Yale School of Management

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News in Systemic Risk: Wednesday, August 12, 2020 (10 a.m. ET)

August 12, 2020
The Financial Response to the Covid-19 Pandemic (Michael Barr, Howell Jackson, Margaret Tahyar; SSRN) Macroprudential policy and the role of institutional investors in housing markets (Manuel A. Muñoz; European Central Bank) ECB report on banks’ ICAAP practices (European Central Bank) Macroprudential regulation can effectively dampen global financial shocks in emerging markets (Katharina Bergant, Francesco Grigoli, Niels-Jakob Hansen, Damiano Sandri; VoxEU) IMF urges broad shake-up of US financial stability framework (William Towning; Central Banking) RBNZ Expands Bond Purchases to Aid Recovery as Covid Returns (Tracy Withers; Bloomberg) Continue reading “News in Systemic Risk: Wednesday, August 12, 2020 (10 a.m. ET)”

The G20’s impasse on Special Drawing Rights (SDRs)

August 11, 2020
Policymakers have spent four months calling for the G20 to support a new allocation or a reallocation of special drawing rights (SDRs) at the IMF. An SDR allocation would help bolster the reserves of the world’s countries. Nevertheless, the G20’s latest July communique, much like the last one in mid-April 2020, barely mentioned the SDR. The only reference to an SDR allocation or reallocation in the communique was an admission that the G20 had indeed discussed it, but could not find a consensus on the issue. The U.S. blocked an allocation and is also blocking efforts to allow rich countries to donate their SDRs to those in need. Continue reading “The G20’s impasse on Special Drawing Rights (SDRs)”

News in Systemic Risk: Tuesday, August 11, 2020 (10 a.m. ET)

August 11, 2020
Risk and return in international corporate bond markets (Geert Bekaert, Roberto A. De Santis; European Central Bank) Spanish Non-Financial Corporations' Liquidity Needs and Solvency After the Covid-19 Shock (Roberto Blanco, Sergio Mayordomo, Álvaro Menéndez, Maristela Mulino; Banco de España) Financial Institutions' Preparedness for LIBOR Cessation and Future Actions with a Focus on the Results of the Joint Survey by the Financial Services Agency and the Bank of Japan (Bank of Japan) Managing capital flows to emerging markets (Bilge Erten, Anton Korinek, José Antonio Ocampo ; VoxEu) Fed denies Goldman's appeal against stress test results (Robert Armstrong; Financial Times) To Some Investors, 10-Year Treasury Note Isn’t What It Was (Julia-Ambra Verlaine; Wall Street Journal) Continue reading “News in Systemic Risk: Tuesday, August 11, 2020 (10 a.m. ET)”

News in Systemic Risk: Monday, August 10, 2020 (10 a.m. ET)

August 10, 2020
Euro area bank bailout policies after the global financial crisis sowed seeds of the next crisis (Viral Acharya, Lea Borchert, Maximilian Jager, Sascha Steffen; VoxEu) Federal Reserve Board announces individual large bank capital requirements, which will be effective on October 1 (Federal Reserve Board of Governors) Reforming bank stress testing in the EU: reflections in light of the EBA’s discussion paper on the issue (Javier Suarez, Willem Buiter; European Systemic Risk Board) Fiscal Policy Measures In Response to the Health Crisis in the Main Euro Area Economies, the United States and the United Kingdom (Lucía Cuadro-Sáez, Fernando S. López-Vicente, Susana Párraga Rodríguez, Francesca Viani; Banco de España) Turkish Lira Hits Record Low, Spurring Expectations of Rate Rise (Caitlin Ostroff; Wall Street Journal Continue reading “News in Systemic Risk: Monday, August 10, 2020 (10 a.m. ET)”

Paycheck Protection Program spread loans widely, if not evenly

August 7, 2020
Congress charged the Paycheck Protection Program (PPP), enacted under the Coronavirus Aid, Relief, and Security (CARES) Act on March 27, with lending to small businesses stricken by the effects of COVID-19, and authorized private lenders to facilitate an unprecedented flow of Small Business Administration (SBA)-guaranteed loans. On this first objective, the program delivered, approving nearly 4.9 million loans with a total volume just north of $521 billion. But its performance, its efficacy, and its efficiency remain unsettled questions. Continue reading “Paycheck Protection Program spread loans widely, if not evenly”

News in Systemic Risk: Friday, August 7 (10 a.m. ET)

August 7, 2020
Securing Secured Finance: The Term Asset-Backed Securities Loan Facility (Elizabeth Caviness, Asani Sarkar ; Federal Reserve Bank of New York) Federal Reserve announces details of new 24x7x365 interbank settlement service with clearing functionality to support instant payments in the United States (Federal Reserve Board of Governors) COVID-19 Response in Emerging Market Economies: Conventional Policies and Beyond (Martin Mühleisen, Tryggvi Gudmundsson, Hélène Poirson Ward; International Monetary Fund) Capital market regulation and coronavirus (Mark Steward; Financial Conduct Authority) Countercyclical capital requirement reductions, state dependence and macroeconomic outcomes (Elif C. Arbatli-Saxegaard, Ragnar E. Juelsrud; Norges Bank) Continue reading “News in Systemic Risk: Friday, August 7 (10 a.m. ET)”

News in Systemic Risk: Thursday, August 6 (10 a.m. ET)

August 6, 2020
Basel Committee releases consultative documents on principles for operational risk and operational resilience (Bank for International Settlements) Note on Financial Stability and Supervision (Bank of Italy) Introduction of Automated Sweep-In and Sweep-Out (ASISO) Facility for end of the day LAF Operations (Reserve Bank of India) Covid-19 challenges IMF debt-restructuring framework (Central Banking) Crapo floats expanded emergency lending, relaxed bank capital rules (Zachary Warmbrodt; PoliticoPro) Interest rates, market power, and financial stability (David Martinez-Miera, Rafael Repullo; VoxEu) Continue reading “News in Systemic Risk: Thursday, August 6 (10 a.m. ET)”

Senate Republicans introduce HEALS Act, next round of COVID-19 response

August 6, 2020
On July 27, Senate Republicans introduced components of the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act. The HEALS Act would extend and alter many of the programs included in the CARES Act, the third COVID-19 response bill. Some key programs, such as enhanced unemployment insurance (UI) benefits, expired on July 25. The bill also introduces new provisions related to education spending and liability protections.  Continue reading “Senate Republicans introduce HEALS Act, next round of COVID-19 response”

The Power of Contradiction

August 6, 2020
drawing of an outline of a head with different facing arrows inside

Don’t wear a mask; wear a mask. Young people are immune to the virus; the virus can harm young people. Hydroxychloroquine can help manage symptoms; no, it can’t. The spread of COVID-19 has pushed science to work in real-time. Downstream from this research, public health authorities have...

Continue reading “The Power of Contradiction”