Yale School of Management

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Programs Support Individuals through Tax-Deadline Extensions and Penalty Waivers

April 8, 2020

Several governments have extended the payment deadline for 2019 income taxes or adopted waivers for late-payment penalties as measures to support household income. Among the OECD’s 36 member countries, more than half have implemented such measures. In essence, both policies achieve the same objective which is to relieve households from the burden of a pending income tax payment while affected by the current adverse economic environment. 

Continue reading “Programs Support Individuals through Tax-Deadline Extensions and Penalty Waivers”

Programs Support Individuals through Unemployment Insurance and Wage Subsidies

April 8, 2020

Governments are providing extraordinary relief to the unemployed during the COVID-19 pandemic. Countries are both extending existing coverage and establishing temporary new income-support programs to help individuals who have been furloughed, lost their jobs, or face an imminent layoff. Key considerations for these programs include:

  1. Channel: What is the channel for providing the benefits? 
  2. Size: What is the monetary value of the benefits provided?
  3. Private-sector Funding: Do employers share the cost?
  4. Eligibility: Who is eligible to receive the benefits?  
  5. Length: What is the timeframe for the benefits? 
  6. Administration: How does the individual receive the benefits?
Continue reading “Programs Support Individuals through Unemployment Insurance and Wage Subsidies”

The IMF makes funds available in response to the COVID-19 crisis

April 8, 2020

On March 27, IMF’s Managing Director Kristalina Georgieva revealed that over 80 countries had requested emergency financing from the IMF. The IMF expects the financial needs of emerging markets will be at least $2.5 trillion, and many of these countries already face significant burdens of debt.

About 50 of the requests came from low-income countries and over 30 from middle-income countries. Emerging markets have seen an $83 billion capital outflow, shortages in foreign exchange liquidity, and declines in commodity prices. The IMF aims to expand its emergency financing capacity under its existing facilities and is considering the launch of a new short‑term liquidity swap line.

Continue reading “The IMF makes funds available in response to the COVID-19 crisis”

EU Proposes Support for Short-Time Work Schemes

April 8, 2020

On April 2, the European Commission (EC) announced a proposal to extend loans to Member States to preserve employment. The Support to Mitigate Unemployment Risks in an Emergency (SURE) initiative would provide loans to Member States to support the creation and expansion of short-time work schemes. It is meant to act as a “second line of defence” to back up Member States’ increased public expenditures. The Council of the European Union (EU) must vote on the SURE proposal before it can take effect.

Continue reading “EU Proposes Support for Short-Time Work Schemes”

Mortgage Forbearance and Housing Expense Relief in Response to the COVID-19 Outbreak

April 7, 2020

With US unemployment claims at record highs due to the nation’s directive to close many businesses and shelter-in-place, many individuals are struggling to pay recurring fixed costs, such as mortgages and rent. In response, the United States instituted the CARES Act, providing opportunities for mortgage forbearance and moratoria on evictions for all holders of federally backed loans. Other countries have instituted similar policies, but with varying time-frames and coverage for homeowners and renters.

Continue reading “Mortgage Forbearance and Housing Expense Relief in Response to the COVID-19 Outbreak”

Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak

April 7, 2020

With the outbreak of the COVID-19 virus, many countries have instituted some form of right to mortgage forbearance and protection from foreclosure or eviction. Homeowners may request a forbearance of payment for a negotiated or predetermined fixed period. At the end of the forbearance period, lenders work directly with borrowers to recoup the payments missed, by finding alternative payment schedules. Lenders may change the outstanding principal, interest rates, or term of the loan to help the borrower. 

Continue reading “Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak”

What macroprudential policies are countries using to help their economies through the Covid-19 crisis?

April 6, 2020

Countries around the world are reeling from the health threat and economic and financial fallout from COVID-19. Legislatures are responding with massive relief programs. Central banks have lowered interest rates and opened lender-of-last-resort spigots to support the flow of credit and maintain financial market functioning.

Authorities are also deploying macroprudential policies, many of them developed or improved since the global financial crisis of a decade ago. In this blog, we describe the main macroprudential measures that countries have taken recently. We summarize specific actions and factors considered when relaxing bank capital, loan forbearance, and liquidity requirements. Since late January, about 50 countries have made more than 230 announcements, with up to 500 separate actions, based on current entries in the new Yale Program on Financial Stability 2020 Financial-Intervention Tracker. Macroprudential announcements represent 40 percent of the announcements in the tracker, which also includes those for fiscal, monetary, and emergency liquidity (see figures).

Continue reading “What macroprudential policies are countries using to help their economies through the Covid-19 crisis?”

Professor Shiller Discusses Today’s Economic Narrative with Asset Management Students

By: Electra Ferriello April 6, 2020
shiller

Professor William Goetzmann is the faculty director of the MBA for Executives Asset Management area of focus and selects a variety of guest speakers to participate in the asset management colloquium series. Recently, students were treated to a very appropriately timed virtual guest speaker....

Continue reading “Professor Shiller Discusses Today’s Economic Narrative with Asset Management Students”

Programs Support Individuals through Tax-Deadline Extensions and Penalty Waivers

April 8, 2020

Several governments have extended the payment deadline for 2019 income taxes or adopted waivers for late-payment penalties as measures to support household income. Among the OECD’s 36 member countries, more than half have implemented such measures. In essence, both policies achieve the same objective which is to relieve households from the burden of a pending income tax payment while affected by the current adverse economic environment. 

Continue reading “Programs Support Individuals through Tax-Deadline Extensions and Penalty Waivers”

Programs Support Individuals through Unemployment Insurance and Wage Subsidies

April 8, 2020

Governments are providing extraordinary relief to the unemployed during the COVID-19 pandemic. Countries are both extending existing coverage and establishing temporary new income-support programs to help individuals who have been furloughed, lost their jobs, or face an imminent layoff. Key considerations for these programs include:

  1. Channel: What is the channel for providing the benefits? 
  2. Size: What is the monetary value of the benefits provided?
  3. Private-sector Funding: Do employers share the cost?
  4. Eligibility: Who is eligible to receive the benefits?  
  5. Length: What is the timeframe for the benefits? 
  6. Administration: How does the individual receive the benefits?
Continue reading “Programs Support Individuals through Unemployment Insurance and Wage Subsidies”

The IMF makes funds available in response to the COVID-19 crisis

April 8, 2020

On March 27, IMF’s Managing Director Kristalina Georgieva revealed that over 80 countries had requested emergency financing from the IMF. The IMF expects the financial needs of emerging markets will be at least $2.5 trillion, and many of these countries already face significant burdens of debt.

About 50 of the requests came from low-income countries and over 30 from middle-income countries. Emerging markets have seen an $83 billion capital outflow, shortages in foreign exchange liquidity, and declines in commodity prices. The IMF aims to expand its emergency financing capacity under its existing facilities and is considering the launch of a new short‑term liquidity swap line.

Continue reading “The IMF makes funds available in response to the COVID-19 crisis”

EU Proposes Support for Short-Time Work Schemes

April 8, 2020

On April 2, the European Commission (EC) announced a proposal to extend loans to Member States to preserve employment. The Support to Mitigate Unemployment Risks in an Emergency (SURE) initiative would provide loans to Member States to support the creation and expansion of short-time work schemes. It is meant to act as a “second line of defence” to back up Member States’ increased public expenditures. The Council of the European Union (EU) must vote on the SURE proposal before it can take effect.

Continue reading “EU Proposes Support for Short-Time Work Schemes”

Mortgage Forbearance and Housing Expense Relief in Response to the COVID-19 Outbreak

April 7, 2020

With US unemployment claims at record highs due to the nation’s directive to close many businesses and shelter-in-place, many individuals are struggling to pay recurring fixed costs, such as mortgages and rent. In response, the United States instituted the CARES Act, providing opportunities for mortgage forbearance and moratoria on evictions for all holders of federally backed loans. Other countries have instituted similar policies, but with varying time-frames and coverage for homeowners and renters.

Continue reading “Mortgage Forbearance and Housing Expense Relief in Response to the COVID-19 Outbreak”

Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak

April 7, 2020

With the outbreak of the COVID-19 virus, many countries have instituted some form of right to mortgage forbearance and protection from foreclosure or eviction. Homeowners may request a forbearance of payment for a negotiated or predetermined fixed period. At the end of the forbearance period, lenders work directly with borrowers to recoup the payments missed, by finding alternative payment schedules. Lenders may change the outstanding principal, interest rates, or term of the loan to help the borrower. 

Continue reading “Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak”

What macroprudential policies are countries using to help their economies through the Covid-19 crisis?

April 6, 2020

Countries around the world are reeling from the health threat and economic and financial fallout from COVID-19. Legislatures are responding with massive relief programs. Central banks have lowered interest rates and opened lender-of-last-resort spigots to support the flow of credit and maintain financial market functioning.

Authorities are also deploying macroprudential policies, many of them developed or improved since the global financial crisis of a decade ago. In this blog, we describe the main macroprudential measures that countries have taken recently. We summarize specific actions and factors considered when relaxing bank capital, loan forbearance, and liquidity requirements. Since late January, about 50 countries have made more than 230 announcements, with up to 500 separate actions, based on current entries in the new Yale Program on Financial Stability 2020 Financial-Intervention Tracker. Macroprudential announcements represent 40 percent of the announcements in the tracker, which also includes those for fiscal, monetary, and emergency liquidity (see figures).

Continue reading “What macroprudential policies are countries using to help their economies through the Covid-19 crisis?”

Professor Shiller Discusses Today’s Economic Narrative with Asset Management Students

By: Electra Ferriello April 6, 2020
shiller

Professor William Goetzmann is the faculty director of the MBA for Executives Asset Management area of focus and selects a variety of guest speakers to participate in the asset management colloquium series. Recently, students were treated to a very appropriately timed virtual guest speaker....

Continue reading “Professor Shiller Discusses Today’s Economic Narrative with Asset Management Students”