This paper examines the evolution of risk in the U.S. financial sector using firm-level equity market data from 1975 to 2005. We find that over the past three decades, financial sector volatility has steadily increased, particularly from 1998 to 2002. Increased volatility, driven by common...

The U.S. banking industry is steadily increasing its reliance on nontraditional activities that generate fee income, trading revenue, and other types of noninterest income. This paper assesses potential diversification benefits from this shift. At the aggregate level, declining volatility of net...

As the U.S. banking industry continuously evolves, changes in industry composition have a direct impact on the aggregate performance of the industry. This paper presents a new decomposition framework for commercial banks and shows that both firm-level changes and dynamic reallocation effects -...

As the banking business grows more complex, government supervisors of banks seem increasingly willing to share the role of policing bank risk with private investors, especially bondholders. This paper investigates the disciplinary role of markets using bond spreads, ratings, and bank portfolio...

This paper examines the common factors that drive the returns of U.S. bank holding companies from 1997 to 2005. We compare a range of market models from a basic one-factor model to a nine-factor model that includes the standard Fama-French factors and additional factors thought to be...

It is now widely recognized that information technology (IT) was critical to the dramatic acceleration of U.S. labor productivity growth in the mid-1990s. This paper traces the evolution of productivity estimates to document how and when this perception emerged. Early studies concluded that IT...

This paper examines the declining volatility of U.S. output growth from a production perspective. At the aggregate level, increased output stability reflects decreased volatility in both labor productivity growth and hours growth as well as a significant decline in the correlation. The decline...

A fundamental conclusion drawn from the recent financial crisis is that the supervision and regulation of financial firms in isolation - a purely microprudential perspective - are not sufficient to maintain financial stability. Rather, a macroprudential perspective, which evaluates and responds...

This paper examines the link between information technology (IT) and the U.S. productivity revival in the late 1990s. Industry-level data show a broad productivity resurgence that reflects both the production and the use of IT. The most IT-intensive industries experienced significantly larger...

Economists, business analysts, and policymakers have all focused considerable attention on U.S. productivity growth in recent years. This paper presents a broad overview of productivity both labor and total factor and discusses why it is such an important topic. We begin with the official U.S....