Posts filed under “Credit”

Banks, Shadow Banking, and Fragility

Category: Credit, Federal Reserve, Think Tank

Student Loans Are Going to Crush the Economy! (No, they are not)

  Student loans are the next great subprime crisis! At least that’s what the usual purveyors of doom and gloom say (see this, this and this). The numbers are big, the default rates are high and soon enough this is going to tip the economy into the next crisis or recession. Not so fast, writes…Read More

Category: Credit, Really, really bad calls

Gates, Fees, and Preemptive Runs

Gates, Fees, and Preemptive Runs Marco Cipriani, Antoine Martin, Patrick McCabe, and Bruno M. Parigi Liberty Street Economics, August 18, 2014       In the academic literature on banks, “suspension of convertibility”—that is, preventing the exchange of deposits at par for cash—has traditionally been seen as a potential means of preventing economically damaging bank…Read More

Category: Credit, Think Tank

One Cheer for Fair Isaac

Sometimes we don’t know exactly how broken things are until after they get fixed. Case in point: Fair Isaac Corp., the company that created the model used to calculate the scores underlying millions of consumer loan and credit decisions. The New York Times described Fair Isaac’s formula as “one of the most widely used and…Read More

Category: Credit, Economy, Really, really bad calls

Tapering Is Now Tightening

Tapering Is Now Tightening David R. Kotok July 19, 2014     For a long time, as we saw it, tapering and the threat of tapering (as in last year’s taper tantrum) did not constitute tightening. Today we explore why we believe the situation has now changed. In order to understand why tapering was not…Read More

Category: Bailouts, Credit, Federal Reserve, Fixed Income/Interest Rates, Think Tank

Bank Counterparties and Collateral Usage

Bank Counterparties and Collateral Usage Hamed Faquiryan and Marius Rodriguez The 2007–09 financial crisis drew attention to the nature and consequences of connections among financial firms. New reporting standards set in the wake of the crisis have shed more light on these ties in current financial markets. New data are available on the magnitude of…Read More

Category: Credit, Think Tank

Are the Rating Agencies About to Get Their Comeuppance?

This week in encouraging news, we learn that the Securities and Exchange Commission may finally be pursuing one of the prime enablers of the financial crisis — the ratings companies. Previously, it was reported that disclosure violations were on the SEC’s radar, but truth be told, those are minor offenses. The SEC’s Office of Credit…Read More

Category: Analysts, Bailout Nation, Credit, Really, really bad calls, Regulation

Banks Are Where The Liquidity Is

Category: Credit, Federal Reserve, Think Tank

Liquidity Risk and U.S. Bank Lending at Home and Abroad

Category: Credit, Federal Reserve, Think Tank

Contextualizing Bank Fines

click for larger version Source: BV, FT   This morning we discussed the danger that arises from merely fining banks instead of prosecuting them for violating laws. Since the news cycle is focusing on the potential multibillion-dollar fines for BNP Paribas SA and Bank of America Corp., let’s have a look at the amount of…Read More

Category: Bailouts, Credit, Crony Capitalists, Legal