Yale School of Management

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Japan Begins Capital Injections for Financial Institutions in Response to COVID-19

June 19, 2020
On June 13, the Japanese Diet passed an amendment to the Act on Special Measures for Strengthening Financial Functions (ASFF) extending the period of government capital injection to financial institutions from March 31, 2022 to March 31, 2026 and expanding the available public funds for the injection from ¥12 trillion to ¥15 trillion.  Continue reading “Japan Begins Capital Injections for Financial Institutions in Response to COVID-19”

News in Systemic Risk: Friday, June 19, 2020 (10 a.m. ET)

June 19, 2020
The Global Weakness Index – reading the economy’s vital signs during the COVID-19 crisis (Danilo Leiva-Leon, Gabriel Perez-Quiros, Eyno Rots; European Central Bank) Financial stress and the debt structure (David Gauthier; Bank of England) The successes of the Fed’s dollar-swap lines (The Economist) Sweden’s constitution decides its exceptional Covid-19 policy (Lars Jonung; VoxEU) PBoC will not engage in monetary financing, Guo says (Alice Shen; CentralBanking) Continue reading “News in Systemic Risk: Friday, June 19, 2020 (10 a.m. ET)”

Debt Mounts for US Retail and Lodging Mortgagors

June 18, 2020
Government-mandated shutdowns in response to the novel coronavirus have triggered delinquencies among commercial mortgages as businesses struggle with revenue. The purpose of this article is to characterize the risks to US commercial real estate posed by COVID-19 responses. Due to reporting incentives, data on mortgages packaged into commercial mortgage-backed securities (CMBS) is more accessible and granular than data on the whole commercial mortgage market. Even though CMBS-associated properties constitute just 20% of outstanding multifamily and commercial debt, the data generated by such properties can indicate how the whole commercial real estate sector may be affected. On June 4, commercial real estate research firm Trepp reported its largest jump in delinquencies among mortgages involved in the $1.4 trillion CMBS market, with the rate spiking from 2.29% to 7.15%. Continue reading “Debt Mounts for US Retail and Lodging Mortgagors”

Small Business Administration Announces Updates to Small Business Support Programs

June 18, 2020
The Small Business Administration (SBA) and Treasury recently released guidance related to the Paycheck Protection Program (PPP) to clarify that they will forgive loans to employers that are unable to rehire or maintain employment levels. The agencies also released a simplified forgiveness application. Continue reading “Small Business Administration Announces Updates to Small Business Support Programs”

News in Systemic Risk: Thursday, June 18, 2020 (10 a.m. ET)

June 18, 2020
Designing the Main Street Lending Program: Challenges and Options (William B. English, J. Nellie Liang; Brookings Institution) The bank business model in the post-Covid-19 world (Elena Carletti, Stijn Claessens, Antonio Fatás, Xavier Vives; VoxEU) Identifying indicators of systemic risk (Benny Hartwig, Christoph Meinerding, Yves Schüler; Deutsche Bundesbank) The COVID-19 Pandemic and the Opacity of Firms' and Banks' Balance Sheets (Luisa Carpinelli, Raffaele Gallo, Francesco Palazzo; Bank of Italy) Central Counterparty Default Waterfalls and Systemic Loss (Mark Paddrick, Simpson Zhang; Office of Financial Research) FHFA Extends Foreclosure and Eviction Moratorium (Federal Housing Finance Agency) Continue reading “News in Systemic Risk: Thursday, June 18, 2020 (10 a.m. ET)”

Japan Begins Capital Injections for Financial Institutions in Response to COVID-19

June 19, 2020
On June 13, the Japanese Diet passed an amendment to the Act on Special Measures for Strengthening Financial Functions (ASFF) extending the period of government capital injection to financial institutions from March 31, 2022 to March 31, 2026 and expanding the available public funds for the injection from ¥12 trillion to ¥15 trillion.  Continue reading “Japan Begins Capital Injections for Financial Institutions in Response to COVID-19”

News in Systemic Risk: Friday, June 19, 2020 (10 a.m. ET)

June 19, 2020
The Global Weakness Index – reading the economy’s vital signs during the COVID-19 crisis (Danilo Leiva-Leon, Gabriel Perez-Quiros, Eyno Rots; European Central Bank) Financial stress and the debt structure (David Gauthier; Bank of England) The successes of the Fed’s dollar-swap lines (The Economist) Sweden’s constitution decides its exceptional Covid-19 policy (Lars Jonung; VoxEU) PBoC will not engage in monetary financing, Guo says (Alice Shen; CentralBanking) Continue reading “News in Systemic Risk: Friday, June 19, 2020 (10 a.m. ET)”

Debt Mounts for US Retail and Lodging Mortgagors

June 18, 2020
Government-mandated shutdowns in response to the novel coronavirus have triggered delinquencies among commercial mortgages as businesses struggle with revenue. The purpose of this article is to characterize the risks to US commercial real estate posed by COVID-19 responses. Due to reporting incentives, data on mortgages packaged into commercial mortgage-backed securities (CMBS) is more accessible and granular than data on the whole commercial mortgage market. Even though CMBS-associated properties constitute just 20% of outstanding multifamily and commercial debt, the data generated by such properties can indicate how the whole commercial real estate sector may be affected. On June 4, commercial real estate research firm Trepp reported its largest jump in delinquencies among mortgages involved in the $1.4 trillion CMBS market, with the rate spiking from 2.29% to 7.15%. Continue reading “Debt Mounts for US Retail and Lodging Mortgagors”

Small Business Administration Announces Updates to Small Business Support Programs

June 18, 2020
The Small Business Administration (SBA) and Treasury recently released guidance related to the Paycheck Protection Program (PPP) to clarify that they will forgive loans to employers that are unable to rehire or maintain employment levels. The agencies also released a simplified forgiveness application. Continue reading “Small Business Administration Announces Updates to Small Business Support Programs”

News in Systemic Risk: Thursday, June 18, 2020 (10 a.m. ET)

June 18, 2020
Designing the Main Street Lending Program: Challenges and Options (William B. English, J. Nellie Liang; Brookings Institution) The bank business model in the post-Covid-19 world (Elena Carletti, Stijn Claessens, Antonio Fatás, Xavier Vives; VoxEU) Identifying indicators of systemic risk (Benny Hartwig, Christoph Meinerding, Yves Schüler; Deutsche Bundesbank) The COVID-19 Pandemic and the Opacity of Firms' and Banks' Balance Sheets (Luisa Carpinelli, Raffaele Gallo, Francesco Palazzo; Bank of Italy) Central Counterparty Default Waterfalls and Systemic Loss (Mark Paddrick, Simpson Zhang; Office of Financial Research) FHFA Extends Foreclosure and Eviction Moratorium (Federal Housing Finance Agency) Continue reading “News in Systemic Risk: Thursday, June 18, 2020 (10 a.m. ET)”