News and Commentary
Thorsten Beck and Jan Keil note in a VoxEU column that Paycheck Protection Program loans drove the increased lending seen during COVID-19.
Brian Chappatta, Jesse Hamilton, and Alexandra Harris detail in the Washington Post the debate regarding the supplementary leverage ratio, which would increase capital reserves if in effect.
Andrew Ackerman writes that Senators Sherrod Brown and Elizabeth Warren have vocalized opposition to extending the supplementary leverage ratio waiver in the Wall Street Journal.
Telis Demos says in the Wall Street Journal that the Treasury market will not be significantly affected by the supplementary leverage ratio decision.
Greg Baer and Bill Nelson of the Bank Policy Institute describe how with the leverage ratio, Fed purchases of Treasury debt become a functional capital requirement on banks.
A Macro Musings podcast features the policy tensions between the Fed and Treasury, initiated after 2008 and driven by public debt.
New Research
In the Journal of Economic Literature, Bilge Erten, Anton Korinek, and José Antonio Ocampo review the capital requirements literature in the context of international capital flows.
Viral Acharya, Robert Engle III, and Sascha Steffen examine the crash of bank stocks during COVID-19 in an NBER paper, finding that the decline was lesser for banks with higher capital buffers.
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