This Week in Financial Regulation, May 1st

This Week in Financial Regulation, May 1st

Rent Check

The current mortgage financing system is bad policy, argues AEI’s Ed Pinto. A more straightforward and progressive plan, like a first-time homebuyer tax credit, is a better approach.


News and Commentary

Mercatus’s Scott Sumner is out with a useful piece going over the tools of the Federal Reserve and monetary policy. He explains how some regulatory actions aimed at increasing liquidity can affect the Fed’s monetary operations.

Diego Zuluaga recently gave a speech to the New York League of Independent Bankers on the effects of regulation. He relates it to It’s a Wonderful Life and its protagonist, George Bailey, and argues that current regulators have made it impossible for small banks like Bailey’s to survive.

Ben Hunt took to MarketWatch to explain how financialization- which he defines as growing profits without growing productivity- is ruining the US economy. He says that, through accounting mechanisms like stock buybacks, a cycle is created where Wall Street profits, politicians get their support, and ordinary citizens get left out.


New Research

A new NBER paper looks at the relationship between asset bubbles and systemic risk. The authors use banking-data to show that banks see their risk increase both during a bubble’s buildup and following its burst.

Two recent studies have been authored that support Lubos Pastor and Robert F. Stambaugh’s 2003 paper on lquidity risk premiums. Pastor and Stambaugh gave some thoughts on the two studies.

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By |2019-05-01T14:25:38-07:00May 1st, 2019|Blog, Financial Regulation|