Croaking Cassandra’s Michael Reddel misstates the causes of moral hazards in the banking system. The underlying guarantee of a government bailout plays a far larger role in determining bank risk-taking than any single regulatory policy.
News and Commentary
Kenneth Rogoff on the dangers of the next potential financial crisis. Despite the competence of the Federal Reserve and other central banking staffs, the growth of the financial sector and political instability could expedite the arrival of the next financial crisis.
Dirk Schoenmaker on potential regulatory options to clamp down on unsustainable leveraged finance.
The Volcker Alliance’s Sheila Bair and Gaurav Vasisht on financial instability. Policy makers should look past industry pleas to increase profits and focus on increasing capital requirements and improving loan standards.
Alex J. Pollock explains what it would take to move Fannie and Freddie out of government conservatorship.
The Bank of Finland is conducting an industry-wide poll on the success of post-crisis reform efforts.
The Fed released the macroeconomic scenarios they will be using to conduct their 2019 stress tests, and Francisco Covas and Bill Nelson of the Bank Policy Institute don’t like them. They argue the overly-severe scenarios and lack of public input prevents the stress tests from being optimal.
What is the constitutional role of the federal government in regulating financial markets? AAF’s Thomas Wade and Matthew Adams focus on two of the major institutions, the CFPB and FHFA, and argue that their lack of supervision deems them unconstitutional.