News and Commentary
Frank Partnoy writes in The Atlantic about his vision for what a COVID collapse of the U.S. financial system and points to the rise of collateralized loan obligations (CLOs) as the source of the next crisis.
Diego Zuluaga writes at the Cato Institute blog about America’s unbanked population and how an expansion of industrial banks could help this population. He argues that because one of the primary causes of people being unbanked is distrust in ordinary financial institutions, allowing non-financial firms such as retailers, grocery stores, or e-commerce firms to offer banking services could help lower the number of unbanked persons.
Sylvan Lane writes at The Hill about how Sen. Elizabeth Warren (D-Mass.) is urging the Office of the Comptroller of the Currency to withdraw a proposed rewrite of anti-redlining rules. The Senator argues that the proposed rewrite was produced without proper stakeholder input and will allow banks to discriminate against minority communities whereas proponents of the rewrite argue that it was produced via the proper procedure and would accelerate the delivery of credit to these communities.
Gaurav Vashist writes an opinion piece at The Regulatory Review arguing that the Federal Reserve ought to mandate that banks preserve capital by retaining earnings and stopping shareholder payouts.
The Cato Institute and the Mercatus Center will hold a three-part series of events on ways to reform the Federal Reserve to ensure that the central bank is ready for the next crisis. The events feature Sir Paul Tucker, Elga Bartsch, Peter Stella, Peter Conti-Brown, and others.
New Research
A new working paper from Michael D. Bordo, Andrew T. Levin, and Mickey D. Levy the National Bureau of Economic Research discusses how the Federal Reserve could begin incorporating alternative scenario analysis to illustrate key risks to the economic outlook into its policymaking and communications strategy.
A report from Donald Kohn at the Brookings Institution examines the effects of COVID-19 on the Federal Reserve and the nation’s financial institutions.
A new paper from Jeffrey M Chwieroth and Andrew Walter in Socio-Economic Review argues that the rapid expansion and financialization of middle-class wealth since the mid-20th century has caused greater political risk for governments during periods of financial instability.
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