Financial technology (FinTech) revolutionizes the way in which financial services are rendered. Although the phenomenon is not new, it has taken on a novel dimension. Markets which were once national are morphing into global ones. The interest in regulating them not only exists, but to some...

During the end of the past economic expansion, agents were over optimistic about the increasing path of asset prices and their corresponding low risk. This confidence based on an opaque real risk levels as well as on historically low interest rates, contributed to a rapid growth of credit...

We summarize and evaluate Fannie Mae and Freddie Mac's credit risk transfer (CRT) programs, which have been used since 2013 to shift a portion of credit risk on more than $1.8 trillion of mortgages to private sector investors. We argue that the CRT programs have been successful in reducing the...

Only a generation ago, UK investment markets were regulated by self-governing exchanges. Though independent exchanges still exist, investment markets have become regulated in ever more detailed ways by statutory bodies such as the Financial Services Authority. These bodies have no clear lines of...

Clearinghouses are systemic nodes in financial markets that handle trillions of dollars’ worth of transactions. Yet, these critical market infrastructures stand on fragile foundations. The Dodd-Frank Wall Street Reform Act of 2010, the sweeping financial reform that followed the 2008 financial...

Reforming regulation of the financial sector is currently among the most immediate concerns of domestic and international policymakers. Proposals for such reform are proliferating, and the official sector appears committed to adopting at least some meaningful reforms in the near-term. Broadly...

We model the behavior of dealers in Over-the-Counter (OTC) derivatives markets where a small number of dealers trade with a continuum of heterogeneous clients (hedgers). Imperfect competition and (endogenous) default induce a familiar trade-off between competition and risk. Increasing the number...

The Financial Sector Reforms Commission (FSLRC) which was set up in 2011 by the Ministry of Finance was mandated to study existing legislation and financial sector regulatory practices in India and to propose improvements. The FSLRC submitted its report in 2013 and four of its members recorded...

We propose a regulatory approach for restricting debt financing as an amplification mechanism across the financial system. A small stylised model illustrates the trade-off between static and time varying limits on leverage in dampening the financial cycle. The policy section proposes its...