Archive

The Federal Reserve is experiencing something new in its history: sustained and sizable operating losses. These losses—currently running at more than $100 billion a year on an annualized basis—stem largely from the sharp rise in short-term interest rates, which has increased the interest the Fed pays on bank reserves while the income from its long-term securities portfolio remains comparatively low.

Monetary policy should be guided much more by financial sector developments and much less by near-term targets for inflation.

Central banks can encourage climate-friendly investments by offering financial institutions favorable haircuts on green collateral

How could the new SDR allocation help developing countries?

By helping abate the liquidity crisis, incidences of banks becoming insolvent are reduced, and hence moral hazard in its severest form is minimized.

Despite post-2008 regulations, the boom-bust credit cycle continues to run wild

A look at Dodd-Frank’s impact