This Week in Financial Regulation, May 14th

This Week in Financial Regulation, May 14th

News and Commentary

A Pro-Market blog post summarizing the research of Josh Ryan-Collins finds that financial deregulation in the 1980s that removed “credit guidance” led to a decline in investment in non-financial sector businesses, with negative effects on growth in the cases of rising mortgage debt.

The editorial board of Bloomberg argues that plans to break up or decentralize Fannie and Freddie would still require significant taxpayer investment that would provide significant benefit to the private sector while still leaving taxpayers holding the bag should they fail.

A VoxEU column makes the case that by using regulatory, rather than market measures of bank capital, stress tests fail to adequately measure risk in the financial sector.

 

New Research

A new paper from the¬†Journal of Financial Stability¬†finds that countries with high financial instability but price stability can be traced to a policy of “benign neglect.” Rather than “leaning against the wind,” countries with a higher central bank conservativeness score adopted a more “clean up the mess” approach.

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By |2019-05-14T14:18:53-07:00May 14th, 2019|Blog, Financial Regulation|