Brookings: Topics - Federal Reserve System

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.

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.

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.

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.

Ben Bernanke’s Second Term and the Federal Budget Forecast

Thu, 27 Aug 2009 09:45:34 GMT

President Barack Obama has nominated Ben Bernanke to serve a second term as Chairman of the Federal Reserve. The nomination came on the same day the White House announced a sharp increase in projected deficits. Alice Rivlin says the deficit projections should serve as an impetus for officials to step up efforts to fix the floundering economy. She also gives the Bernanke nomination her nod of approval.

The Federal Reserve's Independence Is at Risk

Thu, 20 Aug 2009 00:00:00 GMT

John L. Thornton, Glenn Hubbard and Hal Scott say that the future of the Federal Reserve as a lender of last resort is in jeopardy. Because the Fed has compromised its economic credibility and political independence during the financial crisis, they argue, the Obama administration should give it full authority to lend against good collateral only but restrict emergency bailout power to the federal Treasury alone.

Systemic Risk and the Role of the Federal Reserve

Wed, 29 Jul 2009 00:00:00 GMT

Alice Rivlin recommends that the Federal Reserve not be given any major new regulatory duties over specific institutions, but instead be given responsibility for monitoring the stability of the financial system and new tools to reduce emerging systemic risks.

Reducing Systemic Risk in the Financial Sector

Tue, 21 Jul 2009 00:00:00 GMT

Testifying before the House Financial Services Committee, Alice Rivlin said that financial sector regulators failed to head off the recent crisis because "no one was explicitly charged with spotting the regulatory gaps and perverse incentives that had crept into our rapidly changing financial structure in recent decades." Rivlin outlined regulatory changes that might prevent another catastrophic financial meltdown.

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.

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.

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.

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.

The Financial Rescue Package Update

Mon, 06 Oct 2008 00:00:00 GMT

The financial rescue package has been signed into law, but what happens now? Sarah Binder has been watching this story develop, and discusses her thoughts on The Federal Drive with Tom Temin and Jane Norris.

The Financial Bailout Bill Heads Back to the House

Thu, 02 Oct 2008 00:00:00 GMT

Despite the urging of President George W. Bush and congressional leaders, the all-out push for a $700 billion bailout for the nation’s beleaguered banks ended in failure on September 29. Even though party leaders called on their members to cast votes for the nation’s financial welfare, legislators responded by casting votes for their own electoral safety, writes Sarah Binder and Mark Spindel in an opinion that examines why the bill failed.

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.

The Financial Market Bailout

Fri, 26 Sep 2008 14:43:48 GMT

Policy-makers spent a long weekend hashing out details on legislation that would provide up to $700 billion to purchase Wall Street assets, new oversight authority and more foreclosure prevention. Former Federal Reserve Vice Chair Alice Rivlin explains how mortgage securities unraveled, how the deal makers prevailed and what this will mean for the next administration.

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.

Concerns about the Treasury Rescue Plan

Fri, 19 Sep 2008 00:00:00 GMT

Tumult in financial markets continues to rattle the nation and spur government response. Douglas Elmendorf offers his analysis on how government funds might be best injected into the crisis-ridden economy. He weighs several approaches, from buying mortgage-related debt and other troubled securities to investing in a wide range of financial institutions.

Missing Markets: Fostering Market Based Solutions to Major Risks

Thu, 05 Jun 2008 09:30:00 GMT

Event Information:

June 05, 2008, 9:30 AM to 12:00 PM

Hurricanes, retirement, home-buying and tax-base erosion all pose financial risks. Yet markets to reduce these risks are elusive. The Hamilton Project at Brookings released papers at a discussion on how sound public policy can play a critical role in helping to foster new markets or expand existing markets in ways that could provide widely shared benefits.

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.

Reducing the Likelihood of Financial Crisis

Wed, 14 May 2008 00:00:00 GMT

Even though billions of dollars of mortgage-related loses have yet to be declared, Doug Elemendorf offered Joint Economic Committee members four principles to guide reform of the troubled financial system. His diagnosis and prescriptions are based on a new Brookings report to be released Friday.

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."

Taking Back our Fiscal Future

Tue, 01 Apr 2008 00:00:00 GMT

Unsustainable deficits in the federal budget threaten the health and vigor of the American economy. When the next president and Congress take office in January 2009, they will face one crucial question that has been almost absent from the current election campaign: how to close the enormous gap between projected federal spending and revenues.

Economy: The Fed Steps In

Mon, 17 Mar 2008 00:00:00 GMT

Brookings Expert Alice Rivlin comments on the Federal Reserve's decision to back the crumbling financial institution Bear Stearns.

The Bear Stearns Bailout

Mon, 17 Mar 2008 16:42:08 GMT

Over the weekend, the Federal Reserve bailed out Wall Street giant Bear Stearns in an effort to steady the nation’s bumpy economy. Hamilton Project Director and Senior Fellow Jason Furman says it was a necessary stop-gap for our troubled economy.

Monetary Policy and the State of the Economy

Tue, 26 Feb 2008 00:00:00 GMT

Alice M. Rivlin testified before Congress on the current economic situation and what policy makers can do to curb a possible future recession. "The Federal Reserve has used the tools in its limited arsenal aggressively and imaginatively and clearly indicated its intention do more if necessary," she said.

Federal Reserve Board Economist Douglas Elmendorf Named Brookings Senior Fellow

Fri, 05 Oct 2007 19:07:35 GMT

News Release (5/25/07)

Recent Financial Market Disruptions

Wed, 26 Sep 2007 09:30:00 GMT

Event Information:

September 26, 2007, 9:30 AM to 11:30 AM

As the nation faces what might turn out to be the worst liquidity crisis around housing in 50 years, The Hamilton Project brought together former and current Treasury officials, Wall Street experts and others for a free-flowing discussion on the risks to the economy and to individual home owners.

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.

Betting With the House's Money

Thu, 15 Feb 2007 00:00:00 GMT

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

Government Failure vs. Market Failure: Microeconomics Policy Research and Government Performance

Fri, 01 Sep 2006 00:00:00 GMT

On what basis is one to conclude that a policy to correct a market failure is as successful as possible? The first consideration is whether government has any reason to intervene in a market: Is there evidence of a serious market failure to correct? The second is whether government policy is at least improving market performance: Is it reducing the economic inefficiency, or "deadweight" loss, from market failure?

Federal Reserve System: The Mark of the Bust

Wed, 14 Jun 2006 00:00:00 GMT

Opinion by Martin Mayer, The New York Times (6/14/06)

Follow the Money

Wed, 14 Jan 2004 00:00:00 GMT

Opinion by Martin Mayer (1/14/04)

Banks Must Be Untied from an Outdated Law

Tue, 06 May 2003 00:00:00 GMT

Opinion by Robert E. Litan (5/06/03)

Options for Stabilization Policy: A New Analysis of Choices Confronting the Fed

Thu, 01 Feb 2001 00:00:00 GMT

In this policy brief, the authors propose an alternative to the conventional natural rate model. It is based on behavioral assumptions that we believe are more realistic than those underlying the natural rate model and that are backed by research on

Why Secrecy is Bad for Banking

Tue, 30 Dec 1997 00:00:00 GMT

Opinion by Martin Mayer, The Wall Street Journal (12/30/97)

Controlling Money : The Federal Reserve and Its Critics

Fri, 01 Apr 1983 00:00:00 GMT

This book analyzes three common sources on confusion about Federal Reserve policy: an inadequate comprehension of the differences among alternative operating procedures available to the Federal Reserve and the consequences of choosing one set of proc