The second half of the 1990s has seen substantialchanges in the wealth of Americanhouseholds, primarily owing to movements inthe stock market. From mid-1994 to mid-1997, the aggregate value of household sector equityholdings (including those owned by nonprofits, mutualfunds, and pensions and...

[...]The purpose of this article is to develop a clearerpicture of the importance of payments services to the bankingindustry. This goal is served by taking a broad view of thepayments business and analyzing information provided bylarge bank holding companies (BHCs) in their annualreports. BHCs...

[...]In this article, we provide insight into the policyaspects of this informational time decay by assessing howthe length of time between bank examinations affects thequality of information available to supervisors. For thesepurposes, we define the quality of information in terms ofhow...

[...]We address several questions in this paper. First,how could macro markets be useful to the average person?Second, how large are the potential benefits from diversificationif these markets were to be introduced andused optimally? Third, can existing financial marketsachieve a similar degree...

[...]This article examines how Japanese exporters areresponding to the conflicting objectives of maintainingstable profit margins and stable export sales when the valueof the yen fluctuates. We find that Japanese firms tend tostrike a balance between these goals. The firms’ foreigncustomers do...

[...]The most obvious possible, and undesirable,impact on bank behaviour of risk-weighted capital requirementsis that excessive differentials in the weights appliedto different categories of assets might induce banks to substituteaway from highly risk-weighted assets. In the early1990s, U.S....

[...]This paper examines the impact that the PCAstandards had on bank portfolios following the passage ofFDICIA in 1991. To do this, the simultaneous equationsmodel developed by Shrieves and Dahl (1992), and latermodified by Jacques and Nigro (1997) to study the impactof risk-based capital, is...

Advocates of fair value accounting believe that fair valuesprovide more relevant measures of assets, liabilities, andearnings than do historical costs. These advocates assertthat fair value accounting better reflects underlying economicvalues. The advantages of this method—and thecorresponding...

Bank supervisors have long recognized two types of shortcomingsin the Basle Accord’s risk-based capital (RBC)framework. First, the regulatory measures of “capital” maynot represent a bank’s true capacity to absorb unexpectedlosses. Deficiencies in reported loan loss reserves, forexample,...

This paper describes a new and intuitive methodfor answering these technical questions by tabulating theexact loss distribution arising from correlated credit eventsfor any arbitrary portfolio of counterparty exposures, downto the individual contract level, with the losses measuredon a...