News and Commentary
Niskanen’s very own Samuel Hammond critiques the report from Senator Marco Rubio on perils of financialization in the U.S. economy. While Hammond agrees that large companies functioning as banks by lending rather than investing is bad for the U.S. economy, concerns about stock buybacks are misguided.
A new e-book published by voxEU assesses a decade of financial regulation. In a column, Patrick Bolton, Stephen Cecchetti, Jean-Pierre Danthine, and Xavier Vives summarize the findings. Among them are first, while banks are better capitalized than before, they still have a long way to go–they advocate erring on the side of caution. Second, while narrow banks have appeal in the post-crisis environment, they are no panacea for financial instability. Finally, central banks must make macroprudential stability a more important priority.
The Mercatus Center has started a three-part series on a historical perspective of the number and size of banks in the U.S. They find that while the largest banks hold a large number of assets relative to historical norms, the industry does not see relatively high levels of concentration.
Kristin J. Forbes outlined the past 10 years of macroprudential policy, and what we have (or haven’t) learned. While we have a better understanding of the tools of macroprudential policy, we still need to understand the effects of these tools and where new threats to financial stability emerge.