Yale School of Management

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Fed Actions Help Agency mREITs Step Off the Liquidity Roller Coaster

April 22, 2020

Recent weeks have been a rollercoaster for mortgage real estate investment trusts (mREITs). Problems in funding markets led to quickly falling stock prices for mREITs through March, although they have stabilized in April. In this note, we discuss the business model of the roughly $700 billion mREIT industry, how that model has come under pressure during the COVID-19 crisis, and the differential effect of the Fed’s actions across the industry.

Continue reading “Fed Actions Help Agency mREITs Step Off the Liquidity Roller Coaster”

News in Systemic Risk: Tuesday, April 21, 2020 (10 a.m. ET)

April 21, 2020

Identifying regions at risk with Google Trends: the impact of Covid-19 on US labour markets (Sebastian Doerr and Leonardo Gambacorta; Bank for International Settlements)

Monetary Policy Uncertainty and Monetary Policy Surprises (Michiel De Pooter, Giovanni Favara, Michele Modugno, and Jason Wu; Federal Reserve Board of Governors)

How COVID-19 will change the nation’s long-term economic trends (Mark Muro, Tracy Hadden Loh, Martha Ross, Jenny Schuetz, Annelies Goger, Nicole Bateman, William H. Frey, Joseph Parilla, Sifan Liu, and Adie Tomer; Brookings Institution)

Pandemic loans to firms: Postponing the evil day? (Patrick Honohan ; Peterson Institute for International Economics)

Fed’s balance sheet increases by 50% since March (William Towning; CentralBanking)

The Design Flaw At The Heart Of The CARES Act (Kathryn Judge; Forbes)

Continue reading “News in Systemic Risk: Tuesday, April 21, 2020 (10 a.m. ET)”

Government Support to Individuals and Households During Crises

April 20, 2020

Many countries are adopting programs to provide support to individuals in response to the COVID-19 pandemic, which has entailed unprecedented government-directed curtailment of economic activity. These programs are designed to provide cashflow support for individuals and households who may be struggling due to economic uncertainty and hardship. Measures to support individuals vary and either enhance cashflows or decrease required expenses. In the former category, countries have adopted measures to provide enhanced income support to the unemployed, direct payments to individuals, and favorable access to retirement savings. Tax cuts and filing extensions are examples of the latter. 

Continue reading “Government Support to Individuals and Households During Crises”

News in Systemic Risk: Monday, April 20, 2020 (10 a.m. ET)

April 20, 2020

The dynamics of non-performing loans during banking crises: a new database (Anil Ari, Sophia Chen, Lev Ratnovski; European Central Bank)

Social Distancing and Supply Disruptions in a Pandemic (Martin Bodenstein, Giancarlo Corsetti, and Luca Guerrieri; Federal Reserve Board of Governors)

The growth of non-bank finance and new monetary policy tools (Adrien d'Avernas, Quentin Vandeweyer, Matthieu Darracq Pariès; VoxEU)

The Great Lockdown: Worst Economic Downturn Since the Great Depression (Kristalina Georgieva; International Monetary Fund)

Expected loss provisioning under a global pandemic (Raihan Zamil; Bank for International Settlements)

Interview with Expresso (Luis de Guindos; European Central Bank)

Derby’s Take: Officials Weigh In on Moral Hazard Risk From Fed Interventions (Michael Derby; Wall Street Journal)

Continue reading “News in Systemic Risk: Monday, April 20, 2020 (10 a.m. ET)”

News in Systemic Risk: Friday, April 17, 2020 (10 a.m. ET)

April 17, 2020

Macroeconomic effects of Covid-19: an early review ( Frederic Boissay and Phurichai Rungcharoenkitkul; Bank for International Settlements)

Treasury Market Liquidity during the COVID-19 Crisis (Michael Fleming and Francisco Ruela; Federal Reserve Bank of New York)

Governor’s Statement (Reserve Bank of India)

The art of central bank communication: Old and new (Yosuke Takeda, Masayuki Keida; VoxEU)

Central bank lending logistics in the war on COVID-19: A primer (Simon Potter; Peterson Institute for International Economics)

Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment (Tomaz Cajner, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, Christopher Kurz; Federal Reserve Board of Governors)

Continue reading “News in Systemic Risk: Friday, April 17, 2020 (10 a.m. ET)”

Italy Expands and Updates its Credit Guarantee Programs

April 17, 2020

Italy recently updated and expanded its credit guarantee program for businesses because the original was too small and too administratively complex to get funds to small businesses quickly. The Italian government, with permission from the European Commission (EC), solved the problems, in part, by: (1) significantly increasing the overall amount of funds available in the program and (2) introducing a completely new program explicitly for the self employed and companies with up to 499 employees.

Continue reading “Italy Expands and Updates its Credit Guarantee Programs”

Fed Actions Help Agency mREITs Step Off the Liquidity Roller Coaster

April 22, 2020

Recent weeks have been a rollercoaster for mortgage real estate investment trusts (mREITs). Problems in funding markets led to quickly falling stock prices for mREITs through March, although they have stabilized in April. In this note, we discuss the business model of the roughly $700 billion mREIT industry, how that model has come under pressure during the COVID-19 crisis, and the differential effect of the Fed’s actions across the industry.

Continue reading “Fed Actions Help Agency mREITs Step Off the Liquidity Roller Coaster”

News in Systemic Risk: Tuesday, April 21, 2020 (10 a.m. ET)

April 21, 2020

Identifying regions at risk with Google Trends: the impact of Covid-19 on US labour markets (Sebastian Doerr and Leonardo Gambacorta; Bank for International Settlements)

Monetary Policy Uncertainty and Monetary Policy Surprises (Michiel De Pooter, Giovanni Favara, Michele Modugno, and Jason Wu; Federal Reserve Board of Governors)

How COVID-19 will change the nation’s long-term economic trends (Mark Muro, Tracy Hadden Loh, Martha Ross, Jenny Schuetz, Annelies Goger, Nicole Bateman, William H. Frey, Joseph Parilla, Sifan Liu, and Adie Tomer; Brookings Institution)

Pandemic loans to firms: Postponing the evil day? (Patrick Honohan ; Peterson Institute for International Economics)

Fed’s balance sheet increases by 50% since March (William Towning; CentralBanking)

The Design Flaw At The Heart Of The CARES Act (Kathryn Judge; Forbes)

Continue reading “News in Systemic Risk: Tuesday, April 21, 2020 (10 a.m. ET)”

Government Support to Individuals and Households During Crises

April 20, 2020

Many countries are adopting programs to provide support to individuals in response to the COVID-19 pandemic, which has entailed unprecedented government-directed curtailment of economic activity. These programs are designed to provide cashflow support for individuals and households who may be struggling due to economic uncertainty and hardship. Measures to support individuals vary and either enhance cashflows or decrease required expenses. In the former category, countries have adopted measures to provide enhanced income support to the unemployed, direct payments to individuals, and favorable access to retirement savings. Tax cuts and filing extensions are examples of the latter. 

Continue reading “Government Support to Individuals and Households During Crises”

News in Systemic Risk: Monday, April 20, 2020 (10 a.m. ET)

April 20, 2020

The dynamics of non-performing loans during banking crises: a new database (Anil Ari, Sophia Chen, Lev Ratnovski; European Central Bank)

Social Distancing and Supply Disruptions in a Pandemic (Martin Bodenstein, Giancarlo Corsetti, and Luca Guerrieri; Federal Reserve Board of Governors)

The growth of non-bank finance and new monetary policy tools (Adrien d'Avernas, Quentin Vandeweyer, Matthieu Darracq Pariès; VoxEU)

The Great Lockdown: Worst Economic Downturn Since the Great Depression (Kristalina Georgieva; International Monetary Fund)

Expected loss provisioning under a global pandemic (Raihan Zamil; Bank for International Settlements)

Interview with Expresso (Luis de Guindos; European Central Bank)

Derby’s Take: Officials Weigh In on Moral Hazard Risk From Fed Interventions (Michael Derby; Wall Street Journal)

Continue reading “News in Systemic Risk: Monday, April 20, 2020 (10 a.m. ET)”

News in Systemic Risk: Friday, April 17, 2020 (10 a.m. ET)

April 17, 2020

Macroeconomic effects of Covid-19: an early review ( Frederic Boissay and Phurichai Rungcharoenkitkul; Bank for International Settlements)

Treasury Market Liquidity during the COVID-19 Crisis (Michael Fleming and Francisco Ruela; Federal Reserve Bank of New York)

Governor’s Statement (Reserve Bank of India)

The art of central bank communication: Old and new (Yosuke Takeda, Masayuki Keida; VoxEU)

Central bank lending logistics in the war on COVID-19: A primer (Simon Potter; Peterson Institute for International Economics)

Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment (Tomaz Cajner, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, Christopher Kurz; Federal Reserve Board of Governors)

Continue reading “News in Systemic Risk: Friday, April 17, 2020 (10 a.m. ET)”

Italy Expands and Updates its Credit Guarantee Programs

April 17, 2020

Italy recently updated and expanded its credit guarantee program for businesses because the original was too small and too administratively complex to get funds to small businesses quickly. The Italian government, with permission from the European Commission (EC), solved the problems, in part, by: (1) significantly increasing the overall amount of funds available in the program and (2) introducing a completely new program explicitly for the self employed and companies with up to 499 employees.

Continue reading “Italy Expands and Updates its Credit Guarantee Programs”