The Bear Stearns bailout created an implicit guarantee that will create a great deal of moral hazard unless we smartly regulate investment banks in a way that doesn't destroy their value; so say Dwight Jaffee and Mark Perlow.

Larry White has created a highly useful paper that clearly lays out the reasons to privatize Fannie Mae and Freddie Mac (Famp;F) and offers a roadmap for doing so. I agree fully with the goal and his reasons for it, although below I will indicate I have a different perspective on how best to...

Factors that hinder the development of mortgage markets in transition economies and a proposed strategy to expedite their development.The transformation of the planned economies of central and eastern Europe to market economies has focused on economic stabilization and liberalization,...

This paper evaluates the interest rate risk of Fannie Mae and Freddie Mac (Famp;F) and develops related public policy proposals. Famp;F merit special attention due to (1) their potentially very large interest rate risk, and (2) their status as U.S. government sponsored enterprises. The analysis...

This paper provides a framework for analyzing the effects of symmetric and asymmetric changes in information about risk on equilibrium real interest rate spreads across countries. Following the literature on parameter uncertainty, improvements in information are modeled as reductions in...

This paper proposes long-term insurance (LTI) as an alternative to the standard annual homeowners policy using lessons from the mortgage market as a benchmark. LTI has the potential to significantly increase social welfare by reducing insurers' administrative costs, lowering search costs and...

In this paper, we first use cross-section regressions to determine the most important proximate causes of the observed structure of banking system structure for 26 developed OECD countries. Banking system structure is measured by four variables: bank assets, the number of banks, bank branches,...

We develop a model for markets for catastrophic risk. The model explains why insurance providers may choose not to offer insurance for catastrophic risks and not to participate in reinsurance markets, even though there is a large enough market capacity to reach full risk sharing through...