The New Triffin Dilemma

2018 ◽  
Vol 50 (4) ◽  
pp. 691-698 ◽  
Author(s):  
Ann E. Davis
Keyword(s):  
Multinational Corporations ◽  
Deposit Insurance ◽  
Jel Classification ◽  
Size Of Government ◽  
Treasury Bonds ◽  
Shadow Banks ◽  
Order Of Magnitude ◽  
Triffin Dilemma ◽  
Federal Deposit Insurance

According to Pozsar, there is a new kind of “Triffin Dilemma.” Due to rising inequality, a shrinking numbers of large banks, and a ceiling on Federal Deposit Insurance Corporation (FDIC) insured deposits, there is a shortage of “safe assets.” The private supply of safe assets has occurred through the system of shadow banks, and is based on repos, or Treasury Bonds. But the supply of US Treasury bonds is limited by the ceiling on public debt, and is constrained by neoliberal theories of limits to the size of government. As a result, there is a presumed shortage of safe assets, just when the levels of inequality have increased the order of magnitude of assets under management which are in need of protection. There are also large accumulations of cash pools by large multinational corporations, often held overseas to evade taxes. The private provision of safe assets tends to reduce liquidity and increase costs of information, potentially leading to financial instability. Possible resolutions of this issue include (1) progressive taxes to reduce the size of the cash pools, (2) an increase in the ceiling for insured deposits, and (3) increasing support by the Fed for the role of “market maker of last resort.” This paper concludes with the implications of each alternative. JEL Classification: B5, E44, G01, P1

WaMu's Option-ARM Strategy

2014 ◽  
Vol 29 (4) ◽  
pp. 557-575
Author(s):  
Robert M. Bowen ◽  
S. Jane Jollineau ◽  
Barbara A. Lougee
Keyword(s):  
Business Strategy ◽  
Deposit Insurance ◽  
Financial Statement ◽  
Financial Analyst ◽  
The Great Depression ◽  
Savings And Loan ◽  
Federal Deposit Insurance ◽  
Loan Losses

ABSTRACT At the end of 2007, Washington Mutual, Inc. (generally known as “WaMu”) was the largest savings and loan bank in the U.S., based on assets ($328 billion) and revenue ($25.5 billion). Less than nine months later, WaMu was seized by federal regulators and sold to JPMorgan Chase for $1.9 billion in a transaction facilitated by the Federal Deposit Insurance Corporation (FDIC). During the worst recession since the Great Depression, WaMu became the largest U.S. bank failure in history. This case illustrates how a financial institution's business strategy affects risk and how these characteristics are revealed in the financial statements. Students assume the role of a financial analyst examining WaMu's 2007 10-K after its release in March 2008. In particular, they evaluate the quality of WaMu's loans and the adequacy of WaMu's estimates for loan losses, one of the most important discretionary accruals for financial institutions. Students gain insights into the consequences of WaMu's business strategy to emphasize high-margin loan products by comparing WaMu to (1) the relatively conservative Wells Fargo Bank and (2) the average large FDIC bank. This case has been used successfully in graduate-level financial statement analysis courses.

10 The US Paradigm: Deposit Insurer as Resolution Authority

2015 ◽  
Author(s):  
Kleftouri Nikoletta
Keyword(s):  
Deposit Insurance ◽  
The United States ◽  
Insurance Fund ◽  
Single Institution ◽  
Successful Model ◽  
Bank Resolution ◽  
Large Numbers ◽  
The Us ◽  
Federal Deposit Insurance

Banking crises prompted the United States to make lending of last resort, deposit insurance, and bank resolution federal responsibilities long before banks crossed state lines in large numbers. The US system offers an existing and successful model, whereby the deposit insurance and resolution functions are combined under a single institution, the Federal Deposit Insurance Corporation. The key objective underpinning the FDIC’s choice among different resolution options is that the chosen resolution is that which would result in the least cost to the deposit insurance fund. This chapter sets out the role of the FDIC as the deposit insurer, supervisor, and resolution authority, while also examining some key principles of the US approach to dealing with failing banks.

Reshaping the Economic Structure in Argentina: The Role of External Debt during the Macri Administration (2015–2019)

2021 ◽  
pp. 048661342097642
Author(s):  
Juan E. Santarcángelo ◽  
Juan Manuel Padín
Keyword(s):  
External Debt ◽  
Economic Structure ◽  
The United States ◽  
Jel Classification ◽  
Financial Capital ◽  
Economic Policies ◽  
Right Wing ◽  
Long Term Effects

Argentina’s right-wing shift in the 2015 presidential election concluded twelve years of center-left rule. The elected president, Mauricio Macri, claimed that the economy would experience normalization of existing imbalances and recover its strength in a “new political era.” However, the new administration quickly restored the dominance of neoliberal economic policies through a comprehensive set of initiatives, which centrally included the return to international financial debt and equity markets and submission to the International Monetary Fund’s (IMF) rules. This article analyzes Argentina’s external-debt-growth process and discusses its objectives and long-term effects. This paper posits that the indebtedness process carried out by the Macri administration—and its modality—not only increased the relevance of financial capital in the Argentine economy but also structurally conditioned any future nonorthodox alternative path of development. This outcome cannot be understood without taking into account the deliberate role of the United States, the IMF, and the top companies that operate in Argentina, as well as the complicity of many political sectors. JEL Classification: H63, F34, F63

Financial Access of Latin America and Caribbean Firms: What Are the Roles of Institutional, Financial, and Economic Development?

2021 ◽  
pp. 097265272110153
Author(s):  
Lan Khanh Chu
Keyword(s):  
Economic Development ◽  
Latin America ◽  
Jel Classification ◽  
Caribbean Region ◽  
Country Level ◽  
Level Data ◽  
Latin America And Caribbean ◽  
The Impact ◽  
Moderating Role

This article examines the impact of institutional, financial, and economic development on firms’ access to finance in Latin America and Caribbean region. Based on firm- and country-level data from the World Bank databases, we employ an ordered logit model to understand the direct and moderating role of institutional, financial, and economic development in determining firms’ financial obstacles. The results show that older, larger, facing less competition and regulation burden, foreign owned, and affiliated firms report lower obstacles to finance. Second, better macro-fundamentals help to lessen the level of obstacles substantially. Third, the role of institutions in promoting firms’ inclusive finance is quite different to the role of financial development and economic growth. JEL classification: E02; G10; O16; P48

Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital

1981 ◽  
Vol 36 (1) ◽  
pp. 51 ◽  
Author(s):  
Stephen A. Buser ◽  
Andrew H. Chen ◽  
Edward J. Kane
Keyword(s):  
Deposit Insurance ◽  
Regulatory Policy ◽  
Bank Capital ◽  
Federal Deposit Insurance

Determinants of U.S. Exports to China

2008 ◽  
Vol 7 (3) ◽  
pp. 1-26 ◽  
Author(s):  
Barry Bosworth ◽  
Susan M. Collins
Keyword(s):  
United States ◽  
Multinational Corporations ◽  
Peer Group ◽  
Initial Point ◽  
The United States ◽  
Market Size ◽  
Gravity Equations ◽  
Point Of Departure ◽  
The Eu

This paper examines U.S. goods trade with China, focusing on the performance of exports. Throughout the analysis, we explore whether U.S. trade is unusual by contrasting it with trade from Japan and the EU-15.1 The issue is examined from three perspectives: the commodity composition of exports, the role of multinational corporations (MNCs), and the determinants of trade as specified in a formal “gravity model.” As an initial point of departure, we show that the commodity composition of U.S. exports to China is similar to the pattern of exports to the world as a whole, and that the operations of U.S. MNCs have only minor implications for trade with China. Consequently, we emphasize the estimation of a set of “gravity equations” that explore the role of market size and distance from the United States. Distance exerts a surprisingly large effect on trade. Finally, although exports to China may be a small share of U.S. GDP, they are relatively substantial compared to U.S. exports to other countries. In other words, the measure of U.S. trade performance in China is distorted by the low level of its exports to all countries. We present evidence that the United States underperforms as an exporter relative to a peer group of high-income European countries and Japan.

Concorrenza e regolazione nel settore ferroviario: l'importanza del materiale rotabile

2009 ◽  
pp. 47-72
Author(s):  
Carlo Cambini
Keyword(s):  
Jel Classification ◽  
Railway Transport ◽  
Transport Regulation ◽  
Market Competitiveness ◽  
Railway Industry ◽  
Pros And Cons ◽  
Overall Efficiency ◽  
Barrier To Entry ◽  
The Uk

- The liberalization process in the railway industry is highly influenced by the availability of rolling stocks. Although these assets are duplicable and cannot therefore be defined as essential facilities, evidence from many countries shows that they represent the most relevant barrier to entry in the market. In this paper, following the UK experience, we analyse the role of the rolling stocks and the hypothesis of a vertical separation of these assets from the present owner, i.e. the incumbent operator Trenitalia SpA. We therefore evaluate the pros and cons of a potential de-integration of the Italian railway industry in order to enhance market competitiveness and the overall efficiency of this industry. . Keywords: railway transport, regulation, competition, essential facilities Parole chiave: trasporto ferroviario, regolazione, concorrenza, asset essenziali . Jel Classification: L43 - L51 - L92

Features of financing the production of intellectual product of transnational corporations

2021 ◽  
pp. 69-75
Author(s):  
Svitlana Frunza ◽  
Liudmyla Romaniuk ◽  
Daria Nasypaiko
Keyword(s):  
Research And Development ◽  
Multinational Corporations ◽  
Strategic Alliances ◽  
Financial Management ◽  
Transnational Corporations ◽  
Multinational Companies ◽  
Economic Relations ◽  
Global Innovation ◽  
Innovation Economy

The purpose of the article is to study the features of financing the production of intellectual products of multinational corporations in the context of globalization. Research methodology – system-structural and comparative research (to understand the logic of financing the production of intellectual products of multinational corporations), statistical and economic analysis (in assessing the status and prospects of the role of transnational corporations). The scientific novelty is to substantiate the peculiarities of financial management in multinational companies and to determine the main aspects of international financial management, which will increase the production of intellectual products of multinational corporations and the development of international economic relations. The article identifies the distinctive features of modern multinational companies and technologically sound strategies that contribute to their economic success. The main ways to obtain long- term investments and the peculiarities of the formation of strategic alliances and their agreements are clarified. Various forms of international cooperation are considered. Conclusions. According to the results of the study, it was concluded that the role of transnational corporations is growing, which is determined by their participation in world gross domestic product, increasing the share of international movement of capital, labor and other resources. Their importance in the world economy is evidenced by the scale of foreign operations in all sectors and areas of social production. The main obstacles to the financing of multinational corporations are the disagreement of the interests of companies and governments of the host countries, taking into account economic, political, monetary, financial and legal risks. Ukraine is able to use the model of open innovation networks as a key to entering the global innovation economy in line with current trends. Keywords: transnational corporations, transnationalization, investments, innovations, research and development, research and development works.

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