Yale School of Management

Posts by Author

News in Systemic Risk: Thursday, March 26, 2020 (10 a.m. ET)

March 26, 2020

IMF and Yale provide data on virus responses (Rachael King; CentralBanking)

The banking crisis in Iceland (Patrizia Baudino, Jon Thor Sturluson, Jean-Philippe Svoronos; Bank for International Settlements)

The coronavirus crisis is no 2008 (Jon Danielsson, Robert Macrae, Dimitri Vayanos, Jean-Pierre Zigrand; VoxEU)

BOK Working Paper No.2020-8, Network-Based Measures of Systemic Risk in Korea (Jaewon Choi, Jieun Lee; Bank of Korea)

Where is the US government getting all the money it’s spending in the coronavirus crisis? (Louise Sheiner, David Wessel; Brookings Institution)

Fault lines in fiscal-monetary policy coordination (Lucrezia Reichlin, Dirk Schoenmaker; VoxEU)

Securing macroeconomic and monetary stability with a Federal Reserve–backed digital currency (Julia Coronado, Simon Potter; Peterson Institute for International Economics)

Continue reading “News in Systemic Risk: Thursday, March 26, 2020 (10 a.m. ET)”

Bank of England activates the Contingent Term Repo Facility

March 26, 2020

On March 24, 2020, the Bank of England activated a liquidity “insurance” facility that it created after the 2007-09 Global Financial Crisis to be available in a crisis such as the current one.

The Contingent Term Repo Facility (CTRF) aims to “help alleviate frictions observed in money markets in recent weeks, both globally and domestically, as a result of the economic shock caused by the outbreak of Covid-19.” Financial institutions will be able borrow cash from the central bank reserves for a 3-month term in exchange for less liquid assets. CTRF operations will run for the next two weeks and the Bank of England will announce further operations as needed.

Continue reading “Bank of England activates the Contingent Term Repo Facility”

European Commission Relaxes Rules to Allow Members to Respond Quickly to COVID Crisis

March 25, 2020

On March 19, 2020, the European Commission (EC) said it has relaxed its State Aid rules to allow European national governments to respond quickly to the coronavirus crisis.

In general, the EC’s State Aid rules seek to prevent EC member governments from using state aid to give their countries’ businesses a competitive and unfair advantage. The “Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak” recognizes that its member governments need to work together to mitigate the impact of COVID-19 on the European economy. The framework will be in place through the end of December 2020, although the EC can extend it if necessary. 

The EC adopted a similar temporary resolution during the Global Financial Crisis in 2008.

Continue reading “European Commission Relaxes Rules to Allow Members to Respond Quickly to COVID Crisis”

Central Banks Introduce Programs to Improve Liquidity in Key Markets

March 25, 2020

As the coronavirus crisis continues to disrupt global markets, several countries have adopted new or revised programs to improve liquidity in specific credit markets that are critical to households and businesses. Similar market liquidity programs were introduced during the 2007-2009 Global Financial Crisis (GFC) to backstop wholesale funding markets. Although evaluations of these programs are limited due to the difficulty in isolating the independent effects of these programs, studies report that most of these programs, regardless of size, were helpful in reducing disruptions in these markets by assisting price discovery, restoring confidence and catalyzing market volume.

Continue reading “Central Banks Introduce Programs to Improve Liquidity in Key Markets”

Direct Lending to SMEs - Canada’s Business Credit Availability Program

March 25, 2020

Canada has reintroduced a program from the Global Financial Crisis of 2007-09 to provide government loans directly to small businesses to help them deal with the economic consequences of the COVID-19 pandemic. 

Countries across the world are adopting measures to support small and medium-sized enterprises (SMEs) during the COVID-19 crisis. They often use credit guarantees to facilitate lending to SMEs by guaranteeing their bank loans. This post discusses a less common tool, direct governmental lending to SMEs, illustrated by Canada’s programs both during the Global Financial Crisis, and today.

Continue reading “Direct Lending to SMEs - Canada’s Business Credit Availability Program”

From the Assistant Dean for Admissions: Announcing an Additional ‘Round 3 Extended’ Deadline

By: Bruce DelMonico March 24, 2020

The effects of the COVID-19 pandemic are being felt across the globe, causing profound disruptions to both our personal and professional lives. Above all else, I hope you and yours are well, and taking measures to protect yourselves and your community. Here at the Yale School of Management,...

Continue reading “From the Assistant Dean for Admissions: Announcing an Additional ‘Round 3 Extended’ Deadline”

News in Systemic Risk: Thursday, March 26, 2020 (10 a.m. ET)

March 26, 2020

IMF and Yale provide data on virus responses (Rachael King; CentralBanking)

The banking crisis in Iceland (Patrizia Baudino, Jon Thor Sturluson, Jean-Philippe Svoronos; Bank for International Settlements)

The coronavirus crisis is no 2008 (Jon Danielsson, Robert Macrae, Dimitri Vayanos, Jean-Pierre Zigrand; VoxEU)

BOK Working Paper No.2020-8, Network-Based Measures of Systemic Risk in Korea (Jaewon Choi, Jieun Lee; Bank of Korea)

Where is the US government getting all the money it’s spending in the coronavirus crisis? (Louise Sheiner, David Wessel; Brookings Institution)

Fault lines in fiscal-monetary policy coordination (Lucrezia Reichlin, Dirk Schoenmaker; VoxEU)

Securing macroeconomic and monetary stability with a Federal Reserve–backed digital currency (Julia Coronado, Simon Potter; Peterson Institute for International Economics)

Continue reading “News in Systemic Risk: Thursday, March 26, 2020 (10 a.m. ET)”

Bank of England activates the Contingent Term Repo Facility

March 26, 2020

On March 24, 2020, the Bank of England activated a liquidity “insurance” facility that it created after the 2007-09 Global Financial Crisis to be available in a crisis such as the current one.

The Contingent Term Repo Facility (CTRF) aims to “help alleviate frictions observed in money markets in recent weeks, both globally and domestically, as a result of the economic shock caused by the outbreak of Covid-19.” Financial institutions will be able borrow cash from the central bank reserves for a 3-month term in exchange for less liquid assets. CTRF operations will run for the next two weeks and the Bank of England will announce further operations as needed.

Continue reading “Bank of England activates the Contingent Term Repo Facility”

European Commission Relaxes Rules to Allow Members to Respond Quickly to COVID Crisis

March 25, 2020

On March 19, 2020, the European Commission (EC) said it has relaxed its State Aid rules to allow European national governments to respond quickly to the coronavirus crisis.

In general, the EC’s State Aid rules seek to prevent EC member governments from using state aid to give their countries’ businesses a competitive and unfair advantage. The “Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak” recognizes that its member governments need to work together to mitigate the impact of COVID-19 on the European economy. The framework will be in place through the end of December 2020, although the EC can extend it if necessary. 

The EC adopted a similar temporary resolution during the Global Financial Crisis in 2008.

Continue reading “European Commission Relaxes Rules to Allow Members to Respond Quickly to COVID Crisis”

Central Banks Introduce Programs to Improve Liquidity in Key Markets

March 25, 2020

As the coronavirus crisis continues to disrupt global markets, several countries have adopted new or revised programs to improve liquidity in specific credit markets that are critical to households and businesses. Similar market liquidity programs were introduced during the 2007-2009 Global Financial Crisis (GFC) to backstop wholesale funding markets. Although evaluations of these programs are limited due to the difficulty in isolating the independent effects of these programs, studies report that most of these programs, regardless of size, were helpful in reducing disruptions in these markets by assisting price discovery, restoring confidence and catalyzing market volume.

Continue reading “Central Banks Introduce Programs to Improve Liquidity in Key Markets”

Direct Lending to SMEs - Canada’s Business Credit Availability Program

March 25, 2020

Canada has reintroduced a program from the Global Financial Crisis of 2007-09 to provide government loans directly to small businesses to help them deal with the economic consequences of the COVID-19 pandemic. 

Countries across the world are adopting measures to support small and medium-sized enterprises (SMEs) during the COVID-19 crisis. They often use credit guarantees to facilitate lending to SMEs by guaranteeing their bank loans. This post discusses a less common tool, direct governmental lending to SMEs, illustrated by Canada’s programs both during the Global Financial Crisis, and today.

Continue reading “Direct Lending to SMEs - Canada’s Business Credit Availability Program”

From the Assistant Dean for Admissions: Announcing an Additional ‘Round 3 Extended’ Deadline

By: Bruce DelMonico March 24, 2020

The effects of the COVID-19 pandemic are being felt across the globe, causing profound disruptions to both our personal and professional lives. Above all else, I hope you and yours are well, and taking measures to protect yourselves and your community. Here at the Yale School of Management,...

Continue reading “From the Assistant Dean for Admissions: Announcing an Additional ‘Round 3 Extended’ Deadline”