We document the build-up of regulatory and market equity capital in large U.S. bank holding companies between 1986 and 2000. During this time, large banking firms raised their capital ratios [...]
In 1988 the Basel Committee on Banking Supervision completed the Basel Capital Accord, which set risk-weighted minimum capital standards for internationally active banks. The accord, which has been adopted by [...]
Recent corporate scandals have ignited debate over appropriate rules for accounting and corporate governance. The debate has largely ignored an important preliminary question: who should set standards of corporate governance [...]
Fannie Mae and Freddie Mac are a unique part of [federal housing policy]. Though they appear to be “normal” corporations, each with shares that trade on the New York Stock [...]
Understanding the ongoing credit crisis or panic requires understanding the designs of a number of interlinked securities, special purpose vehicles, and derivatives, all related to subprime mortgages. I describe the [...]
There is a strong consensus that reform of the financial regulatory system must include significant increases in the capital requirements for banks. All else equal, this should make the banks [...]
Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated [...]
The U.S. Department of Housing and Urban Development has long been plagued by scandals, mismanagement, and policy failures. Most recently, HUD’s subsidies and failed oversight of Fannie Mae and Freddie [...]
There is a strong consensus among policymakers that there need to be higher minimum capital requirements for banks in order to foster a more stable financial system and to help [...]
The U.S. Constitution vests all the “legislative powers” it grants in Congress. The Supreme Court allows Congress to delegate some authority to executive officials provided an “intelligible principle” guides such [...]