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Category Archives: Financial System

Systemically Important or “Too Big to Fail” Financial Institutions

CRS – Systemically Important or “Too Big to Fail” Financial Institutions. Marc Labonte, Specialist in Macroeconomic Policy. September 19, 2014. “Although “too big to fail” (TBTF) has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008. Financial firms are said to be TBTF when policy makers judge that their failure wouldContinue Reading

Assessment of the FRBNY DSGE Model’s Real-Time Forecasts, 2010-13

Matthew Cocci, Marco Del Negro, Stefano Eusepi, Marc Giannoni, and Sara Shahanaghi  - Fourth in a five-part series “This series examines the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (FRBNY DSGE) model—a structural model used by Bank researchers to understand the workings of the U.S. economy and provide economic forecasts.The previous post in thisContinue Reading

Moody’s – Largest Public Pensions Face $2 Trillion Gap

Brian Chappatta – Bloomberg: “The 25 largest U.S. public pensions face about $2 trillion in unfunded liabilities, showing that investment returns can’t keep up with ballooning obligations, according to Moody’s Investors ServiceThe 25 biggest systems by assets averaged a 7.45 percent return from 2004 to 2013, close to the expected 7.65 percent rate, Moody’s saidContinue Reading

How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay

Kiatpongsan, Sorapop, and Michael I. Norton. How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay. Perspectives on Psychological Science (forthcoming). “Do people from different countries and different backgrounds have similar preferences for how much more the rich should earn than the poor? Using survey data from 40 countries (N = 55,238), we compare respondents’ estimates ofContinue Reading

Updated reverse mortgage guide: Two things you should know

CFPB: “More and more homeowners are considering tapping their home equity as they approach retirement age. Getting a reverse mortgage is one way that some older homeowners can do that. Reverse mortgages are a special type of home equity loan sold to homeowners aged 62 years and older, which are repaid when the borrowers sellContinue Reading

Measuring Labor Market Slack

CBO - Presentation by Wendy Edelberg at the Peterson Institute for International Economics conference on Labor Market Slack: Assessing and Addressing in Real Time “In CBO’s view, the current slack in the labor market consists of multiple elements, including: The labor force participation rate is well below what CBO estimates would be achieved if the demand forContinue Reading

The Price of Crisis: Eminent Domain, Local Governments, and the Value of Underwater Mortgages

Brescia, Raymond H. and Martin, Nicholas M., The Price of Crisis: Eminent Domain, Local Governments, and the Value of Underwater Mortgages (September 19, 2014). Temple Political & Civil Rights Law Review, Vol. 24, 2014, Forthcoming. Available for download at SSRN: http://ssrn.com/abstract=2498651 “Governments at all levels in the U.S. have deployed a range of tactics to addressContinue Reading

Left Behind: The Long-term Unemployed Struggle in an Improving Economy

“A new John J. Heldrich Center for Workforce Development at Rutgers University analysis of unemployed and long-term unemployed Americans reveals the profound struggles of Americans who remained jobless for months and years even as the economy gradually recovers. The survey reveals that more than 7 in 10 the long-term unemployed say they have less in savingsContinue Reading

Hedge Funds versus Mutual Funds (2): An Examination of Multialternative Mutual Funds

McCarthy, David, Hedge Funds versus Mutual Funds (2): An Examination of Multialternative Mutual Funds (September 19, 2014). Available at SSRN: http://ssrn.com/abstract=2498695 “This paper examines those mutual funds classified by Morningstar as “Alternative.” It follows an earlier paper, “Hedge Funds vs. Mutual Funds: An Examination of Equity Long/Short Funds,” which found that equity long/short mutual funds didContinue Reading

Liquidity Supply Across Multiple Trading Venues

Lescourret, Laurence and Moinas, Sophie, Liquidity Supply Across Multiple Trading Venues (September 15, 2014). Available for download at SSRN: http://ssrn.com/abstract=2498277 “Market fragmentation and technology have given rise to new trading strategies. One of them is to supply liquidity simultaneously across multiple trading venues, which requires multi-venue management of inventory risk. We build an inventory model inContinue Reading

Financial Crisis, Unconventional Monetary Policy and International Spillovers

Chen, Qianying and Filardo, Andrew J. and He, Dong and Zhu, Feng, Financial Crisis, Unconventional Monetary Policy and International Spillovers (September 18, 2014). HKIMR Working Paper No.23/2014. Available for download at SSRN: http://ssrn.com/abstract=2497922 “This paper studies the effects of unconventional monetary policies in the major advanced economies. We first examine the cross-border financial market impact ofContinue Reading

Social Security: What Would Happen If the Trust Funds Ran Out?

CRS – Social Security: What Would Happen If the Trust Funds Ran Out? Noah P. Meyerson,  Analyst in Income Security. August 28, 2014. “The Social Security Trustees project that, under their intermediate assumptions and under current law, the Disability Insurance (DI) trust fund will become exhausted in 2016 and the Old-Age and Survivors Insurance (OASI) trust fund will becomeContinue Reading