades, which is well-known, and a fall of comparable magnitude that continued until the 1970s, which is lessContinue Reading

Federal Reserve survey provides information on mobile financial services

News release: “The use of mobile phones to access bank accounts, credit cards, or other financial accounts continued to increase among adults in the United States last year, according to a Federal Reserve Board report, Consumers and Mobile Financial Services 2015. The report is the Board’s fourth looking at how consumers access banking services usingContinue Reading

U.S. ethanol exports in 2014 reach highest level since 2011

“According to EIA monthly supply data through December 2014, which EIA released in late February, U.S. exports of fuel ethanol in 2014 reached their second-highest level at a total of 826 million gallons. This level was second only to the 1.2 billion gallons exported during 2011 and 33% more than exports of fuel ethanol inContinue Reading

Large-Dimensional Factor Modeling Based on High-Frequency Observations

Pelger, Markus, Large-Dimensional Factor Modeling Based on High-Frequency Observations (March 17, 2015). Available for download at SSRN: http://ssrn.com/abstract=2584172 “This paper develops an inferential theory for factor models of large dimensions based on high-frequency observations. We derive a new estimator for the number of factors and derive consistent and asymptotically normal estimators of the loadings andContinue Reading

Reducing Poverty in the United States

Reducing Poverty in the United States: Results of a Microsimulation Analysis of the Community Advocates Public Policy Institute Policy Package, Kye Lippold, March 2015 “A package of five policies—a transitional jobs (TJ) program, a $10.10 minimum wage, expanded earned income tax credits, a tax credit for senior citizens and people with disabilities, and expanded childContinue Reading

The Importance of Addressing Cybersecurity Risks in the Financial Sector

Sarah J. Dahlgren, executive vice president and member of the Bank’s Management Committee, head of the Financial Institution Supervision Group at the Federal Reserve Bank of New York – Remarks at the OpRisk North America Annual Conference, New York City: I am often asked about my list of “things that keep me awake at night,”Continue Reading

New BIS Working Papers – Foreign exchange intervention, Liquidity Squeeze, Global Asset Allocations Shifts, Macroprudential Policy, EMEs

Foreign exchange intervention: strategies and effectiveness – “Foreign exchange intervention has been actively used as a policy tool in many economies in Asia and elsewhere. In this paper, we examine two intervention rules (leaning against exchange rate misalignment and leaning against the wind), utilised with varying degrees of transparency, based on a simple model withContinue Reading

Agencies Provide Feedback on Resolution Plans of Three Foreign Banking Organizations

Firms Required to Address Shortcomings in 2015 Submissions – “The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on Monday announced that they had completed the reviews of resolution plans submitted in 2014 by three large, foreign banking organizations and had issued feedback letters to each institution. In their review of the resolutionContinue Reading

Explaining the Decline in the Number of Banks since the Great Recession

Federal Reserve Bank of Richmond – March 2015, No. 15-03. Explaining the Decline in the Number of Banks since the Great Recession. Roisin McCord, Edward S. Prescott and Tim Sablik. “The financial crisis of 2007–08 was a major shock to the U.S. banking sector. From 2007 through 2013, the number of independent commercial banks shrankContinue Reading