It’s been widely assumed that the financial crisis spread from the United States to the rest of the world because foreign institutions held dangerous amounts of Wall Street’s sub-prime mortgage paper. But a startling paper by Federal Reserve Board economists Steven B. Kamin and [READ MORE...]
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By Robert Hahn, Peter Passell | Tags: contagion, Laurie Pounder DeMarco, mark-to-market, risk aversion, Steven Kamin, sub-prime | Category: Financial Regulation Reform, Quick Takes |
 Leave a commentSixteen years ago, one of us (Passell) wrote an article for The New York Times explaining how Iceland defied common sense and conventional analysis by managing a highly productive, diversified economy just one-one-thousandth the size of the U.S. economy in the middle of the ocean. The country’s strategy … By Robert Hahn, Peter Passell | Tags: economies of scale, Iceland, Icesave, Landsbanki, Thorvaldur Gylfason | Category: Financial Regulation Reform |
Leave a comment…Michael Kinsley’s warning that inflation remains a clear (if not present) danger? Kinsley’s point is pretty straightforward. For good Keynesian reasons, Washington is currently running humungous budget deficits. But once the recession is over, there will be no political will to contain federal spending (especially on Medicare … Like all card-carrying economists, we’re of two hands (minds) about Sen. Bob Corker’s insistence that the new consumer financial protection agency be stripped of authority to regulate “payday” loans – very short-term, very high-cost loans collateralized by borrowers’ future paychecks. On the one hand, the industry seems to be … By Robert Hahn, Peter Passell | Tags: Check Into Cash, Jonathan Zinman, payday loans, Sen. Bob Corker, W. Allan Jones | Category: Financial Regulation Reform |
3 comments…the new book on financial innovation by Franklin Allen and Glenn Yago? Financing the Future: Market-Based Innovations for Growth offers an antidote to the conventional wisdom that Wall Street’s relentless search for profit has done more harm than good. The chapters on business and housing finance … Think you know what caused the collapse of Wall Street? Gary Gorton, the Sherlock Holmes of the financial crisis, has news for you. His remarkable Q&A [Download Here], prepared for the U.S. Financial Crisis Inquiry Commission is a … Robert Litan’s working paper on what financial innovation hath wrought is a must read. [Download Here] He set out to determine whether the radical changes in the way financial markets function over the past half-century deserve the bad rap … Once you start looking for it, the concept of “too big to fail” turns up in the oddest places. Consider the plight of Europe’s monetary union and its allegedly profligate son, Greece. Now, as everybody knows, individual nation-members of the EMU have ceded control over monetary policy to a single (very … …Beth DeSimone’s analysis of Federal Trade Commission Chairman Jon Leibowitz’s proposal to streamline the agency’s consumer protection powers on the Consumer Advertising Law Blog? Leibowitz, a former chief counsel to the Senate Antitrust Committee, is asking the Senate for an overhaul of procedures that limit both FTC … …Ed Andrews’ critique of Paul Volcker’s plan for taming the big banks’ incentives to take excessive risks? Andrews, a former business reporter for The New York Times, points out that Volcker used bait-and-switch tactics, defining the problem in terms of “too big to fail” and then … |
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