News and Commentary
From the White House, President Biden’s nominations for key regulatory and investor protection positions were announced.
At Reuters, Jonnelle Marte reports on Federal Reserve Chair Jerome Powell’s less than cordial hearing with the Senate Banking committee.
At NBER a working paper from Joshua Aizenman, Yin-Wong Cheung, and Xingwang Qian finds positive effects of central bank management of international reserves on firm investment, particularly during global financial shocks.
Also at NBER, Andrew Metrick and Paul Schmelzing reveal a new database of bank crisis interventions. At a high level, they note “The data show a gradual shift over the past centuries from the traditional interventions of a lender-of-last-resort, suspensions of convertibility, and bank holidays, towards a much more prominent role for capital injections and sweeping guarantees of bank liabilities.”
In an NBER working paper, Ulrich Doraszelski, João Gomes, and Felix Nockher employ new computational methodology and find that “financial frictions impact firms’ pricing and investment strategies and the degree of industry concentration.”
In another NBER working paper, Investment Bernadette Minton, Alvaro Taboada & Rohan Williamson assess the effect of bank mergers on small business loans: “Small and in-state acquirers target banks that focus more on SBL [small business loans] and targets with strong relationships while large, out-of-state acquirers pursue better performing banks with stronger balance sheets and less focus on SBL.”