I review 20 years of financial data and highlight important changes in the banking industry. Post financial crisis laws and regulations and new Federal Reserve monetary policies have left a lasting impact on the industry. By 2021, the number of independent depository institutions declined to...

Prompt Corrective Action (PCA) requires regulators to sanction banks before they become insolvent and to resolve institutions within 90 days of reaching critically undercapitalized status. Forensic studies of the financial crisis conclude that the PCA process not only failed to rehabilitate...

There was a time when the Federal Reserve believed that honest money—i.e., a stable price level— was essential for achieving full employment. Today, retired Fed officials are recommending that the Federal Open Market Committee (FOMC) target 3-percent inflation. They argue that a 3 percent...

The efficacy of the Financial Stability Board's proposed requirement for minimum "total loss absorbing capacity" (TLAC) at global systemically important banks (G-SIBs) is assessed using a stylized model of a bank holding company and an equilibrium asset pricing model to value financial claims. I...

This paper highlights the policy uncertainty inherent in using stress tests, both to set minimum bank capital requirements and to assess the capital adequacy needed to maintain banking system stability.

We analyze the ability of the "Single Point of Entry" strategy (SPOE) to resolve large banks without financial market disruption. We identify several legal and financial impediments that could prevent SPOE's use. In particular, Title II of the Dodd-Frank Act was conceived by Congress as an...

Analysis of data on bank-specific average PPP loan size produces results that are inconsistent with a loan demand explanation. Absent good measures of PPP loan demand, the source of the observed differences in bank PPP loan activity cannot be definitively identified using bank regulatory data alone.

Since the 2009 Supervisory Capital Assessment Program (SCAP), US regulators have employed a representative bank model as the benchmark of comparison in mandatory stress test exercises. For risk management functions, a bank's own stress model must be calibrated to reflect the bank's historical...