Purpose – This paper investigates the link between equity and credit markets for the government‐sponsored mortgage institutions, Fannie Mae and Freddie Mac, during the period from January 2007 until December 2008. Before the financial crisis, investors perceived these real estate finance...

As painful as it may be, letting the housing and mortgage markets sort out these problems on their own would be best for the economy in the long run. Large-scale government interventions are not necessarily the best policy responses, although those made truly needy by this crisis need to be helped.

Since the onset of the financial crisis, households have reduced their outstanding debt by about $1.3 trillion. While part of this reduction stemmed from a historic increase in consumer defaults and lender charge-offs, particularly on mortgage debt, other factors were also at play. An analysis...

Remarks at United States Military Academy at West Point, West Point, New York.

Due to a high ratio of foreign ownership, countries in the Central and East European (CEE) region are characterised by particularly high financial integration. Therefore, contagion risks are high in both directions: a problem that develops in the country of a parent bank can easily spread to the...

Remarks at the National Association for Business Economics Annual Meeting, New York City.

There are many events that led up to the financial crisis of 2008. This study looks at the political policies in place before the crisis happened. Focusing on the decade and a half prior to the crisis, the incentives in the financial industry led to risk mitigation. This response to mitigate...

Remarks at the Washington and Lee University H. Parker Willis Lecture in Political Economics, Lexington, Virginia.