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Full-reserve banking is a system of banking where banks do not lend demand deposits and instead, only lend from time deposits. It differs from fractional-reserve banking, in which banks may lend funds on deposit, while fully reserved banks would be required to keep the full amount of each customer's demand deposits in cash, available for immediate withdrawal.
Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and provides services in investment banking, private banking, asset management, and shared services. It is known for strict bank–client confidentiality and banking secrecy. The Financial Stability Board considers it to be a global systemically important bank. Credit Suisse is also a primary dealer and Forex counterparty of the Federal Reserve in the United States.
Perry G. Mehrling is professor of economics at Pardee School of Global Studies at Boston University. He was professor of economics at Barnard College in New York City for 30 years. He specializes in the study of financial theory within the history of economics.
The First Boston Corporation was a New York-based bulge bracket investment bank, founded in 1932 and acquired by Credit Suisse in 1988. After the acquisition, it operated as an independent investment bank known as CS First Boston until 2006, when the company was fully integrated into Credit Suisse. In 2022, Credit Suisse revived the "First Boston" brand as part of an effort to spin out the business.
A primary dealer is a firm that buys government securities directly from a government, with the intention of reselling them to others, thus acting as a market maker of government securities. The government may regulate the behaviour and number of its primary dealers and impose conditions of entry. Some governments sell their securities only to primary dealers; some sell them to others as well. Governments that use primary dealers include Australia, Belgium, Brazil, Canada, China, France, Hong Kong, India, Italy, Japan, Singapore, Spain, Sweden, the United Kingdom, Pakistan and the United States.
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure. The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois. The term had previously been used occasionally in the press, and similar thinking had motivated earlier bank bailouts.
The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions of people losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).
The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations. The phrase "shadow banking" is regarded by some as pejorative, and the term "market-based finance" has been proposed as an alternative.
James Brian Bullard James “Jim” Bullard, the longest serving sitting president of Federal Reserve Banks and one of the nation’s foremost economists and respected scholar-leaders, was chosen in July 2023 as the inaugural dean of the reimagined Mitchell E. Daniels, Jr. School of Business at Purdue University.
The Great Recession was a period of marked general decline observed in national economies globally, i.e. a recession, that occurred from late 2007 to 2009. The scale and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.
The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008" or the "Wall Street bailout", was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush. It became law as part of Public Law 110-343 on October 3, 2008, in the midst of the financial crisis of 2007–2008. It created the $700 billion Troubled Asset Relief Program (TARP) to purchase toxic assets from banks. The funds were mostly redirected to inject capital into banks and other financial institutions while the Treasury continued to examine the usefulness of targeted asset purchases.
Gary Bernard Gorton is an American economist who currently serves as the Frederick Frank Class of 1954 Professor of Finance at Yale School of Management. He is known for his theory on the role of repurchase agreements on the 2008 financial crisis.
In the United States, the Great Recession was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output. This slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis.
The 2007–2008 financial crisis, or Global Financial Crisis (GFC), was a severe worldwide economic crisis that occurred in the early 21st century. It was the most serious financial crisis since the Great Depression (1929). Predatory lending targeting low-income homebuyers, excessive risk-taking by global financial institutions, and the bursting of the United States housing bubble culminated in a "perfect storm".
The eurozone crisis is an ongoing financial crisis that has made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties.
The Chinese Banking Liquidity Crisis of 2013 was a sudden credit crunch affecting China's commercial banks evidenced by a rapid rise on 20 June 2013 in the Shanghai interbank overnight lending rates to a high of 30 percent from its usual rate of less than 3%. The ensuing panic affected gold markets and stock. China's regulation of the foreign exchange market had caused a decline in inflow of cash. On 19 June 2013, instead of injecting additional funds and easing its monetary policy, China's central bank People's Bank of China (PBOC) told commercial banks to "make full use of incremental funds and revitalize stock options." On 24 June 2014 the PBOC told commercial banks to "control the risk associated with credit expansion" effectively increasing the scrutiny of shadow banks' lending practices. This resulted in a sudden shortfall in the cash market resulting in short term repo rates in excess of 25%. In effect China was using market forces to manage the economy.
David I. Meiselman was an American economist. Among his contributions to the field of economics are his work on the term structure of interest rates, the foundation today of the implementation of monetary policy by major central banks, and his work with Milton Friedman on the impact of monetary policy on the performance of the economy and inflation.
Marvin Seth Goodfriend was an American economist. He held the Allan H. Meltzer Professorship in economics at Carnegie Mellon University; he was previously the director of research at the Federal Reserve Bank of Richmond. Following his 2017 nomination to the Federal Reserve Board of Governors, the White House decided to forgo renominating Goodfriend at the beginning of the new term.
Tobias Adrian is a German and American economist who has been Financial Counsellor of the International Monetary Fund and Head of their Monetary and Capital Markets Department since 2017. He was previously employed at the Federal Reserve Bank of New York, where he was a Senior Vice President and the Associate Director of the Research and Statistics Group. His research covers aspects of risk to the wider economy of developments in capital markets. In particular, he is known for his work on the global financial crisis, monetary policy transmission, and the yield curve.
References
- 1 2 3 4 "KDI School Student in the NABE News". kdischool.ac.kr. KDI School of Public Policy and Management . Retrieved May 23, 2023.
- ↑ Nutting, Rex (February 10, 2006). "Three heads are better than one". MarketWatch . Retrieved May 23, 2023.
- 1 2 "Zoltan Pozsar". Swedish House of Finance. Stockholm School of Economics . Retrieved May 23, 2023.
- 1 2 3 Dickson, Steve (May 8, 2023). "Pozsar, Strategist Who Correctly Foresaw Repo Markets Turmoil, Exits Credit Suisse". Bloomberg News . Retrieved May 23, 2023.
- ↑ "Zoltan Pozsar Re-Emerges, Creating New Research Firm to Track Bretton Woods III". Bloomberg.com. 2023-06-30. Retrieved 2023-06-30.
- 1 2 Wigglesworth, Robin (June 23, 2022). "Meet Zoltan, the sellside Jules Verne". Financial Times . Retrieved May 23, 2023.
- ↑ "Credit Suisse economist Zoltan Pozsar leaves the bank". Reuters . May 8, 2023. Retrieved May 23, 2023.
- ↑ Grossman, Matt (May 8, 2023). "Zoltan Pozsar's Writing Is Dense, Esoteric—and a Hit. Now He's Left Credit Suisse". Wall Street Journal . Retrieved May 23, 2023.