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Category Archives: Financial System

Consumer advisory: Virtual currencies and what you should know about them

CFPB: “You may have heard about virtual currencies like Bitcoin, XRP, and Dogecoin. But what are virtual currencies? What’s this “to the moon!” business on the internet about? And, as a consumer, what risks should you be aware of? While virtual currencies offer the potential for innovation, a lot of big issues have yet to beContinue Reading

After the Boom–Commodity Prices and Economic Growth in Latin America and the Caribbean

IMF, Bertand Gruss, August 14, 2014. Working Paper No. 14/154. “After skyrocketing over the past decade, commodity prices have remained stable or eased somewhat since mid-2011—and most projections suggest they are not likely to resume the upward trend observed in the last decade. This paper analyzes what this turn in the commodity price cycle may imply forContinue Reading

Looking under the Hood of the Subprime Auto Lending Market

“Today, the New York Fed released the Quarterly Report on Household Debt and Credit for the second quarter of 2014. Aggregate debt was relatively flat in the second quarter as housing-related debt shrank, held down by sluggish mortgage originations. But non-housing debt balances increased across the board, with especially strong gains in auto loans. Auto loan balances,Continue Reading

Broker-Dealer Finance and Financial Stability – Speech

“In a speech in New York, Federal Reserve Bank of Boston President Eric Rosengren called for a comprehensive re-evaluation of the regulation of broker-dealers (intermediaries that effect transactions in securities), given the lessons of the financial crisis. “Broker-dealers played a dramatic role during the crisis,” said Rosengren. Given their dependence on unstable, short-term funding, “broker-dealers canContinue Reading

Macroprudential frameworks: (too) great expectations?

Macroprudential frameworks: (too) great expectations? Contribution by Mr Claudio Borio, Head of the Monetary and Economic Department of the Bank for International Settlements, to the 25th anniversary edition of Central Banking Journal, originally published on 5 August 2014. “Macroprudential frameworks are a welcome response to the Great Financial Crisis. As long argued by the BIS, a strongerContinue Reading

Reducing the Budget Deficit: Overview of Policy Issue

Reducing the Budget Deficit: Overview of Policy Issues. Marc Labonte, Specialist in Macroeconomic Policy. August 7, 2014. “The federal budget has been in deficit (i.e., spending has exceeded revenues) since 2002, and deficits were significantly larger from 2009 to 2012 than in any other year since World War II. As a result, the federal debt held by theContinue Reading

Only 1.3 Billion Worldwide Employed Full Time for Employer – Gallup

Northern America, former Soviet Union lead in Payroll to Population: “About one in four adults worldwide — or roughly 1.3 billion people — worked full time for an employer in 2013. Gallup’s Payroll to Population (P2P) rate, which reports the percentage of the total adult population that works at least 30 hours per week forContinue Reading

Managerial Performance Incentives and Firm Risk During Economic Expansions and Recessions

Raviv, Alon and Savaser, Tanseli and Sisli Ciamarra, Elif, Managerial Performance Incentives and Firm Risk During Economic Expansions and Recessions (August 6, 2014). Available for download at SSRN: http://ssrn.com/abstract=2476964 “In this paper, we argue that the relationship between managerial pay-for-performance incentives and risk taking is procyclical. We study the relationship between incentives provided by stock-based compensationContinue Reading

The Regulatory Price-Tag: Cost Implications of Post-Crisis Regulatory Reform

The Regulatory Price-Tag: Cost Implications of Post-Crisis Regulatory Reform. Federal Financial Analytics, Inc. July 30, 2014. “The total cost of all of the rules that can be reliably and comparably correlated across the six U.S. global systemically-important banks (G-SIBs) assessed in this study is $70.2 billion. The increase in the cost of regulation under these rules forContinue Reading

Nonbank Specialty Servicers: What’s the Big Deal?

Pamela Lee - Urban Institute, August 4, 2014: “Following the crisis, nonbank specialty servicers rapidly expanded their portfolios of distressed loans. This has contributed to a significant market change: in 2011, the 10 largest mortgage servicers were all banks; by 2013, only five of the top 10 were banks, and the other five were nonbank servicers. TheContinue Reading

Rethinking ERISA’s Promise of Income Security in a World of 401(k) Plans

Frolik, Lawrence A., Rethinking ERISA’s Promise of Income Security in a World of 401(k) Plans (July 22, 2014). Connecticut Insurance Law Journal, Vol. 20, p. 371, 2014; U. of Pittsburgh Legal Studies Research Paper No. 2014-26. Available for download at SSRN: http://ssrn.com/abstract=2470019 “This article discusses the evolution of retirement income funds from defined benefit packages toContinue Reading

Speech by Vice Chairman Stanley Fischer on the Great Recession

“The recession that began in the United States in December 2007 ended in June 2009. But the Great Recession is a near-worldwide phenomenon, with the consequences of which many advanced economies–among them Sweden–continue to struggle. Its depth and breadth appear to have changed the economic environment in many ways and to have left the roadContinue Reading