Sound Banking
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“New Financial Rulebook Tangles Loan Bundlers, Rating Agencies”
“A minor rule change in the law unexpectedly shut down the market for selling new bundles of car loans and consumer loans after bond issuers, ratings agencies and the Securities and Exchange Commission found themselves caught in a tangle of old and new regulations. The SEC intervened Thursday afternoon, but traders viewed the incident as…
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“Experts fear financial reform law will restrict credit to businesses”
“The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act is meant to bring new stability to the financial system, but there’s not a lot of love for the legislation among local banks, financial experts and business leaders, who say the law will reduce access to credit.” Read more. “Experts fear financial reform law will…
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Summer Reading III
According to Reinhart and Rogoff, “for the advanced economies during 1800-2008, the picture that emerges is one of serial banking crises.” In This Time is Different, the authors bring us up to the present by examining the history of banking crises. Banking crises are not only frequent , but often accompanied by other kind of…
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The Great Reflation
“The financial crisis, the speculative bubble leading up to it, and the aftermath have proven once again just how true the old saying is that if you want to know what’s going on in the financial system, watch the banks. The banking system has always been the centerpiece of liquidity flows, and financial markets are…
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The Experience of Free Banking
“There was controversy over how much power the central bank should have and what it should try to do, but no respectable economist suggested that central banking itself was unnecessary or harmful until Hayek finally despaired of it in 1976 and began to argue that the only way to achieve monetary stability was to denationalize…
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“Illinois Free Banking Experience”
“Recent studies by Rolnick and Weber (1983, 1984) have presented evidence challenging the conventional view of the Free Banking Era (1837-1863). The conventional view depicts a period of financial chaos in which lenient regulations gave rise to a plethora of banks, bank notes and coun-terfeit bank notes, unscrupulous “wildcat” bankers, and large noteholder losses. Rolnick…
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“New Evidence on the Free Banking Era”
“The United States has experienced many periods of major banking panics during which a large number of banks have failed and financial markets have been in considerable disarray. The period consid-ered by many as the worst is the one period when banks were more or less left alone to pursue their own profit-motivated interests, the…
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“Free Banking and Information Asymmetry”
“A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating equilibrium a higher-quality bank offers a lower…
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“Free Banking and Monetary Control”
“Were free banking to reemerge today, it would probably be based, not on a gold standard, but on irredeemable paper (‘fiat’) base money issued by a former or extant central bank. Under this form of free banking, the price level is no longer given, and conventional monetary policy questions remain relevant. In particular, would free…
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Summer Reading II
Summer reading is eclectic and before getting to my second installment of notes on This Time is Different, I want to recommend a non-economics book. A Chance in Hell by Jim Michaels is a riveting account of how the military and political situation turned in Anbar province in Western Iraq. It is first and foremost…
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“New Financial Rulebook Tangles Loan Bundlers, Rating Agencies”
“A minor rule change in the law unexpectedly shut down the market for selling new bundles of car loans and consumer loans after bond issuers, ratings agencies and the Securities and Exchange Commission found themselves caught in a tangle of old and new regulations. The SEC intervened Thursday afternoon, but traders viewed the incident as…
-
“Experts fear financial reform law will restrict credit to businesses”
“The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act is meant to bring new stability to the financial system, but there’s not a lot of love for the legislation among local banks, financial experts and business leaders, who say the law will reduce access to credit.” Read more. “Experts fear financial reform law will…
-
Summer Reading III
According to Reinhart and Rogoff, “for the advanced economies during 1800-2008, the picture that emerges is one of serial banking crises.” In This Time is Different, the authors bring us up to the present by examining the history of banking crises. Banking crises are not only frequent , but often accompanied by other kind of…
-
The Great Reflation
“The financial crisis, the speculative bubble leading up to it, and the aftermath have proven once again just how true the old saying is that if you want to know what’s going on in the financial system, watch the banks. The banking system has always been the centerpiece of liquidity flows, and financial markets are…
-
The Experience of Free Banking
“There was controversy over how much power the central bank should have and what it should try to do, but no respectable economist suggested that central banking itself was unnecessary or harmful until Hayek finally despaired of it in 1976 and began to argue that the only way to achieve monetary stability was to denationalize…
-
“Illinois Free Banking Experience”
“Recent studies by Rolnick and Weber (1983, 1984) have presented evidence challenging the conventional view of the Free Banking Era (1837-1863). The conventional view depicts a period of financial chaos in which lenient regulations gave rise to a plethora of banks, bank notes and coun-terfeit bank notes, unscrupulous “wildcat” bankers, and large noteholder losses. Rolnick…
-
“New Evidence on the Free Banking Era”
“The United States has experienced many periods of major banking panics during which a large number of banks have failed and financial markets have been in considerable disarray. The period consid-ered by many as the worst is the one period when banks were more or less left alone to pursue their own profit-motivated interests, the…
-
“Free Banking and Information Asymmetry”
“A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating equilibrium a higher-quality bank offers a lower…
-
“Free Banking and Monetary Control”
“Were free banking to reemerge today, it would probably be based, not on a gold standard, but on irredeemable paper (‘fiat’) base money issued by a former or extant central bank. Under this form of free banking, the price level is no longer given, and conventional monetary policy questions remain relevant. In particular, would free…
-
Summer Reading II
Summer reading is eclectic and before getting to my second installment of notes on This Time is Different, I want to recommend a non-economics book. A Chance in Hell by Jim Michaels is a riveting account of how the military and political situation turned in Anbar province in Western Iraq. It is first and foremost…
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