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Daily Archives: September 11, 2014

How Does Credit Supply Respond to Monetary Policy and Bank Minimum Capital Requirements?

Aiyar, Shekhar S. and Calomiris, Charles W. and Wieladek, Tomasz, How Does Credit Supply Respond to Monetary Policy and Bank Minimum Capital Requirements? (September 5, 2014). Bank of England Working Paper No. 508. Available for download at SSRN: http://ssrn.com/abstract=2494187

We use data on UK banks’ minimum capital requirements to study the interaction of monetary policy and capital requirement regulation. UK banks were subject to both time-varying capital requirements and changes in interest rate policy. Tightening of either capital requirements or monetary policy reduces the supply of lending. Lending by large banks reacts substantially to capital requirement changes, but not to monetary policy changes. Lending by small banks reacts to both. There is little evidence of interaction between these two policy instruments. The differences in the responses of small and large banks, and the lack of interaction between capital requirement changes and monetary policy, have important policy implications. Our results confirm the theoretical consensus view that monetary policy should focus on price stability objectives and that capital requirement changes are a more effective tool to achieve financial stability objectives related to loan supply. We also identify important distributional consequences within the financial system of these two policy instruments. Finally, our findings do not corroborate theoretical models that raise concerns about complex interactions between monetary policy and macroprudential variation in capital requirements.”

The U.S. Global Health Budget Tracker

“The Kaiser Family Foundation has launched a new, interactive, online tool designed to provide the latest data on the U.S. government’s global health budget in an easy-to-access form. The U.S. Global Health Budget Tracker lets users follow the budget from the President’s budget request through the appropriations process in Congress, as well as see trends over time. Data… Continue Reading

On Modeling the Costs of Censorship

Michael Carl Tschantz, Sadia Afroz, Vern Paxson, J. D. Tygar (Submitted on 10 Sep 2014) “We argue that the evaluation of censorship evasion tools should depend upon economic models of censorship. We illustrate our position with a simple model of the costs of censorship. We show how this model makes suggestions for how to evade censorship. In particular, from… Continue Reading

Police at more than 100 institutions acquired gear from DoD at little or no cost

Follow up to Defense Department military equipment distributed free to states around the country, via Dan Bauman, Chronicle of Higher Education: “At least 117 colleges have acquired equipment from the department through a federal program, known as the 1033 program, that transfers military surplus to law-enforcement agencies across the country, according to records The Chronicle received after filing Freedom of Information… Continue Reading