Brookings: Experts - Martin Neil Baily

Telling the Narrative of the Financial Crisis: Not Just a Housing Bubble

Mon, 23 Nov 2009 00:00:00 GMT

What really caused the great economic crisis of the past year? Should the Fed’s powers be stripped away, per legislation sponsored by Rep. Ron Paul that recently passed the House Financial Services Committee? In an effort to help inform the debate, Brookings Fellow Douglas Elliott and Senior Fellow Martin Baily ponder the importance of public perceptions of the causes of the crisis - and how they will affect chances of financial regulatory reform.

What Should be Done About Bank Size?

Mon, 19 Oct 2009 00:00:00 GMT

In light of the debate over whether the Obama administration's plan for financial regulation goes far enough to curb institutions that become "too big to fail," Martin Baily addresses the question of whether any regulation of "systemic risk" will inevitably lead to the designation of some banks as "too big to fail."

Fed Should Focus on Macro, not Micro

Mon, 19 Oct 2009 00:00:00 GMT

Amid White House efforts to revamp financial sector regulations—including creation of a new oversight agency—Martin Baily argues that the Federal Reserve should not take over this responsibility. The Fed, he says, is in a unique position to take on the macro side of prudential regulation—that of the systemic risk regulator, a responsibility that would well suit its purview of the overall stability and performance of the macro economy.

Consumer Financial Protection: Advantages, Dangers and Should it be a New Agency?

Wed, 30 Sep 2009 00:00:00 GMT

Martin Baily argues that if there had been better consumer protection prior to the financial crisis, it would have ameliorated the severity of the crisis and might even have forestalled it. The best choice for the United States is a single conduct-of-business regulator and the Securities and Exchange Commission is the natural home for such a consumer protection agency.

Strengthening and Streamlining the Federal Supervision of Financial Institutions

Tue, 29 Sep 2009 00:00:00 GMT

Martin Baily testified before the Senate Banking Committee on the creation of a single micro prudential regulator, combining the regulatory and supervisory functions now carried out by the Fed, the OCC, the OTS, the SEC and the FDIC. He calls attention to the Australia model as a good positive example where a single prudential regulator has worked well.

What Does International Experience Tell Us About Regulatory Consolidation?

Mon, 21 Sep 2009 00:00:00 GMT

Examining the structure of financial regulation to see what lessons there may be for the United States, Martin Baily and Adriane Fresh dispel the idea that the experience of other countries makes it a waste of time to attempt substantial consolidation of regulatory agencies in the United States.

Responding to Professor Krugman's Opus

Tue, 08 Sep 2009 00:00:00 GMT

Martin N. Baily responds to the National Journal’s question regarding a recent New York Times Magazine column from Paul Krugman entitled, “How Did Economists Get it So Wrong?” in which Krugman argues that the recession points to a muddy future for economic theory and a greater legitimacy for behavioral economics.

Strengthening and Streamlining Prudential Bank Supervision

Thu, 06 Aug 2009 00:00:00 GMT

Financial sector regulation was one of several causes of the financial crisis that has devastated the U.S. economy and spread globally. We can do better than the current bewildering alphabet soup of regulators, says Martin Baily, by simplifying and streamlining regulation into a single micro prudential regulator.

Bernanke Signals Slow Recovery, Defends Fed's Powers

Wed, 22 Jul 2009 00:00:00 GMT

Federal Reserve Chairman Ben Bernanke told a Senate panel on Wednesday that economic recovery should begin soon, albeit slowly at first. Martin Baily and New Jersey Republican Congressman Scott Garrett spoke with Ray Suarez about the testimony.

Give the Stimulus a Chance to Work

Mon, 06 Jul 2009 00:00:00 GMT

It is premature to say that the nearly $890 billion stimulus package is not working, purely based on the latest unemployment data. Martin Baily argues that the Obama administration's stimulus package was a good one, even if slow to hit the ground. The good news is that its main impact is still to come, and it is still needed because the recession is far from over.

Bernanke Faces New Questions Over Role of the Fed

Thu, 25 Jun 2009 00:00:00 GMT

Federal Reserve Chairman Ben Bernanke faced fresh questions from a House committee Thursday over the central bank's role facilitating Bank of America's purchase of Merrill Lynch. Martin Baily discusses the Federal Reserve's future role with Jeffrey Brown on NewsHour.

The U.S. Financial and Economic Crisis: Where Does It Stand and Where Do We Go From Here?

Mon, 15 Jun 2009 00:00:00 GMT

The economy is showing signs that it is likely bottoming out and heading toward a weak recovery, but we need to keep our optimism—and our policy actions—in check, argue Martin Baily and Douglas Elliott. Many risks remain for both the banking system and the larger economy, and they argue for increased focus on existing financial rescue plans and the banking sector.

Regulating and Resolving Institutions Considered “Too Big to Fail”

Wed, 06 May 2009 00:00:00 GMT

In testimony to the Senate Banking Committee, Martin Baily and Robert Litan discussed the "too big to fail" conundrum, saying large institutions are necessary but must be regulated in a way that at least partially offsets the risks they pose to the rest of the financial system. They also say Congress needs to provide more Treasury TARP funds, maybe on a large scale, but that such a move will ultimately cost less than bank nationalization.

Moving Money : The Future of Consumer Payments

Fri, 01 May 2009 00:00:00 GMT

In Moving Money, noted economists Robert Litan and Martin Baily bring together a group of distinguished analysts to examine this trend toward digital means of consumer payment.

What Will It Take to Stabilize the Banks?

Tue, 17 Mar 2009 00:00:00 GMT

In this article Martin Baily and Douglas Elliott discuss what it will take to stabilize the banks. They call for an adequate amount of capital to be injected into the banks and for the troubled assets be moved out of the banks or their impact neutralized. They agree that both of these actions will be very expensive for the taxpayers, involving significant risk of large future losses, but warn that the costs of stabilizing the banks will be very large indeed, and the sooner policymakers face up to that, the better.

Fixing the Financial System

Fri, 20 Feb 2009 10:20:10 GMT

As policymakers and the public have been focused on the stimulus and the bank bailout, there remain tough policy questions about how to get at the root cause of the current economic problems – how to fix the financial system for the long-term. Director of the Initiative on Business and Public Policy Martin Baily discusses Fixing Finance: A Roadmap for Reform, laying out the long-term issues.

Fixing Finance: A Roadmap for Reform

Mon, 16 Feb 2009 00:00:00 GMT

As policy-makers and the public have been focused on the stimulus and the bank bailout, tough policy questions about how to get at the root cause of the current economic problems remain—how to fix the financial system for the long-term. Martin Baily and Robert Litan lay out a roadmap for reform, one that harnesses the forces of market discipline that were ignored in the run-up to the current crisis, which they say can and must be retained after the need for massive short-run government intervention has passed.

Banking Sector, Bailout Reform May Top Obama Economic Agenda

Wed, 21 Jan 2009 00:00:00 GMT

Treasury nominee Timothy Geithner went before a Senate panel Wednesday, answering questions on the financial crisis as well as his tax payment controversy. Martin Baily and other analysts mull what's ahead for Obama's economic agenda on NewsHour.

Let the Bank Bailout Work

Thu, 15 Jan 2009 00:00:00 GMT

Martin Baily and Charles Schultze say the criticisms of Treasury’s handling of the first $350 billion of the Troubled Asset Relief Program (TARP) are misguided and that Congress should release the second $350 billion immediately with reasonable, enforceable rules. They say the program should be measured on the problems it has prevented from happening, and that the new funds should be used for their intended purpose: bank recapitalization to limit further contraction of lending.

Memo to the President: Rebuild Financial Institutions and Confidence

Thu, 11 Dec 2008 00:00:00 GMT

The economy is the number one concern in the minds of main street Americans. The $700 billion bailout package was aimed at rebuilding financial institutions, but it is now up to the new president to restore confidence in consumers and workers.

The Origins of the Financial Crisis

Mon, 24 Nov 2008 00:00:00 GMT

In the third installment of the Fixing Finance series, Martin Baily, Robert Litan and Matthew Johnson conduct a thorough analysis of the origins of the financial crisis. They conclude that the crisis had its origins in an asset price bubble that interacted with new kinds of financial innovations that masked risk, with companies that failed to follow their own risk management procedures, and with regulators and supervisors who failed to restrain excessive taking.

Main Street Needs a New Stimulus

Tue, 21 Oct 2008 00:00:00 GMT

Martin Baily recommends an immediate stimulus package of $200 billion, with preparation of an additional $100 billion to be triggered if unemployment goes over 7.5 percent to prevent the U.S. economy from trending further into the danger zone.

Fed Chairman Signals Support for New Stimulus Package

Mon, 20 Oct 2008 00:00:00 GMT

Wall Street saw a boost Monday as Fed Chairman Ben Bernanke told Congress that a second stimulus bill might help the economy. Martin Baily and William Beach examine the prospects for a new stimulus plan.

Ideas for a Second Stimulus

Mon, 20 Oct 2008 00:00:00 GMT

In testimony before the House Budget Committee, Martin Baily says we need a second fiscal stimulus package to avoid a deep recession. He advocates for an immediate infusion of $200 billion, with a second $100 billion released if unemployment hits 7.5 percent. The package should include help for homeowners, tax rebates for families and aid to states and localities.

Making the Rescue Package Work: Asset and Equity Purchases

Fri, 10 Oct 2008 00:00:00 GMT

With fears of a global recession pounding markets worldwide, many are watching closely to see if the U.S. Treasury can quickly implement the recent bailout package in a way that stabilizes the financial markets and unfreezes credit. Brookings experts Martin Baily and Robert Litan take a look at the Treasury Department’s chances of success and argue that the omens thus far are “not encouraging."

Lessons From the Financial Crisis

Mon, 06 Oct 2008 00:00:00 GMT

As part of our ongoing series covering the financial crisis, Martin Baily, director of IBPP delivered a presentation at the NABE Meeting on October 6, 2008 on the cause of the current financial crisis and the domino effect that permeated the financial markets, and provided measures to be implemented to prevent another financial institution meltdown.

The Failed Economic Bailout

Tue, 30 Sep 2008 09:52:17 GMT

As lawmakers scramble to figure out next moves on the financial crisis after the House voted down the rescue package, Martin Baily urges Congress to takes steps to avert a “nasty recession.” Although the actions in Washington are to shore up financial markets in New York, Americans everywhere have a lot at stake.

A Brief Guide To Fixing Finance

Mon, 22 Sep 2008 00:00:00 GMT

Martin Baily and Robert Litan analyze the long-term implications of recent and proposed government efforts to stabilize the markets and the economy at large. As Congress considers legislation this week, Baily and Litan stress the importance of understanding how and why the dominoes fell, and most important, they advocate important systemic fixes: transparency, institutional liquidity and better oversight and tools given to regulators.

The Great Credit Squeeze: How It Happened, How to Prevent Another

Fri, 16 May 2008 00:00:00 GMT

With the U.S. financial system still in a perilous state, Martin Baily, Doug Elmendorf and Bob Litan diagnose what caused the crisis and offer prescriptions for policy change. The authors of this new Brookings paper address two challenges: to resolve the immediate problems and to reduce the likelihood that these problems recur.

Don’t Blame the War for the Economy

Sun, 20 Apr 2008 00:00:00 GMT

Martin Baily says that while many voters view the war in Iraq and the poor state of the economy as a cause and effect relationship, they are, in fact, two very different messes.

Productivity and Potential Growth in the United States and Europe

Fri, 08 Feb 2008 00:00:00 GMT

At the request of the European Central Bank, Martin N. Baily presented his work at a conference in Frankfurt, in January 2008. His work examined productivity and potential growth in the United States and the European Union for the whole economy and by industry. This is a PDF of Martin Bailey's PowerPoint presentation.

U.S. Services Trade and Off-Shoring

Fri, 16 Nov 2007 00:00:00 GMT

Deregulation, new technologies and expanded international trade and investment have intensified global competition. Martin Neil Baily explained at a recent symposium that this trend may be a cause for concern, but—given the current U.S. trade surplus in services—it may be a positive thing for employment.

Brookings Papers on Economic Activity, Microeconomics 1989

Tue, 23 May 1989 00:00:00 GMT

For almost thirty years, Brookings Papers on Economic Activity (BPEA) has provided academic and business economists, government officials, and members of the financial and business commmunities with timely research of current economic issues.