Federal Reserve System

"Too Big To Fail" Amendment Passes
November 19, 2009

That would be the dread Kanjorski amendment, which created a real uproar when the Pennsylvania congressman first announced it two weeks ago. According to Politico's Victoria McGrane, the measure isn't as hawkish as a lot of bank lobbyists feared at the time--for example, it doesn't lay out a set of criteria according to which the government would automatically break up large, interconnected firms.

The Right Way to Regulate
November 18, 2009

In the weeks ahead, Congress may finally provide American families with a seat at the financial regulatory table in Washington, D.C. If Congress passes the Consumer Financial Protection Agency (CFPA) Act of 2009, on which the House Financial Services recently reported favorably, it will establish, for the first time, a federal agency whose sole mandate is to evaluate financial products through the lens of consumer fairness.

Worth Reading
November 17, 2009

What will happen to Berkshire Hathaway after Warren Buffett dies? The best day to buy a car: Black Friday. Home prices in southern California tick upwards. Hong Kong says Fed policy is creating bubbles in its markets. The Boston Globe endorses Bill Belichick's 4th-down call.

Taming the Fed, Intelligently
November 11, 2009

The Chris Dodd proposal that has regulators and the Hill in an uproar (to say nothing of the banks) seems to contain the kernel of a very workable compromise.

Gordon Brown's Financial Shock and Awe
November 10, 2009

There are two broad views on our newly resurgent global bubbles--the increase in asset prices in emerging markets, fuelled by capital inflows, with all the associated bells and whistles (including dollar depreciation). These run-ups in stock market values and real estate prices are either benign or the beginnings of a major new malignancy. The benign view, implicit in Secretary Geithner’s position at the G20 meeting last weekend, is most clearly articulated by Frederic (Ric) Mishkin, former member of the Fed’s Board of Governors and author of "The Next Great Globalization: How Disadvantaged N

Worth Reading
November 10, 2009

Ex-Bear Stearns fund managers acquitted of subprime-related fraud charges. Why big news on diminishing oil supplies didn't move markets. Under Dodd's plan, commercial banks would lose ability to name Fed directors. Mark Thoma has a new blog. Treasury a little too selective in releasing loan modification stats.

Worth Reading
November 09, 2009

Fred Mishkin: Fed shouldn't worry about asset bubbles right now. Inflation expectations have returned to a historically normal range. Study: A higher minimum wage can reduce obesity. Dallas Fed: Don't blame protectionism for the decline in global trade. Banks just as happy buying Treasuries as making loans.

Another Step Closer to Breaking Up the Banks?
November 05, 2009

A banking industry lobbyist I spoke with this evening alerts me to a fascinating development in the House Financial Services Committee: Pennsylvania Rep. Paul Kanjorski is about to introduce an amendment to the systemic risk bill moving through the committee (see my discussion here and here) that would give regulators the power to break up too-big-to-fail firms. The details are a little unclear--as it stands, the current bill would give the Fed some vague powers in this vein. But the soon-to-be Kanjorski amendment appears to go much further, and the banks are freaking out about it.

Worth Reading
October 30, 2009

Steve Levitt gets no love from his own school. Top CEOs summoned by the Fed over pay. Krugman and Sumner agree, for once: The GDP numbers need to get a lot higher. Cowen on the foreign-ization of academic economics. Dan Gross: Reports of newspapers' death greatly exaggerated.

'Too Big' Banks Won't Disappear On Their Own
October 29, 2009

That's the conclusion of a new St. Louis Fed study by David Wheelock and Paul Wilson. In the two decades between the mid-80's and 00's, the number of commercial banks fell by 50% while the average size per institution surged by an inflation-adjusted 500%.