We continue to struggle with the legacy of the 2008 financial crisis, which was fundamentally caused by the incurrence of too much leverage on the part of all economic participants, including individuals, private firms and financial institutions, and governments. Despite continued high...

Now that Congress has passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulators promulgating the rules under this new bill must tackle a major problem that the reform bill addresses only indirectly. This is the problem of excessive “leverage” – financing with too...

This paper explores the impacts of the Federal Funds Rate (FFR), a significant money market indicator, on the prime lending rates offered by commercial banks. Prior to 1994, the FFR had lagged effects on prime rates, but since the second quarter of 1994, the Federal Reserve Bank has implemented...

Financial markets have experienced unprecedented transformations, signs of which have emerged since the late 1970s. In recent years substantial consolidation occurred. In response to changes in macroeconomic variables, such as GDP, industrial production, inflation and the political business...

We analyze the behavior of an array of financial assets around European Central Bank (ECB) monetary policy decisions. We document that European and U.S. equities accumulate sizeable excess returns in the week ahead of an announcement. Pre-ECB announcement returns are stronger from the...

This research investigates Banks' profitability in the United Arab Emirates from 2008 to 2012 using Bankscope Data Base, Financial Statement, and quantitative methodology techniques. This study focuses on 4 banks, 2 Islamic banks (Dubai Islamic Bank PJSC, Abu Dhabi Islamic Bank - Public Joint...

This paper studies the reactions of commercial banks to the changes in monetary policy tools in mid-1994, when the Federal Reserve Bank altered its policy implicitly targeting the Federal Funds Rate (FFR). Prior to 1994, the FFR had affected, with a considerable lag, the Prime Rate. However,...

The U.S financial crisis started in October 2005. The level of new home starts would have replaced the total owner occupied housing stock in 37 years. Much faster than desirable. Mortgage interest rates also went up in same month. In 2006 mortgage lending went on unabated, but housing values did...

MODERN MONETARY THEORY (MMT) notes correctly that money is a creature of the state, and that important macroeconomic and policy conclusions follow from this understanding, e.g., sovereign states are not revenue constrained and spending is primarily limited by inflation. Taxes give value to state...