Brookings: Topics - Banking

Evaluating the Economy and the Possibility of a "Double Dip" Recession

Thu, 19 Nov 2009 14:35:00 GMT

The economy is showing some bright spots, but rising unemployment, weak consumer spending and the housing market continue to be concerns. Robert Litan examines the state of the economy and offers insights into job creation and entrepreneurship, the possibility of a “double dip” recession and higher capital requirements for lending institutions.

Fixing the Financial Sector in the Wake of the Economic Crisis

Mon, 16 Nov 2009 10:37:21 GMT

Sen. Christopher Dodd (D-Conn) has introduced legislation to reform the financial sector in the wake of the recent economic crisis. Senator Dodd’s proposal calls for consolidating the four federal financial regulatory agencies into a single regulator. Fellow Douglas Elliott says regulation consolidation is definitely in order.

Dodd’s Single Banking Regulator Proposal Promising

Tue, 10 Nov 2009 00:00:00 GMT

Senate Banking Committee Chairman Christopher Dodd is introducing legislation to consolidate banking regulation into one federal agency. Doug Elliott says having one regulator for “safety and soundness” and another focused on consumer protection is promising, should help avoid regulatory arbitrage and could hopefully prevent another financial crisis.

The Stock Market Crash and Our Current Recession

Mon, 02 Nov 2009 12:00:00 GMT

This month marks 80 years since the Wall Street crash of 1929 that was one cause of the Great Depression. Alice Rivlin says the 1929 crash led to the creation of the financial and social safety net measures that have helped prevent today's economic crisis from being a full-blown depression.

Initial Comments on the Draft House Bill on Systemic Risk and “Too Big to Fail”

Wed, 28 Oct 2009 00:00:00 GMT

As the financial system continues to stabilize, the House Financial Services Committee has drafted legislation intended to prevent future crises. The latest bill, which has been endorsed by the Obama administration, focuses on systemic risk and financial institutions that are deemed to be “too big to fail.” Douglas Elliott analyzes the 253-page bill, saying he thinks the enhanced resolution authority is essential, but he raises serious concerns about the structure of the council intended to tackle systemic risks.

Pay Limits: Not Smart

Fri, 23 Oct 2009 00:00:00 GMT

The Obama administration’s pay czar imposed limits on executive compensation for bailed-out Wall Street firms. Doug Elliott says the actions are not smart, sending the message to those employees that their pay will not be determined the same way as on the rest of Wall Street and will be considerably lower and more volatile. This risks losing the best people, since the ones that move are always those who have the best options elsewhere.

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."

What About Microeconomics?

Mon, 05 Oct 2009 00:00:00 GMT

Robert Crandall and Clifford Winston respond to Paul Krugman's recent New York Times Magazine article which laments the current state of macroeconomics. The authors call attention to the fact that Krugman did not mention the state of microeconomics which, they argue, has not suffered any serious intellectual setbacks from the current Great Recession.

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.

Prudent Lending Restored : Securitization After the Mortgage Meltdown

Tue, 15 Sep 2009 00:00:00 GMT

Prudent Lending Restored offers suggestions on how we can reform securitization, including a solution to insure the mortgage market against default risk.

A Year in Turmoil: An Address By Fed Chairman Ben Bernanke

Tue, 15 Sep 2009 10:00:00 GMT

Event Information:

September 15, 2009, 10:00 AM to 12:00 PM

This week marks the one-year anniversary of Lehman Brothers' collapse. Federal Reserve Chairman Ben Bernanke delivered a keynote about the tumultuous events of last September at a Brookings forum on Tuesday. Brookings Vice President Karen Dynan moderated a panel with other experts on the state of financial markets and regulatory reform.

Are Bailout Investments Paying Off?

Mon, 31 Aug 2009 00:00:00 GMT

Senior Fellow Douglas Elliott talks with Kai Ryssdal about how the Treasury has made close to $4 billion from its bank bailout, and whether it's actual profit.

Monetary Policy Challenges for Emerging Market Economies

Wed, 19 Aug 2009 00:00:00 GMT

The debate between theorists and practitioners on monetary policy challenges for emerging market economies continues. This paper by Brookings expert Eswar Prasad, Gill Hammond, and Ravi Kanbur addresses the dialogue between academics and policymakers on this issue and sets an agenda for further research.

Is the U.S. Economy Stabilizing?

Mon, 10 Aug 2009 12:39:31 GMT

Since crashing last October, with a continuing free fall for much of the first part of 2009, the stock market has been gradually climbing back up to healthier levels. Douglas Elliott says the market rally is one sign that the economy is stabilizing – at least in the near term.

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.

Evaluating TARP and Our Economic Outlook

Mon, 27 Jul 2009 11:10:18 GMT

Treasury’s special inspector general issued a blistering report about the $750 billion TARP program, saying it has not been transparent in managing taxpayers’ money and hasn’t required enough disclosure from firms participating in the program. Douglas Elliott says despite the report, the TARP program appears to have prevented a financial meltdown, adding that the economy is showing some small signs of improvement.

Sky’s the Limit? National and Global Implications of China’s Reserve Accumulation

Tue, 21 Jul 2009 00:00:00 GMT

While the financial crisis slowed the pace of foreign exchange reserve accumulation in late 2008, growth has recently taken off again. China announced its stock of reserves crossed the astounding milestone of $2 trillion this spring. Eswar Prasad and Isaac Sorkin analyze the sources and patterns of reserve accumulation and examine what implications this reserve buildup has for the Chinese and global economies.

Stable Banks, Stable Finance: The Canadian Experience

Tue, 23 Jun 2009 08:30:00 GMT

Event Information:

June 23, 2009, 8:30 AM to 11:00 AM

As banking and financial systems in the United States, Europe, and around the world have been shaken to their foundations over the past two years, Canada’s banking and overall financial system has proven sound and stable. On June 23, Brookings and the Woodrow Wilson Center's Canada Institute will host an examination of Canada’s overall financial system, particularly its approach to financial market regulation, and explore potential lessons for other countries.

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.

Do Post-Bailout Banks Need New Rules?

Tue, 09 Jun 2009 00:00:00 GMT

The Treasury Department has cleared the way for 10 big banks to start repaying $68.3 billion in taxpayer aid. The administration, however, plans to introduce new compensation guidelines that would apply to financial companies, including those that returned taxpayer money. What new federal restrictions, if any, should be imposed on the banks leaving TARP? More broadly, does this move by the Treasury Department show that its financial recovery programs are working? Douglas Elliott and other experts discuss these issues.

Addressing Ohio's Foreclosure Crisis: Taking the Next Steps

Fri, 05 Jun 2009 00:00:00 GMT

Facing the worst foreclosure crisis since the Great Depression, the state of Ohio has responded by focusing on helping individuals keep their homes. Ohio must direct more attention and more resources to the devastating effects that foreclosures are having on entire communities, from the urban neighborhoods of Cleveland or Cincinnati to suburban and rural communities across the state.

The Global Economic Crisis and Mexico: Challenges for Recovery

Thu, 28 May 2009 00:00:00 GMT

As part of the "Global Economic Crisis" study series, Martinez- Diaz spoke at the Center for National as part of a discussion focused on the impact of the global economic crisis on stability in Mexico and what that means for the United States. He outlined five crucial economic challenges facing the country that its leadership must address in order to stimulate a full and sustainable recovery.

Bank Stress Test Results

Tue, 12 May 2009 00:00:00 GMT

All in all, the stress tests were useful and the results were encouraging, says Douglas Elliott. However, we have a lot of pain to get through before this crisis is over. If we're lucky, he says, it will remain bad for awhile. If we're unlucky, it could still get extremely ugly.

Implications of the Bank Stress Tests

Mon, 11 May 2009 00:00:00 GMT

Although there was good news from the Fed’s recent “stress tests” on the 19 largest banks, it is important to not take excessive comfort from what remains essentially a highly educated guess as to the future of the banks in a very uncertain environment, says Douglas Elliott. While we may well have turned the corner, we can be far from certain that the solvency crisis in banking is over.

Stress Test Loan Losses and Profit Expectations: A Comparison

Fri, 08 May 2009 00:00:00 GMT

Doug Elliott analyzes the banking regulator’s stress test results by comparing them with other detailed analyses of the financial state and prospects of the banks, finding that the government's assumptions are more conservative than the IMF's, but less than the pessimists'. But he notes the real stress test will be comfortably surviving 2009 and 2010.

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.

Interpreting the Bank Stress Tests

Mon, 04 May 2009 00:00:00 GMT

The Obama administration has released the long-awaited results of the bank stress tests, saying some have enough capital to weather the recession, while others receive a regulatory blessing. Douglas Elliott says there is some good news, but not to overinterpret until we know the tests’ rigor. The real stress test will be making it through 2009 and 2010 without losing too much money.

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.

Bank Nationalization: A Survival Manual

Tue, 21 Apr 2009 00:00:00 GMT

Several prominent economists continue to push for the government to nationalize the nation’s weakest banks before they bleed the Treasury and taxpayers dry. Douglas Elliott says nationalization is risky and costly and therefore should be the last resort, but policymakers need to be ready in case it is needed. He writes a 15-step “survival manual” with suggestions for minimizing the damage from nationalization, especially the costs to taxpayers.

The Financial Crisis and the Rule of Law

Tue, 14 Apr 2009 00:00:00 GMT

Close political ties between Wall Street and the government played a sizeable role in creating a regulatory environment in which financial institutions became dangerously over-exposed to risk. Wall Street firms whose behavior helped create the world-wide crisis are now working diligently to prevent regulatory changes that can help restore the financial system to long-term health, notes Gary Burtless. However, he disagrees with some observers who say bank nationalization is the answer.

Why Geithner’s Plan is the Taxpayers’ Curse

Wed, 01 Apr 2009 00:00:00 GMT

H. Peyton Young shows that the Geithner proposal for pricing toxic assets is a peculiar type of auction in which the taxpayer is cursed by competition among the buyers. The more that investors compete, the lower are the expected returns for the taxpayers. Naturally, the windfall goes to the banks.

Facing—and Fixing—"Too Big to Fail"

Tue, 31 Mar 2009 09:15:00 GMT

Event Information:

March 31, 2009, 9:15 AM to 11:30 AM

As public outrage grows over bonuses paid to employees at private firms being bailed out by the government, many are asking whether some companies are "too big to fail" and the consequences of propping up firms at any cost. The Initiative on Business and Public Policy at Brookings hosted Minneapolis Federal Reserve President Gary H. Stern and Vice President Ron J. Feldman to discuss the issue, along with former Federal Reserve Chairman Alan Greenspan.

Three Cheers for Treasury’s Plan for Regulating Systemic Risk

Mon, 30 Mar 2009 00:00:00 GMT

Robert Litan discusses the Treasury’s six part plan for significantly reducing systemic risk in the financial system. He says the six elements in the Treasury plan, if enacted into law, should significantly reduce the likelihood of single or multiple failures of systemically important financial institutions in the future, as well as the losses to taxpayers for protecting their creditors.

Regulating Systemic Risk

Mon, 30 Mar 2009 00:00:00 GMT

The Treasury Department recently released its plan to fix the financial system, which rightly concentrates on reducing systemic risk, argues Robert Litan. While there are legitimate concerns about vesting such large responsibilities with any financial regulator, as long as there are financial institutions whose failure could lead to calamitous financial and economic consequences, then some arm of the federal government must oversee systemic risk and do the best it can to make that oversight work.

Japan’s Lost Decade: Lessons for the United States

Thu, 26 Mar 2009 09:00:00 GMT

Event Information:

March 26, 2009, 9:00 AM to 12:20 PM

On March 26, the Center for Northeast Asian Policy Studies and the Initiative on Business and Public Policy at Brookings, in collaboration with Nikkei and the Japan Center for Economic Research, hosted leading Japanese and American experts to discuss Japan's experience and its lessons for the United States.

Pre-emptive Bank Nationalization Would Present Thorny Problems

Wed, 25 Mar 2009 00:00:00 GMT

A number of prominent observers continue to call for a swift nationalization of the nation’s weakest banks. Douglas Elliott argues that while nationalization would provide an appealing emotional catharsis and has some advantages, the harm would be greater. Nationalization would be costly, difficult and risky. Elliott walks through the initial step of taking over a major banking group and demonstrates the problems that lie therein.

The Public-Private Investment Program: An Assessment

Mon, 23 Mar 2009 00:00:00 GMT

Treasury Secretary Timothy Geithner’s plan announced on Monday to move some $1 trillion in toxic assets off of the balance sheets of the banks helps remove the uncertainty from the financial system although it will not fix the credit crisis on its own, according to Douglas Elliott. Strong concerns remain about whether the Public Private Investment Program (PPIP) will succeed—the program could either fizzle or prove to be too expensive for the taxpayer—but there are also some grounds for hope.

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.

From the G-20 to AIG: The Unfinished Turmoil in Global Banking and Finance

Mon, 16 Mar 2009 00:00:00 GMT

In an interview with NPR's On Point, scholars Eswar Prasad and Kenneth Rogoff discuss the current banking and global finance issues, and the importance of global leadership as the G-20 Summit approaches.

A G-20 Insurance Solution for Global Imbalances

Tue, 10 Mar 2009 00:00:00 GMT

What would help governments move beyond short-term solutions to the financial crisis and towards efforts to regain global financial stability? Eswar Prasad proposes creating an insurance pool for the Group of 20 largest economies in order to reduce incentives for reserve buildups and help focus policymakers on the international consequences of domestic actions.

Barack's Too-Long Wish List: How the President Should Focus His Agenda

Tue, 10 Mar 2009 00:00:00 GMT

Like Presidents Reagan and Carter, Obama has an ambitious agenda for the nation. But will President Obama be as successful in pushing his agenda as Reagan, or as unsuccessful as Carter? Surprisingly, a key indicator of success is not early economic performance. As Brookings expert William Galston writes, the core issue is clarity and self-discipline, to deal with only a relatively small number of issues at a time. Thus, President Obama needs to focus his considerable leadership and communication skills on the financial crisis.

Bank Capital and the Stress Tests

Tue, 03 Mar 2009 00:00:00 GMT

The administration’s new “stress tests” for the 19 largest banks will likely result in substantial new infusions of government money to bolster their capital. Douglas Elliott explains what “capital” is; how to measure whether a bank has enough of it; and what the stress test and capital proposals are. He applauds these actions as “right on virtually all counts.”

Crisis in Eastern Europe: Manageable – But Needs to Be Managed

Sat, 28 Feb 2009 00:00:00 GMT

In a new opinion article, Erik Berglöf makes recommendations to EU leaders on how to stave off a further deepening of the financial crisis in the emerging economies of Eastern Europe, addressing capital demands and the role of banks.

Bank Nationalization: What Is It? Should We Do It?

Wed, 25 Feb 2009 00:00:00 GMT

Bank nationalization—the topic du jour in Washington and on Wall Street—means different things to different people. Although nationalization is a serious and extreme step with high social and financial costs, Douglas Elliott believes full nationalization may be needed only as a last resort for one or two of the nation’s larger banks, with more widespread nationalization unlikely. But, he says, it may make sense for the government to partially nationalize additional large banks now, in an effort to bring some certainty to the markets.

Latin America, the Global Financial Crisis and the Velocity of Business

Wed, 11 Feb 2009 00:00:00 GMT

As the effects of the financial crisis continue to be felt across the globe, much of Latin America should be well prepared to weather the global financial storms with more opportunity for growth. In a speech at the Economist's 11th Annual Conference on Latin America Private Equity, held in Miami Florida, Mauricio Cárdenas discusses how the United States and Latin American countries can work together, not only on financing and aid, but also on issues like trade, migration, energy, and climate change.

The Administration’s New Financial Rescue Plan

Tue, 10 Feb 2009 00:00:00 GMT

Doug Elliott critiques the Obama administration’s new rescue plan for the banking sector announced on February 10, saying he agrees on the need for significant new capital injections, despite their political unpopularity, but argues that it is not at all clear that the proposed “bad bank” could be designed in a way that would make it better than simply guaranteeing toxic assets on the books of the banks. Elliott writes that the devil will indeed be in the details of the construction of the bad bank and the pricing mechanisms.

Stabilizing Communities: A Federal Response to the Secondary Impacts of the Foreclosure Crisis

Tue, 03 Feb 2009 00:00:00 GMT

The wave of home mortgage foreclosures that began in 2006 continues to surge, greatly destabilizing neighborhoods, towns, and cities across the United States. However, the federal government has played a limited role to date in blunting its effects. This Blueprint policy brief argues for carefully-targeted federal policies to assist states and localities in mitigating the community-level impacts of foreclosure, and creating the conditions for ultimate housing market recovery.

“Bad Bank”, “Nationalization”, “Guaranteeing Toxic Assets”: Choosing Among the Options

Thu, 29 Jan 2009 00:00:00 GMT

The new administration and Congress soon will be debating how to spend the TARP’s second $350 billion—and possibly even more—to stabilize the financial system. Douglas J. Elliott explains three approaches: establishing a “bad bank”; guaranteeing toxic assets; and nationalizing one or more banks, and recommends the “least bad option”—a combination of toxic asset guarantees and a mild form of nationalization.

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: Restore Global Financial Stability

Fri, 09 Jan 2009 00:00:00 GMT

America faces a profoundly altered financial landscape and a rapidly shifting world economic order. To meet the challenges of maintaining strong domestic economic growth and restoring global financial stability, we need a national agenda that tackles a broad range of domestic economic policy issues and promotes constructive engagement with the global economy.

Getting Through the Economic Meltdown

Wed, 24 Dec 2008 11:54:50 GMT

Despite the Fed’s historic actions, the economy is still ailing. Barry Bosworth says fiscal policy needs to be the next step: expenditures are important, with tax cuts being the quickest way to stimulate the economy.

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.

Rebuild Financial Institutions and Confidence

Thu, 11 Dec 2008 10:00:00 GMT

Event Information:

December 11, 2008, 10:00 AM to 11:30 AM

On December 11, Brookings hosted the sixth of 12 events to provide timely policy recommendations and political advice to the incoming president and his transition team. Brookings Senior Fellow Martin Baily offered policy solutions and priorities for the president-elect on the financial meltdown and the struggling housing market.

Repairing a Frayed TARP

Tue, 09 Dec 2008 00:00:00 GMT

Sarah Binder and Mark Spindel suggest that Congress should amend the $700 billion Troubled Assets Relief Program in several ways, including a rewrite of the conditions put on institutions that take TARP dollars. It is not too late to fix the mistakes made in the rush to enactment, they write.

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.

Paulson Shifts Economic Rescue Plan to Focus on Boosting Credit

Wed, 12 Nov 2008 00:00:00 GMT

Alice Rivlin and other economists discuss Treasury Secretary Henry Paulson's announcement Wednesday that the government will shift its focus from buying troubled assets to shoring up institutions that manage credit cards, auto loans and other types of borrowing.

Checking in on the Bailout Package

Mon, 27 Oct 2008 00:00:00 GMT

Three weeks after the $700 billion bailout, Kai Ryssdal of Marketplace chats with Doug Elmendorf about the bailout and who's lining up to get their share.

Shoring Up the Economy

Tue, 14 Oct 2008 16:24:38 GMT

The federal government’s decision to take equity stakes in private banks to help shore up the battered economy is a step in the right direction, Barry Bosworth says, and he adds that more needs to be done – particularly on the housing front.

International Cooperation for the Financial Crisis

Thu, 02 Oct 2008 00:00:00 GMT

Ralph Bryant discusses the possibility of the U.S. financial crisis spreading to the international exchange rate markets, and proposes specific actions for central banks to take, including ongoing and enhanced cooperation on a global scale, coordinated monetary policy action and improvement of standards.

Lessons from Another Crisis: Why Providing Debt Relief for Households is Not a Good Idea

Tue, 30 Sep 2008 00:00:00 GMT

As the financial crisis has widened, some analysts have asked the U.S. government to consider debt relief for American families who are struggling with mortgages they can no longer afford. Mauricio Cardenas explains how a previous crisis in Colombia offers lessons for the U.S. and argues that U.S. government debt relief is a bad idea.

Emerging Lessons from the U.S. Financial Crisis

Thu, 25 Sep 2008 00:00:00 GMT

As other emerging markets watch the U.S. financial crisis with caution, they might be even more wary to adopt the free-market principles that guided the development of the U.S. financial markets. Eswar Prasad argues that this is the wrong lesson to take from the crisis, however, and urges emerging markets to instead learn from the U.S. lessons on fraud, corruption, and government interference and regulation.

The Financial Crisis and Emerging Markets

Wed, 24 Sep 2008 00:00:00 GMT

As the U.S. financial crisis continues to unfold, what is the likely impact on emerging markets, such as China, India and Brazil? Eswar Prasad and M. Ayhan Kose release new research examining economic decoupling between industrial and emerging markets and discuss the likely effects of the crisis.

Financial Disaster: What Role for Congress?

Tue, 23 Sep 2008 00:00:00 GMT

Given the slew of questions that have been raised about the $700 billion bailout of Wall Street firms, Congress is right to reject open-ended grants of power at untold cost, writes Sarah Binder. But, if Congress fails to grant new powers to the Treasury, it risks deepening—and being blamed for—the greatest financial crisis since the Depression. Binder offers basic ground rules on how Congress should proceed.

Can Latin American Economies Deflect the Financial Crisis?

Mon, 22 Sep 2008 00:00:00 GMT

The U.S. financial crisis has profound implications for emerging markets given the integrated and global nature of today’s economy. Mauricio Cardenas, director of Brookings’s Latin America Initiative, examines the likely impact on Latin American economies and discusses how they might deflect some of the aftershocks from the U.S. economic crisis.

America Will Need a $1,000Bn Bail-out

Wed, 17 Sep 2008 00:00:00 GMT

As the financial sector continues to suffer and the crisis grows deeper, Ken Rogoff examines the future costs of fixing the U.S. system and explores issues of regulation and the strength of the U.S. economy in a globalized context.

Addressing the Housing and Financial Market Crises

Tue, 16 Sep 2008 17:03:01 GMT

At a Brookings conference on consumer payments, sponsored by the Initiative on Business and Public Policy, David H. McCormick, under secretary for international affairs at the U.S. Treasury Department, addressed the current difficulties in U.S. financial and housing markets. "We are ... confident," said McCormick, "in the resilience and diversity of the U.S. economy and that we will move through these difficulties, just as we have moved through difficult periods in the past."

Do Central Banks Have an Exit Strategy?

Mon, 15 Sep 2008 00:00:00 GMT

A year into the global financial crisis, several key central banks remain exposed to their countries’ shaky private financial sectors. In a new op-ed, Ken Rogoff explains why central banks must pull the plug sooner or later and how banks should approach regulation and view the market.

Crisis on Wall Street

Mon, 15 Sep 2008 16:43:54 GMT

Lehman Brothers declared bankruptcy; the federal government took control of AIG; and Merrill Lynch was bought out by Bank of America. Douglas Elmendorf examines the current situation on Wall Street and what it could mean for Main Street, and notes that the next president could face tremendous economic challenges.

Mortgaged to the World

Tue, 29 Jul 2008 00:00:00 GMT

Martin Mayer argues that Congress has given the Bush White House yet another chance to operate outside the Constitution by giving Treasury Secretary Henry Paulson the go-ahead for his two-part plan to salvage Fannie Mae and Freddie Mac, the government-sponsored mortgage companies — a blueprint that violates fundamental American principles in two worrisome ways.

Progress in Emerging Markets is Being Put at Risk

Fri, 18 Jul 2008 00:00:00 GMT

While still struggling to understand how to regulate sophisticated financial systems, the world has had more success with managing less sophisticated ones, yielding impressive achievements in emerging market financial systems. Brookings Scholar Erik Berglöf and University of Chicago, Graduate School of Business professor Raghuram Rajan recommend the correct response in emerging markets to the global crisis should be to accelerate reforms that strengthen the financial and regulatory infrastructure.

Tackling the Mortgage Crisis: 10 Action Steps for State Government

Thu, 29 May 2008 00:00:00 GMT

The mortgage foreclosure crisis has become an issue of growing concern over the past two years, particularly in many older industrial communities. Alan Mallack proposes a set of 10 action steps that state leaders can take to help mitigate its impact on families and neighborhoods—and prevent a similar situation from occurring in the future.

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.

How the Great Credit Squeeze Happened and How to Prevent Another

Fri, 16 May 2008 10:00:00 GMT

Event Information:

May 16, 2008, 10:00 AM to 12:00 PM

How could America's sophisticated financial system go so wrong and cause so much damage? Martin Baily, Douglas Elmendorf and Robert Litan answered that question in a new paper released at this public forum. The authors, following opening remarks by FDIC Chairman Sheila Bair, put forward a specific agenda of policy actions to reduce the chance that history repeats itself.

Pay-Day Lenders, Check Cashing Outlets and Other Alternative Financial Services

Wed, 16 Apr 2008 00:00:00 GMT

A substantial number of low-income individuals make use of services within the alternative financial sector, particularly pay-day lenders and check cashing outlets. The high cost of these services has led many observers to seek policies that would reduce the use of informal financial services among lower income households. In this paper, Rebecca Blank reviews the reasons why individuals utilize AFS outlets and discusses the policy options that could affect these decisions.

The Bear Stearns Rescue: The Fed’s Money Well Spent

Fri, 11 Apr 2008 00:00:00 GMT

Alice Rivlin discusses why the recent rescue of Bear Stearns by the Federal Reserve, was "money well spent." The Fed's actions, she says, were aimed at "protecting the rest of the country—and indeed the world—from the possibly devastating consequences of a financial meltdown."

The Stability of Global Financial Markets

Wed, 09 Apr 2008 00:00:00 GMT

In a new Q&A on global economic issues, Lex Rieffel examines the global impact of the U.S. subprime woes, rising food and commodity prices and sovereign wealth funds.

Capital Account Liberalization, Real Wages, and Productivity

Mon, 31 Mar 2008 00:00:00 GMT

In new research, Peter Blair Henry shows the benefits of stock market opening for developing countries.

Western Banks Must Take Their Own Medicine

Thu, 28 Feb 2008 00:00:00 GMT

In a recent op-ed, Erik Berglof discusses how European central banks might handle the current global financial crisis.

Financial Access without Expertise: Consumer Implications of the Credit Crisis

Fri, 22 Feb 2008 00:00:00 GMT

At a conference hosted by the Federal Bank of St.Louis and the RISE Foundation, Matt Fellowes discusses the lessons about consumers that can be drawn from the current housing crisis. He highlights the broad democratization of the financial services market that occurred in the 20th century, but finds that there was one, important exception: access to professional advice about financial service options.

Banking on Wealth: America’s New Retail Banking Infrastructure and Its Wealth-Building Potential

Tue, 22 Jan 2008 00:00:00 GMT

The $100 billion size of the high-cost non-bank basic financial services industry, including check cashers, payday lenders, and pawnshops, points to the high demand for basic financial services among low- and moderate-income customers. Alternative products sold by banks—located extensively in lower-income neighborhoods could meet those consumer needs, while also creating an opportunity for households to convert their current spending on high-cost services into savings and even wealth.

The Economic Power of Uncertainty: The Role of Consumer Credit Bureaus

Fri, 14 Dec 2007 00:00:00 GMT

With detailed financial information about over 200 million American consumers, credit reports substantially reduce the uncertainty numerous types of businesses have about consumers, including banks, insurance companies, and employers. The chief economic impact of that reduced uncertainty has been to support robust economic growth and prosperity. Yet, alongside those reductions in uncertainty, there are new uncertainties created too, which also carry important economic consequences. This speech assesses these market effects of credit reports and their economic significance for both businesses and consumers.

The Subprime Mortage Crisis and Central Banks: a Rock and a Hard Place

Sun, 11 Nov 2007 00:00:00 GMT

Brookings Scholar Urjit Patel examines the global effects of the US sub-prime market crisis on central banks.

Beyond Tax Preparation: Measuring the Market Impact of Wealth Building Initiatives

Tue, 02 Oct 2007 00:00:00 GMT

Hundreds of free tax preparation sites have opened-up in the past ten years that connect low-income families to the Earned Income Tax Credit (EITC) and other income-supports.

Notes on Policy Responses to the Subprime Mortgage Unraveling

Fri, 21 Sep 2007 00:00:00 GMT

Doug Elmendorf offers a critical appraisal of recent policy responses to rising delinquencies and foreclosures of subprime mortgages. The Federal Reserve should reduce, but not slash, the federal funds rate, he argues.

Is the "Surge" Working? Some New Facts

Fri, 14 Sep 2007 00:00:00 GMT

Michael Greenstone assesses the Surge's impact on three key dimensions: the functioning of the Iraqi state (including civilian casualties); military casualties; and financial markets' assessment of Iraq's future.

The High Price of Easy Credit

Mon, 04 Jun 2007 00:00:00 GMT

The authors argue that the subprime mortgage problem is in part due to systemic gaps between what working families realistically need to know about borrowing options, and what they actually do know. The authors call for Congress to think through ways that working families can obtain trusted financial advice and information.

Making Markets an Asset for Lower Income, Working Families

Mon, 09 Apr 2007 00:00:00 GMT

In this testimony before the California Assembly Banking and Finance Committee, Matt Fellowes discusses the important opportunity to build wealth among California's lower income working families by expanding access to banking services.

Beyond Microfinance: Getting Capital to Small and Medium Enterprises to Fuel Faster Development

Sat, 10 Mar 2007 00:00:00 GMT

David de Ferranti and Anthony J. Ody explain why the time has come to pay greater attention to the potential of small and medium-sized commercial firms to promote economic growth.

Extending Deregulation: Make the U.S. Economy More Efficient

Wed, 28 Feb 2007 00:00:00 GMT

Since the 1970s, deregulation has succeeded in increasing overall economic welfare and sharply reducing prices, generally by about 30 percent, for transportation—including air travel, rail transportation, and trucking—and for natural gas and telecommunications. Few industries remain subject to classic economic regulation in the United States.

Betting With the House's Money

Thu, 15 Feb 2007 00:00:00 GMT

Opinion by Kenneth Rogoff, Project Syndicate (2/15/07)

Banking Sector Opening: Policy Questions And Lessons For Developing Countries

Thu, 15 Feb 2007 00:00:00 GMT

After decades of zealously protecting their banking markets, in the 1990s many developing and transition economies began to scale down or eliminate barriers to foreign direct investment (FDI) in the banking sector. Today, policymakers in a second wave of countries are in the early stages of opening their banking sectors or are under considerable political pressure to do so.

Getting to the Bottom of "Bottom-Up" Approaches

Sun, 01 Oct 2006 00:00:00 GMT

Joseph O'Keefe looks at the trend of microfinance banking as a tool to help the world's poor, but says it deserves much more scrutiny. Far too little before-and-after research has been conducted on the actual social and developmental impact of such enterprises, he says.

It’s Time to Let Banks (Even Big Ones) Compete

Thu, 15 Jun 2006 00:00:00 GMT

Robert E. Litan examines the artificial barriers that prevent banks and other financial service firms from competing.

The Future of Charge Card Networks

Wed, 01 Feb 2006 00:00:00 GMT

The general-purpose charge card is now ubiquitous and largely taken for granted. Annual charge card volume exceeds $5 trillion worldwide. Within the United States, nearly one billion cards are in use (about eight per household), and more than two billion worldwide. But charge cards, or more specifically, the cooperative networks that serve the largest card systems, Visa and MasterCard, are under legal attack through multiple lawsuits and under regulatory challenge in other countries. We trace in this essay multiple possible future "scenarios." This focus on possible futures distinguishes our work from many earlier studies of this subject.

Credit Markets, Creditors' Rights and Economic Development

Wed, 01 Feb 2006 00:00:00 GMT

Credit markets are just as important as equity markets to financial development. And in most countries far more finance is generated in credit markets than in public equity markets. Even in the United States, which is usually thought the country with the most pronounced equity culture, far more money is raised in credit markets than in equity markets.

Brookings Papers on Economic Activity 2: 2005

Wed, 01 Feb 2006 00:00:00 GMT

The Future of State-Owned Financial Institutions : Policy and Practice

Tue, 01 Feb 2005 00:00:00 GMT

In The Future of State-Owned Financial Institutions: Policy and Practice noted experts discuss the challenges presented by state-owned financial institutions and offer cross-disciplinary solutions for policymakers and banking regulators.

Financial Access for Immigrants: Learning from Diverse Perspectives

Fri, 01 Oct 2004 00:00:00 GMT

Brookings Conference Report #19 by Audrey Singer and Anna Paulson. (October 2004)

The Future of State-Owned Financial Institutions

Wed, 01 Sep 2004 00:00:00 GMT

Conference Report #18 by Gerard Caprio, Jonathan Fiechter, Robert E. Litan and Michael Pomerleano. (September 2004)

Financial Access for Immigrants: Learning from Diverse Perspectives

Thu, 15 Apr 2004 00:00:00 GMT

Event Information:

April 15, 2004 at 12:00 AM

The Federal Reserve Bank of Chicago hosted a conference that highlighted new research and best practices for overcoming barriers to immigrant financial market participation. Panels on traditional banking, housing and homeownership, entrepreneurship, small business lending, and remittances featured speakers from policy makers, researchers, and representatives of financial institutions, government agencies, immigrant advocacy and community development organizations.