Yale School of Management

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GAO Report Highlights Opportunities to Improve Federal COVID Response and Recovery Efforts

July 13, 2020
On June 25, 2020 the Government Accountability Office (GAO) provided a comprehensive report to Congress detailing the US government’s response to the COVID pandemic, particularly the four relief laws passed prior to June 2020, and actionable steps to improve those efforts. Within these four laws, $2.6 trillion has been mobilized (breakdown below). However, the GAO does not have insight into the actual expenditures, only appropriations, as the federal agencies will begin detailing spending in their July 2020 monthly reporting. In regards to the overall federal response, the GAO notes the speed with which the programs were launched. However it faults agencies for “[making] only limited progress so far in achieving transparency and accountability goals.” Continue reading “GAO Report Highlights Opportunities to Improve Federal COVID Response and Recovery Efforts”

News in Systemic Risk: Monday, July 13, 2020 (10 a.m. ET)

July 13, 2020
Fed, Treasury Disagreements Slowed Start of Main Street Lending Program (Nick Timiraos, Kate Davidson; Wall Street Journal) Pursuing a successful path towards euro area accession (Fabio Panetta; European Central Bank) Toward a More Resilient Europe (Poul M. Thomsen; International Monetary Fund) Bank instability: Interbank linkages and the role of disclosure (Christian König-Kersting, Stefan T. Trautmann, Razvan Vlahu; Bank of Finland) Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight (Michael Woodford, Yinxi Xie; National Bureau of Economic Research) A tale of two crises: Lessons from the financial crisis to prevent the Great Fragmentation (Marco Buti; VoxEU) The COVID-19 threat to financial stability in Europe (Henk Jan Reinders, Dirk Schoenmaker, Mathijs van Dijk; VoxEU) France Primes Fresh Stimulus to Boost Jobs, Cut Taxes on Firms (William Horobin; Bloomberg) Continue reading “News in Systemic Risk: Monday, July 13, 2020 (10 a.m. ET)”

Paycheck Protection Program highlights numerous oversight concerns even as the SBA makes first disclosures

July 13, 2020
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which passed on March 27, established the Paycheck Protection Program (PPP), the US government’s largest and most controversial program put in place to address the economic impacts of the COVID-19 virus. Since April 3,the PPP has issued nearly 4.9 million loans guaranteed by the Small Business Administration (SBA). As of June 30, banks and other private lenders have extended $521 billion in government-guaranteed, forgivable loans under the program. The government’s support measures have enjoyed popularity with taxpayers compared to those enacted during the Global Financial Crisis (GFC). However, the PPP has been under constant scrutiny from Congress and industry critics since implementation. In response to such criticism and changing economic conditions, both Congress and the SBA have repeatedly modified the program. Continue reading “Paycheck Protection Program highlights numerous oversight concerns even as the SBA makes first disclosures”

News in Systemic Risk: Friday, July 10, 2020 (10 a.m. ET)

July 10, 2020
Global Banks’ Dollar Funding: A Source of Financial Vulnerability (Adolfo Barajas, Andrea Deghi, Claudio Raddatz, Dulani Seneviratne, Peichu Xie, Yizhi Xu ; International Monetary Fund) Dollar shortages and central bank swap lines (Fernando Eguren-Martin; Bank of England) Stock Market Participation, Inequality, and Monetary Policy (Davide Melcangi, Vincent Sterk; Federal Reserve Bank of New York) The Cleansing Effect of Banking Crises (Reint Gropp, Steven Ongena, Jörg Rocholl, Vahid Saadi; Centre for Economic Policy Research) The pandemic revives ultra-safe European bonds (The Economist) Finance and politics: New insights (Thorsten Beck, Orkun Saka, Paolo Volpin; VoxEU) Continue reading “News in Systemic Risk: Friday, July 10, 2020 (10 a.m. ET)”

RBI to provide liquidity to non-bank financial firms

July 9, 2020
On July 1, the Reserve Bank of India (RBI) announced guidelines for a $4 billion (₹300 billion) special liquidity scheme (SLS) to purchase short-term debt from eligible non-banking financial firms (NBFCs) and housing finance companies (HFCs). The RBI said its purpose is to “avoid any potential systemic risk to the financial sector.” Continue reading “RBI to provide liquidity to non-bank financial firms ”

News in Systemic Risk: Thursday, July 9, 2020 (10 a.m. ET)

July 9, 2020
Global in Life and Orderly in Death: Post-Crisis Reforms and the Too-Big-to-Fail Question (Randal K. Quarles; Federal Reserve Board of Governors) Bank failure management in the European banking union: What's wrong and how to fix it (Fernando Restoy, Rastko Vrbaski, Ruth Walters; Bank for International Settlements) FSB and Basel Committee set out supervisory recommendations for benchmark transition (Financial Stability Board) Big Banks Aren’t Embracing Fed’s Main Street Loan Program (Jeanna Smialek; New York Times) Sri Lanka Reduces Key Rate for Fifth Time to Aid Economy (Anusha Ondaatjie; Bloomberg) Continue reading “News in Systemic Risk: Thursday, July 9, 2020 (10 a.m. ET)”

GAO Report Highlights Opportunities to Improve Federal COVID Response and Recovery Efforts

July 13, 2020
On June 25, 2020 the Government Accountability Office (GAO) provided a comprehensive report to Congress detailing the US government’s response to the COVID pandemic, particularly the four relief laws passed prior to June 2020, and actionable steps to improve those efforts. Within these four laws, $2.6 trillion has been mobilized (breakdown below). However, the GAO does not have insight into the actual expenditures, only appropriations, as the federal agencies will begin detailing spending in their July 2020 monthly reporting. In regards to the overall federal response, the GAO notes the speed with which the programs were launched. However it faults agencies for “[making] only limited progress so far in achieving transparency and accountability goals.” Continue reading “GAO Report Highlights Opportunities to Improve Federal COVID Response and Recovery Efforts”

News in Systemic Risk: Monday, July 13, 2020 (10 a.m. ET)

July 13, 2020
Fed, Treasury Disagreements Slowed Start of Main Street Lending Program (Nick Timiraos, Kate Davidson; Wall Street Journal) Pursuing a successful path towards euro area accession (Fabio Panetta; European Central Bank) Toward a More Resilient Europe (Poul M. Thomsen; International Monetary Fund) Bank instability: Interbank linkages and the role of disclosure (Christian König-Kersting, Stefan T. Trautmann, Razvan Vlahu; Bank of Finland) Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight (Michael Woodford, Yinxi Xie; National Bureau of Economic Research) A tale of two crises: Lessons from the financial crisis to prevent the Great Fragmentation (Marco Buti; VoxEU) The COVID-19 threat to financial stability in Europe (Henk Jan Reinders, Dirk Schoenmaker, Mathijs van Dijk; VoxEU) France Primes Fresh Stimulus to Boost Jobs, Cut Taxes on Firms (William Horobin; Bloomberg) Continue reading “News in Systemic Risk: Monday, July 13, 2020 (10 a.m. ET)”

Paycheck Protection Program highlights numerous oversight concerns even as the SBA makes first disclosures

July 13, 2020
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which passed on March 27, established the Paycheck Protection Program (PPP), the US government’s largest and most controversial program put in place to address the economic impacts of the COVID-19 virus. Since April 3,the PPP has issued nearly 4.9 million loans guaranteed by the Small Business Administration (SBA). As of June 30, banks and other private lenders have extended $521 billion in government-guaranteed, forgivable loans under the program. The government’s support measures have enjoyed popularity with taxpayers compared to those enacted during the Global Financial Crisis (GFC). However, the PPP has been under constant scrutiny from Congress and industry critics since implementation. In response to such criticism and changing economic conditions, both Congress and the SBA have repeatedly modified the program. Continue reading “Paycheck Protection Program highlights numerous oversight concerns even as the SBA makes first disclosures”

News in Systemic Risk: Friday, July 10, 2020 (10 a.m. ET)

July 10, 2020
Global Banks’ Dollar Funding: A Source of Financial Vulnerability (Adolfo Barajas, Andrea Deghi, Claudio Raddatz, Dulani Seneviratne, Peichu Xie, Yizhi Xu ; International Monetary Fund) Dollar shortages and central bank swap lines (Fernando Eguren-Martin; Bank of England) Stock Market Participation, Inequality, and Monetary Policy (Davide Melcangi, Vincent Sterk; Federal Reserve Bank of New York) The Cleansing Effect of Banking Crises (Reint Gropp, Steven Ongena, Jörg Rocholl, Vahid Saadi; Centre for Economic Policy Research) The pandemic revives ultra-safe European bonds (The Economist) Finance and politics: New insights (Thorsten Beck, Orkun Saka, Paolo Volpin; VoxEU) Continue reading “News in Systemic Risk: Friday, July 10, 2020 (10 a.m. ET)”

RBI to provide liquidity to non-bank financial firms

July 9, 2020
On July 1, the Reserve Bank of India (RBI) announced guidelines for a $4 billion (₹300 billion) special liquidity scheme (SLS) to purchase short-term debt from eligible non-banking financial firms (NBFCs) and housing finance companies (HFCs). The RBI said its purpose is to “avoid any potential systemic risk to the financial sector.” Continue reading “RBI to provide liquidity to non-bank financial firms ”

News in Systemic Risk: Thursday, July 9, 2020 (10 a.m. ET)

July 9, 2020
Global in Life and Orderly in Death: Post-Crisis Reforms and the Too-Big-to-Fail Question (Randal K. Quarles; Federal Reserve Board of Governors) Bank failure management in the European banking union: What's wrong and how to fix it (Fernando Restoy, Rastko Vrbaski, Ruth Walters; Bank for International Settlements) FSB and Basel Committee set out supervisory recommendations for benchmark transition (Financial Stability Board) Big Banks Aren’t Embracing Fed’s Main Street Loan Program (Jeanna Smialek; New York Times) Sri Lanka Reduces Key Rate for Fifth Time to Aid Economy (Anusha Ondaatjie; Bloomberg) Continue reading “News in Systemic Risk: Thursday, July 9, 2020 (10 a.m. ET)”