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Category Archives: Financial System

BLS – Work Experience of the Populations 2013

“A total of 157.0 million persons worked at some point during 2013, the U.S. Bureau of Labor Statistics reported [December 16, 2014]. The proportion of the civilian noninstitutional population age 16 and over who worked at some time during 2013 was 63.5 percent, little different from 63.8 percent in 2012. The number of persons who experienced some unemployment during 2013 decreased by 1.5 million to 20.9 million. These data are based on information collected in the Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS). The CPS is a monthly survey conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics. The ASEC collects information on employment and unemployment experienced during the prior calendar year. Additional information about the CPS and the ASEC, including concepts and definitions, is provided in the Technical Note.

Highlights from the 2013 data:

  • The proportion of workers who worked full time, year round in 2013 was 66.9 percent, up from 65.5 percent the prior year.
  • The “work-experience unemployment rate”–defined as the number of persons unemployed at some time during the year as a proportion of the number of persons who worked or looked for work during the year–fell by 1.0 percentage point over the year to 12.9 percent in 2013.
  • About 4.8 million individuals looked for a job but did not work at all in 2013, down from 5.5 million in 2012…”

 

Option-Based Credit Spreads

Culp, Christopher L. and Nozawa, Yoshio and Veronesi, Pietro, Option-Based Credit Spreads (December 15, 2014). Available for download at SSRN: http://ssrn.com/abstract=2538876 “Theoretically, corporate debt is economically equivalent to safe debt minus a put option on the firm’s assets. We empirically show that indeed portfolios of long Treasuries and short traded put options (“pseudo bonds”) closelyContinue Reading

Federal Reserve issues FOMC statement

December 17, 2014: “Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.Continue Reading

How much capital is enough?

Remarks by Mr Jaime Caruana, General Manager of the BIS, prepared for the IESE Business School conference on “Challenges for the future of banking: regulation, supervision and the structure of banking”, London, 26 November 2014. “The benefits of higher bank capital – absorbing losses, resolving incentive problems and internalising externalities related to systemic risk –Continue Reading

Major Decisions: Graduates’ Earnings Growth and Debt Repayment

Brad Hershbein • Visiting Fellow, The Hamilton Project; Benjamin H. Harris • Policy Director, The Hamilton Project; Melissa S. Kearney • Director, The Hamilton Project. “Student debt is becoming the norm for young adults in America. Aggregate student loan debt has more than tripled over the past decade, as both the number of borrowers and the sizeContinue Reading

Transitioning to Alternative Structures for Housing Finance

“More than six years after the federal government took control of Fannie Mae and Freddie Mac, policymakers are weighing a comprehensive overhaul of the mortgage finance system that could shrink or eventually close the two entities and create a system with more private capital. Fannie Mae and Freddie Mac were originally chartered as government-sponsored enterprisesContinue Reading

State and Local Government Spending Grows Faster Than Revenue

“Between 2007 and 2012, total expenditures for state and local governments increased by 18.2 percent, from $2.7 trillion to $3.2 trillion, while total revenue declined 1.1 percent over the same five-year period, from $3.1 trillion to $3.0 trillion, according to new U.S. Census Bureau data from the 2012 Census of Governments released today. Two major contributorsContinue Reading

LexisNexis® Risk Solutions Releases Annual Mortgage Fraud Report

“LexisNexis® Risk Solutions announced the findings of its annual analysis of mortgage fraud in the U.S., revealing that despite improving economic conditions, mortgage fraud is still a national problem. In fact, mortgage application fraud and misrepresentation has grown for the past three years. Seventy-four percent of loans reported in 2013 involved some kind of fraudContinue Reading

Legislation to Facilitate Cybersecurity Information Sharing: Economic Analysis

CRS – Legislation to Facilitate Cybersecurity Information Sharing: Economic Analysis. N. Eric Weiss, Specialist in Financial Economics. December 11, 2014. “Data breaches, such as those at Target, Home Depot, Neiman Marcus, and JPMorgan Chase, affecting financial records of tens of millions of households seem to occur regularly. Companies typically respond by trying to increase their cybersecurity by hiring consultants and purchasing newContinue Reading

Asset Allocation and Asset Pricing with Opaque and Illiquid Assets

“Buss, Adrian and Uppal , Raman and Vilkov, Grigory, Where Experience Matters: Asset Allocation and Asset Pricing with Opaque and Illiquid Assets (December 15, 2014). Available for download at SSRN: http://ssrn.com/abstract=2538381 “Alternative assets, such as private equity, hedge funds, and real assets, are illiquid and opaque, thus posing a challenge to traditional models of asset allocation.Continue Reading

The role of enterprising libraries in promoting economic wellbeing

The Carnegie UK Trust – Beyond Books. The role of enterprising libraries in promoting economic wellbeing. Jennifer Peachey. “Public spending cuts are changing the physical landscape, governance models and staffing of the public library service. Changing demographics, varying consumer needs and new technologies as media for learning and accessing information have also provided challenges to the public library service. Some public libraries have taken these challenges asContinue Reading

An Equilibrium Model of Institutional Demand and Asset Prices

Koijen, Ralph S. J. and Yogo, Motohiro, An Equilibrium Model of Institutional Demand and Asset Prices (December 12, 2014). Available for download at SSRN: http://ssrn.com/abstract=2537559 “We develop an asset pricing model with rich heterogeneity in asset demand across investors, designed to match institutional holdings data. The equilibrium price vector is uniquely determined by market clearing,Continue Reading