Government Policy and Ownership of Financial Assets
Since World War II, direct stock ownership by households across the globe has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the [...]
A Quantitative Model of Banking Industry Dynamics
We develop a model of banking industry dynamics to study the relation between commercial bank market structure, business cycles, and borrower default frequencies. We analyze an environment where a small [...]
Basel Core Principles and bank soundness: Does compliance matter?
This paper studies whether compliance with the Basel Core Principles for effective banking supervision (BCPs) is associated with bank soundness. Using data for over 3000 banks in 86 countries, we [...]
Reputation under Regulation: The Fair Credit Reporting Act at 40 and Lessons for the Internet Privacy Debate
More than 40 years ago, Sen. William Proxmire (D-WI) guided the Fair Credit Reporting Act (FCRA) through Congress, seeking to improve the operations of the credit reporting industry. The complexities [...]
International Capital Flows and House Prices: Theory and Evidence
The last fifteen years have been marked by a dramatic boom-bust cycle in real estate prices, accompanied by economically large fluctuations in international capital flows. We argue that changes in [...]
Does Macro-Pru Leak? Evidence from a UK Policy Experiment
The regulation of bank capital as a means of smoothing the credit cycle is a central element of forthcoming macro-prudential regimes internationally. For such regulation to be effective in controlling [...]
Fixing Mortgage Finance: What to Do with the Federal Housing Administration?
While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market [...]
What Made the Financial Crisis Systemic?
The current narrative regarding the 2008 systemic financial system collapse is that numerous seemingly unrelated events occurred in unregulated or underregulated markets, requiring widespread bailouts of actors across the financial [...]
Restoring Trust in Mortgage-Backed Securities
The mortgage finance market has leaned heavily on government support over the past few years. More than 90 percent of mortgages originated in 2011 were securitized by government entities using [...]
Assessing the Cost of Financial Regulation
This study assesses the overall impact on credit of the financial regulatory reforms in Europe, Japan, and the United States. Long-term cost estimates are provided for Basel III capital and [...]