The Northern Rock debacle - Britain's first bank run in 141 years - was the Tripartite regulatory system's first live ammunition test since its establishment in 1997. The aftermath of the crisis lists the destruction of Britain's fifth largest mortgage lender, the tarnishing of the Bank of...

Credit affects the economy via various channels: its price, collateral requirements and the extent of rationing. Would the intensity of monetary transmission be affected by the market structure of the credit industry? Using a spatial competition framework I demonstrate how credit market...

This paper is a report to the Banking Supervision and Regulation Division on research that I conducted on the future of small banks while working in the Division as a Visiting Scholar. In this paper, small banks are identified as those with total assets less than $1 billion. Small banks have an...

Different financial systems vary in the way they contribute to the process of resource allocation in the economy and in the risk-sharing pattern that they bring about. It would therefore be plausible to expect different financial systems to differ in the way they affect real economic activity. I...

We analyze the subprime mortgage crisis: an unusually large fraction of subprime mortgages originated in 2006 being delinquent or in foreclosure only months later. We utilize a loan-level database, covering about half of all US subprime mortgages, and identify two major causes. First, over the...

We estimate potential welfare gains from financial integration and corresponding better insurance against country-specific shocks to output (risk sharing) for the twenty-five European Union countries. Using theoretical utility-based measures we express the gains from risk sharing as the utility...

Banks have been required to report many securities and all derivatives at fair values under U.S. GAAP rules for many years. Soon, International Accounting Standards will provide some banks with a “fair-value option” for loans, also. A similar movement toward applying fair values to loans may...

Starting in 1978, the U.S. banking sector was gradually deregulated in terms of restrictions on geographical expansion. This paper examines the impact of intrastate branching deregulation on (state-specific) self-employment income growth rate. If postreform changes in the banking structure led...

The consumer-finance market for middle and upper-income households in the United States is characterized by a wide range of choices, both in terms of financial-services providers and the specific products and services available.1 Prices generally are determined in competitive markets....

The natural rate of unemployment can be measured as the time-varying steady state of a structural vector autoregression. For post-War U.S. data, the natural rate implied by this approach is more volatile than most previous estimates, with its movements accounting for the bulk of the variation in...