The regulatory framework established during the Great Depression spared us system-threatening financial failure for nearly four decades after World War II. The author gives a brief history of how the progressive deregulation of the financial system led to the crisis of 2008 and discusses the...

We can end the banking crisis immediately by offering temporary 100% deposit insurance to those banks that need it. In exchange the federal government should receive shares in those banks - a stake that would grow, the longer the insurance is provided. Moreover, as long as the insurance is...

The mortgage-backed securities (MBS) market has experienced significant changes over the past couple of years. Non-agency (quot;private labelquot;) securities, which are not guaranteed by the government or the government sponsored enterprises, now account for the majority of MBS issued. In this...

Many of the current difficulties in residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs) can be attributed to a misapplication of agency ratings. Changes in mortgage origination and servicing make it difficult to evaluate the risk of RMBS and CDOs. We show...

The globalization of finance has led to the development of more integrated global exchange networks among countries and deeper interrelationships between their economies. Many financial institutions and activities that once were local are now international. While business and finance are global...

I analyze the effect of contingent credit lines on bank's liquidity demand in Argentina. These lines provide insurance to systemic risk by enhancing the Central Bank's ability to act as a lender of last resort in the event of a crisis. Theory predicts that commercial banks with limited access to...

Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. These funds have raised concerns about: (i) financial stability, (ii) corporate governance and (iii) political interference and protectionism. At the same...

This article analyzes investor beliefs as to stocks, the inadvertent role government plays in shaping those beliefs and thereby contributes to a rise in stock prices, and the need for government quot;neutralityquot; among investor belief systems. It suggests that, contrary to conventional...

Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. These funds have raised concerns about: (i) financial stability, (ii) corporate governance and (iii) political interference and protectionism. At the same...