Sound Banking

Wednesday, May 15th, 2019

The jury is still out on whether Dodd-Frank has made the financial system more robust. But we are starting to get a clearer picture of what impact it has had on compliance cost, bank lending, and bank consolidation.

Thursday, April 4th, 2019

Why wouldn’t we want safe and stable banks? Like almost everything else in economics, benefits in one area comes with real costs in others.

Tuesday, March 26th, 2019

Successful banks move resources from lower-value to higher-value uses while unsuccessful banks move resources from higher-value to lower-value uses.

Thursday, February 21st, 2019

Some politicians are calling for the return of postal banking. Should we heed their call?

Monday, January 14th, 2019

We can’t predict exactly what solutions will emerge from financial liberalization. The results will likely differ from country to country or region to region, depending on unique cultural and socio-economic factors.

Thursday, December 27th, 2018

A new NBER working paper raises doubts about the welfare gains from mobile banking.

 

Thursday, November 15th, 2018

A new NBER working paper uses bank-level financial and county-level agricultural data to show how risky lending might amplify the boom and bust.

 

Thursday, September 27th, 2018

Historically, fractional-reserve banks have always won out against their full-reserve cousins. But times have changed.

Tuesday, July 24th, 2018

Expectations of government bailouts drove the increase and decline of American banks’ market value to book value, according to a new NBER working paper.

Tuesday, June 26th, 2018

The complexity of credit markets creates difficulty for teaching monetary theory purely through reference to observed data. An appropriate framing should follow the evolution of money and credit.

Tuesday, June 19th, 2018

In the case of Argentina, three particular problems call into question the “surprise” explanation of the currency crisis.

Friday, May 11th, 2018

A decade ago, I was a fractional-reserve banking skeptic. Today, I’m all for it. Here’s why.

Wednesday, April 18th, 2018

If the language of commerce is quid pro quo, money is its grammar.

Tuesday, January 30th, 2018

A new NBER paper shows that credit-induced banking panics are the exception, not the rule.

Thursday, December 14th, 2017

The Fed's balance sheet crowds out bank lending, stifling economic growth.

Monday, September 25th, 2017

The ceiling is often likened to a credit-card limit, but that’s a bad analogy. The federal government doesn't have a debt limit at all. It has a debt sky.

Tuesday, May 2nd, 2017

Americans spend $400 billion dollars per year to comply with the tax code. Americans also dedicate 9 billion hours of labor to comply with the current tax code. Beyond costly compliance, the current tax code distorts investment and work decisions in the economy. Something needs to be done to simplify the tax code and make it pro-growth. 

Friday, April 28th, 2017

When people refer to the national debt, they almost always mean the debt owed by our government. But there are actually two important types of debt in the American economy: government debt, and private debt owed by households and businesses.

Tuesday, April 25th, 2017

Many economists have argued that government mortgage programs and low interest rates policies caused the 2008 financial crisis. We maintain that government deposits insurance, provided in the United States by the Federal Deposit Insurance Corporation (or FDIC), may have also been a contributing factor. By failing to price risk fairly, the FDIC encourages banks to increase their risk-taking activities.

Friday, April 14th, 2017

The level and growth of a nation’s private debt, more than public debt, predicts the worst recessions.

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