America's Political Crisis: The Unsustainable State in a Time of Unraveling

2009 ◽  
Vol 42 (02) ◽  
pp. 277-285 ◽  
Author(s):  
Lawrence Jacobs ◽  
Desmond King
Keyword(s):  
Political Crisis ◽  
Federal Reserve Bank ◽  
International Group ◽  
The Great Depression ◽  
Fannie Mae ◽  
Reserve Bank ◽  
Lehman Brothers ◽  
Freddie Mac ◽  
American Economy ◽  
The U.S

The American economy and financial system is experiencing upheaval on a scale not seen since the Great Depression of the 1930s. A number of the largest and most established banks and investment firms have declared bankruptcy (including Bear Stearns and Lehman Brothers) or been taken over at fire-sale rates (as was the case, for example, with Merrill Lynch). In the fall of 2008, Congress and the U.S. Treasury along with the Federal Reserve Bank committed more than eight trillion dollars in payments, loans, and guarantees of various sorts to prop up financial institutions (including the semi-governmental mortgage entities, Fannie Mae and Freddie Mac) as well as the country's largest insurer, American International Group (AIG). The speed, number, and scope of these interventions lack historical precedent.

scholarly journals Capital Adequacy and Liquidity of Global Financial Institutions: A Study of Reforms after the Great Recession

2019 ◽  
Vol 5 (4) ◽  
pp. p419
Author(s):  
Mehdi Monadjemi ◽  
John Lodewijks
Keyword(s):  
Financial Institutions ◽  
Great Recession ◽  
Federal Reserve ◽  
Financial Crises ◽  
Central Banks ◽  
Capital Adequacy ◽  
Federal Reserve Bank ◽  
The Great Recession ◽  
The Great Depression ◽  
Reserve Bank

The global financial crises of 2007-2009 was followed by the Great Recession which was the worst since the Great Depression of 1930s. The crises left significant adverse effects on global growth and employment. Policymakers of affected countries responded differently to the outcomes of these crises. The central banks, including US Federal Reserve Bank and Bank of England, provided ample liquidity for the financial institutions and lowered the interest rate to near zero. The policymakers and regulators realized that capital inadequacy and insufficient liquidity of financial institutions were the main problems preventing the financial firms to protect themselves against major financial crises. In addition, lack of guidelines for compensations encourages managers to take the extra risks. The US Federal Reserve Bank took the initiative, in cooperation with international central banks to introduce rules and regulations to safeguard the financial systems against another major crisis. It is not guaranteed that another episode of financial instability will not happen again. However, with existing regulations on financial institutions in force, the severity of the crises on the whole global financial system may possibly become weaker. This is a conjecture we explore here.

Method of Collecting Exchange Rates for the Calculation of the Value of the SDR for the purposes of Rule 0-2(a)

Policy Papers ◽  
2016 ◽  
Vol 16 (60) ◽  
Author(s):  
Keyword(s):  
New York ◽  
Central Bank ◽  
Exchange Rates ◽  
Federal Reserve ◽  
European Central Bank ◽  
Federal Reserve Bank ◽  
European Central ◽  
Reserve Bank ◽  
Bank Of England ◽  
The U.S

This paper proposes modifications to the method of collecting exchange rates for the calculation of the value of the SDR for the purposes of Rule O-2(a). The value of the SDR in terms of the U.S. dollar is determined daily as the sum of the equivalents in U. S. dollar values of the amounts of the currencies that comprise the SDR valuation basket (as provided in Rule O-1), calculated on the basis of exchange rates established in accordance with procedures decided from time to time by the Fund.1 The current procedures are set out in Decision No. 6709-(80/189) S, as amended by Decision No. 12157-(00/24) S, March 9, 2000 (see Annex), which specifies the method for collecting exchange rates for this purpose. Under these procedures, the relevant currency amounts are converted into U.S. dollars using daily exchange rates that are provided to the Fund by the Bank of England (BoE). If rates cannot be obtained from the BoE, they are provided by the Federal Reserve Bank of New York (FRBNY) and, if not available there, by the European Central Bank (ECB). The BoE, FRBNY, and ECB intend to rely on a new, more robust methodology to provide exchange rates to the Fund after November 1, 2016, and the proposed modifications reflect these changes.

El estado de bienestar y la crisis financiera internacional

1970 ◽  
Vol 1 (1) ◽  
pp. 16-17
Author(s):  
Andrés Escalante
Keyword(s):  
Fannie Mae ◽  
Lehman Brothers ◽  
Freddie Mac

La crisis financiera internacional que originó la actual contracción de la actividad económica mundial--que por su magnitud y tiempo ha sido bautizada por historiadores económicos como la Gran Recesión--empezó en los Estados Unidos en la década pasada con la explosión de la burbuja inmobiliaria, que consecuentemente le puso el fin al boom del sector vivienda; precipitó el colapso de instituciones públicas y privadas, como Freddie Mac, Fannie Mae y Lehman Brothers en 2008; hizo del otorgamiento de créditos hipotecarios una actividad financiera disfuncional; y generó cuantiosas pérdidas de riqueza, de las que todavía no nos recuperamos.

scholarly journals Bank size as a source of competitive advantage of Chinese global systemically important banks

2020 ◽  
pp. 30-46
Author(s):  
Magdalena Markiewicz
Keyword(s):  
Financial Institutions ◽  
System Stability ◽  
Too Big To Fail ◽  
Market Segments ◽  
Fannie Mae ◽  
Lehman Brothers ◽  
The World ◽  
The Stability ◽  
Freddie Mac ◽  
Systemically Important Banks

During the financial crisis in 2007–2009 banks all around the world suffered liquidity problems and were a subject to a system stability testing. The problems of large financial institutions, such as Bear Sterns, Fannie Mae or Freddie Mac, drew attention to the issue of financial liquidity more than ever in 2007. After the collapse of Lehman Brothers a question was raised about the stability and system security of the largest institutions in the financial system. Credit institutions recognised as systemically important, are distinguished by the enormous size of assets, which creates the risk of being too big to fail or too important to fail. The extent of links with other institutions on the market through various market segments makes them also too connected to fail.

Bailouts Without End

2020 ◽  
pp. 265-298
Author(s):  
Arthur E. Wilmarth Jr.
Keyword(s):  
Great Recession ◽  
Small Businesses ◽  
Too Big To Fail ◽  
Troubled Asset Relief Program ◽  
The Great Recession ◽  
Fannie Mae ◽  
Lehman Brothers ◽  
The World ◽  
Relief Program ◽  
Freddie Mac

The Fed’s rescue of Bear Stearns and the Treasury Department’s nationalization of Fannie Mae and Freddie Mac in 2008 provoked widespread criticism. Consequently, the Fed and Treasury were very reluctant to approve further bailouts, and they allowed Lehman Brothers to fail in September 2008. Lehman’s collapse triggered a global panic and a meltdown of financial markets around the world. The Fed and Treasury quickly arranged a bailout of AIG, and Congress approved a $700 billion financial rescue bill. Treasury established the Troubled Asset Relief Program, which injected capital into large universal banks, while the Fed provided trillions of dollars of emergency loans and the FDIC established new guarantee programs for bank debts and deposits. In February 2009, federal regulators pledged to provide any further capital that the nineteen largest U.S. banks needed to survive, thereby cementing the “too big to fail” status of U.S. megabanks. The U.K. and other European nations arranged similar bailouts for their universal banks. Meanwhile, thousands of small banks and small businesses failed, millions of people lost their jobs, and millions of families lost their homes during the Great Recession.

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