Yale School of Management

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US Begins Airline and Aviation Interventions

April 23, 2020

On April 20, the U.S. Treasury Department announced that it had finalized agreements with six major airlines—Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines—for $20.5 billion in assistance under the Payroll Support Program (PSP) established by the CARES Act. It said five other airlines plan to participate, which would bring participation to 95% of U.S. air carrier capacity.

Continue reading “US Begins Airline and Aviation Interventions”

Aviation Interventions Continue Internationally

April 23, 2020

Governments around the world have committed many billions of dollars to help the aviation sector survive the COVID-19 crisis. This aid comes in the form of grants, loans, loan guarantees, tax relief, and other subsidies. Some programs are targeted at specific firms and others provide broad-based support. The US is implementing what it expects to be the largest targeted package for the industry. Singapore's program appears to be the second most generous. 

Continue reading “Aviation Interventions Continue Internationally”

News in Systemic Risk: Thursday, April 23, 2020 (10 a.m. ET)

April 23, 2020

ECB takes steps to mitigate impact of possible rating downgrades on collateral availability (European Central Bank)

Insurance regulatory measures in response to Covid-19 (Jeffery Yong; Bank of International Settlements)

Longer-Run Economic Consequences of Pandemics (Oscar Jorda, Sanjay R. Singh, Alan M. Taylor; Federal Reserve Bank of San Francisco)

The Janus face of bank geographic complexity (Iñaki Aldasoro, Bryan Hardy and Maximilian Jager; Bank of International Settlements)

Bank portfolio risk profiles vs the zero lower bound (Johannes Bubeck, Angela Maddaloni, José-Luis Peydró; VoxEU)

More Coronavirus Aid to Small Businesses Is Coming, But It Might Not Be Enough (Amara Omeokwe; Wall Street Journal)

Continue reading “News in Systemic Risk: Thursday, April 23, 2020 (10 a.m. ET)”

The IMF Expands and Expedites Lending in Response to the COVID-19 crisis

April 22, 2020

Since March, the International Monetary Fund (IMF) has expanded existing lending programs and introduced new ones to help countries bear the costs of the COVID-19 crisis. As of April 21, it had approved a total of $8.7 billion in emergency financing for over 40 member countries, of the more than 100 countries that have requested assistance. (See the updated list here).

Continue reading “The IMF Expands and Expedites Lending in Response to the COVID-19 crisis”

Early Use of Federal Reserve Programs

April 22, 2020

After the COVID-19 crisis began, the Federal Reserve quickly announced a number of emergency lending facilities, largely based on programs it first introduced during the Global Financial Crisis of 2007-09 (GFC). These programs have varied in size and speed of implementation. Bank reserve balances at the Fed have reached a historic high in recent weeks, exceeding $3 trillion for the first time, suggesting banks could lend much more.

This post discusses the early use of the following Fed lending programs: (1) primary credit through the discount window, (2) central bank swap lines and FIMA repos, (3) the Money Market Mutual Fund Liquidity Facility (MMLF), (4) the Primary Dealer Credit Facility (PDCF), and (5) the Commercial Paper Funding Facility (CPFF). 

Continue reading “Early Use of Federal Reserve Programs”

Governments Provide Financial Regulatory Relief

April 22, 2020

The COVID-19 crisis has led governments across the world to temporarily ease the operational burden of  supervisory and regulatory activities on the financial institutions they regulate. These regulatory relief efforts can be broken down into three major categories: 

  1. Reducing supervisory activities such as stress tests and bank examinations. 
  2. Delaying the implementation of new rules or laws. 
  3. Reducing reporting requirements.
Continue reading “Governments Provide Financial Regulatory Relief”

EarthDay50: Yale SOM Finance Faculty Write About Climate Finance

By: Electra Ferriello April 22, 2020
earth

Happy Earth Day! In honor of the 50th anniversary of Earth Day, we would like to share some of the recent research conducted by Yale SOM finance faculty about climate finance:   “Is the Risk of Sea Level Rise Capitalized in Residential Real Estate?” by Justin Murfin and Matthew...

Continue reading “EarthDay50: Yale SOM Finance Faculty Write About Climate Finance”

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”

US Begins Airline and Aviation Interventions

April 23, 2020

On April 20, the U.S. Treasury Department announced that it had finalized agreements with six major airlines—Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines—for $20.5 billion in assistance under the Payroll Support Program (PSP) established by the CARES Act. It said five other airlines plan to participate, which would bring participation to 95% of U.S. air carrier capacity.

Continue reading “US Begins Airline and Aviation Interventions”

Aviation Interventions Continue Internationally

April 23, 2020

Governments around the world have committed many billions of dollars to help the aviation sector survive the COVID-19 crisis. This aid comes in the form of grants, loans, loan guarantees, tax relief, and other subsidies. Some programs are targeted at specific firms and others provide broad-based support. The US is implementing what it expects to be the largest targeted package for the industry. Singapore's program appears to be the second most generous. 

Continue reading “Aviation Interventions Continue Internationally”

News in Systemic Risk: Thursday, April 23, 2020 (10 a.m. ET)

April 23, 2020

ECB takes steps to mitigate impact of possible rating downgrades on collateral availability (European Central Bank)

Insurance regulatory measures in response to Covid-19 (Jeffery Yong; Bank of International Settlements)

Longer-Run Economic Consequences of Pandemics (Oscar Jorda, Sanjay R. Singh, Alan M. Taylor; Federal Reserve Bank of San Francisco)

The Janus face of bank geographic complexity (Iñaki Aldasoro, Bryan Hardy and Maximilian Jager; Bank of International Settlements)

Bank portfolio risk profiles vs the zero lower bound (Johannes Bubeck, Angela Maddaloni, José-Luis Peydró; VoxEU)

More Coronavirus Aid to Small Businesses Is Coming, But It Might Not Be Enough (Amara Omeokwe; Wall Street Journal)

Continue reading “News in Systemic Risk: Thursday, April 23, 2020 (10 a.m. ET)”

The IMF Expands and Expedites Lending in Response to the COVID-19 crisis

April 22, 2020

Since March, the International Monetary Fund (IMF) has expanded existing lending programs and introduced new ones to help countries bear the costs of the COVID-19 crisis. As of April 21, it had approved a total of $8.7 billion in emergency financing for over 40 member countries, of the more than 100 countries that have requested assistance. (See the updated list here).

Continue reading “The IMF Expands and Expedites Lending in Response to the COVID-19 crisis”

Early Use of Federal Reserve Programs

April 22, 2020

After the COVID-19 crisis began, the Federal Reserve quickly announced a number of emergency lending facilities, largely based on programs it first introduced during the Global Financial Crisis of 2007-09 (GFC). These programs have varied in size and speed of implementation. Bank reserve balances at the Fed have reached a historic high in recent weeks, exceeding $3 trillion for the first time, suggesting banks could lend much more.

This post discusses the early use of the following Fed lending programs: (1) primary credit through the discount window, (2) central bank swap lines and FIMA repos, (3) the Money Market Mutual Fund Liquidity Facility (MMLF), (4) the Primary Dealer Credit Facility (PDCF), and (5) the Commercial Paper Funding Facility (CPFF). 

Continue reading “Early Use of Federal Reserve Programs”

Governments Provide Financial Regulatory Relief

April 22, 2020

The COVID-19 crisis has led governments across the world to temporarily ease the operational burden of  supervisory and regulatory activities on the financial institutions they regulate. These regulatory relief efforts can be broken down into three major categories: 

  1. Reducing supervisory activities such as stress tests and bank examinations. 
  2. Delaying the implementation of new rules or laws. 
  3. Reducing reporting requirements.
Continue reading “Governments Provide Financial Regulatory Relief”

EarthDay50: Yale SOM Finance Faculty Write About Climate Finance

By: Electra Ferriello April 22, 2020
earth

Happy Earth Day! In honor of the 50th anniversary of Earth Day, we would like to share some of the recent research conducted by Yale SOM finance faculty about climate finance:   “Is the Risk of Sea Level Rise Capitalized in Residential Real Estate?” by Justin Murfin and Matthew...

Continue reading “EarthDay50: Yale SOM Finance Faculty Write About Climate Finance”

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”