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Articles 1 - 30 of 46
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Lessons Learned: Eric Rosengren, Steven Kelly
Lessons Learned: Eric Rosengren, Steven Kelly
Journal of Financial Crises
Eric Rosengren began working at the Federal Reserve Bank of Boston in 1985 and ultimately served as its president and CEO from 2007 to 2021, including during the Global Financial Crisis (GFC) and the COVID-19 crisis. He met with the Yale Program on Financial Stability (YPFS) to share insights related to the Federal Reserve’s crisis responses—particularly those during the pandemic. This Lessons Learned is based on an interview conducted with Rosengren on February 6, 2023
Lessons Learned: John Oros, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Lessons Learned: John Oros, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Journal of Financial Crises
John Oros was managing director at the private investment firm J.C. Flowers & Co. (JCF) during the Global Financial Crisis of 2007–2009 (GFC); he is now an operating partner at the firm. In the fall of 2008, Oros worked as a senior member of the JCF team on projects involving Lehman Brothers, Merrill Lynch, and American International Group [AIG], as these firms were negotiating with lending banks, investment companies, and federal regulators to avoid collapse. Earlier in his career, Oros served as chairman of the Federal Savings and Loan Council from 1987 to 1989, during the savings and loan (S&L) …
Lessons Learned: Zoltan Pozsar, Sandra Ward
Lessons Learned: Zoltan Pozsar, Sandra Ward
Journal of Financial Crises
While working as a senior trader and analyst with the Federal Reserve Bank of New York’s Markets Group in 2008–11, Zoltan Pozsar became intrigued by the existence of a “shadow banking system” involving securitized assets. He dedicated himself to understanding the linkages of the then obscure and overlooked asset-backed securities (ABS) market and the role it played in keeping markets liquid and functioning. Pozsar’s research laid the groundwork for the Term Asset-Backed Securities Loan Facility, or TALF, which was instrumental in restarting the flow of credit during the Global Financial Crisis. This “Lessons Learned” is based on an interview with …
Lessons Learned: Clay Lowery, Yasemin Esmen, Rosalind Z. Wiggins
Lessons Learned: Clay Lowery, Yasemin Esmen, Rosalind Z. Wiggins
Journal of Financial Crises
Clay Lowery was assistant secretary for international affairs at the US Treasury during the Global Financial Crisis (GFC). His office was responsible for economic and financial diplomacy, international monetary affairs, debt strategy, global financial services, and US participation at the International Monetary Fund (IMF). This “Lessons Learned” is based on an interview with Lowery in September 2019.
Lessons Learned: William B. English, Sandra Ward
Lessons Learned: William B. English, Sandra Ward
Journal of Financial Crises
Bill English, a longtime veteran of the Federal Reserve Board, served as deputy director of the Division of Monetary Affairs from 2008 to 2010, a position that put him close to many of the critical decisions made in response to fast-moving developments at the height of the Global Financial Crisis (GFC) and the subsequent recession. In 2010, he was elevated to the post of director of the division and secretary to the Federal Open Market Committee (FOMC). Since 2016, he has been at the Yale School of Management, where he now is the Eugene F. Williams, Jr., Professor of the …
Anatomy Of The Repo Rate Spikes In September 2019, R. Jay Kahn, Matthew Mccormick, Vy Nguyen, Mark Paddrik, H. Peyton Young
Anatomy Of The Repo Rate Spikes In September 2019, R. Jay Kahn, Matthew Mccormick, Vy Nguyen, Mark Paddrik, H. Peyton Young
Journal of Financial Crises
Repurchase agreement (repo) markets represent one of the largest sources of funding and risk transformation in the US financial system. Despite the large volume, repo rates can be quite volatile, and in the extreme, they have exhibited intraday spikes that are five to 10 times the rate on a typical day. This paper uses a unique combination of intraday timing data from the repo market to examine the potential causes of the dramatic spike in repo rates in mid-September 2019. We conclude that, in large part, the spike resulted from a confluence of factors that, when taken individually, would not …
Lessons Learned: Michele Davis, Mercedes Cardona, Rosalind Z. Wiggins
Lessons Learned: Michele Davis, Mercedes Cardona, Rosalind Z. Wiggins
Journal of Financial Crises
Michele Davis was assistant secretary for public affairs and director of policy planning under US Treasury Secretary Henry M. Paulson, Jr., from 2006 until January 2009. She had held the same job under Secretary Paul O’Neill from 2001 to 2002. Davis had returned to the Treasury after a stint in the George W. Bush White House, where she was deputy assistant to the president and deputy national security adviser for global communications from 2005 to 2006. Before working in the White House, she had been a senior VP at Fannie Mae. This “Lessons Learned” is based on an interview with …
Lessons Learned: Faith Schwartz, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Lessons Learned: Faith Schwartz, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Journal of Financial Crises
In October 2007, at the start of the Global Financial Crisis (GFC), Faith Schwartz was recruited by the US Department of the Treasury to organize the Hope Now Alliance, a public-private partnership she led through 2012. Its mission was to assist homeowners looking to modify their loans and avoid foreclosure. Several of the innovations and protections Hope Now implemented became law through the passage of the Dodd-Frank Act in 2010. In 2016, Schwartz founded Housing Finance Strategies and is its chief executive officer. This “Lessons Learned” is based on an interview held with Schwartz in November 2021.
Lessons Learned: Diane Thompson, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Lessons Learned: Diane Thompson, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Journal of Financial Crises
Diane Thompson was of counsel at the National Consumer Law Center from 2006 to 2014, conducting policy advocacy on legal issues affecting low-income consumers during the housing crisis. Subsequently, she joined the new Consumer Financial Protection Bureau (CFPB), where she led the development of and provided guidance on federal consumer regulations in the areas of mortgage, fair lending, debt collection, credit reporting, and student loan servicing. She currently leads the Consumer Rights Regulatory Engagement and Advocacy Project, which she founded in 2020 to promote inclusive public engagement in regulatory work, particularly for low-income communities and communities of color and since …
Lessons Learned: Klaus Regling, Maryann Haggerty
Lessons Learned: Klaus Regling, Maryann Haggerty
Journal of Financial Crises
From 2001 to 2008, Klaus Regling was director general for economic and financial affairs of the European Commission. He is now the managing director of the European Stability Mechanism (ESM) and also ran its predecessor organization, the European Financial Stability Facility (EFSF). Regling, who is an economist, has worked for the International Monetary Fund (IMF) and with the German Ministry of Finance. This “Lessons Learned” is based on an interview with Regling in March 2021.
Lessons Learned: Matthew Rutherford, Mercedes Cardona
Lessons Learned: Matthew Rutherford, Mercedes Cardona
Journal of Financial Crises
Matthew Rutherford served as the deputy assistant secretary for federal finance at the US Department of the Treasury from 2009 to 2012, before becoming assistant secretary for fi-nancial markets. During his tenure, Rutherford generated reports on the status of mortgage-backed securities wind-downs purchased by the Treasury to stabilize financial and housing markets under the Housing and Economic Recovery Act (HERA). Before joining Treasury, Rutherford worked for the Federal Reserve Bank of New York (FRBNY) and served as liaison with Treasury on the Bank’s behalf. He also helped establish the Department’s Markets Room. This “Lessons Learned” is based on an interview …
Lessons Learned: Spiros Pantelias, Maryann Haggerty
Lessons Learned: Spiros Pantelias, Maryann Haggerty
Journal of Financial Crises
Spiros Pantelias, an economist and investment banker, was an adviser to the governor of the Bank of Greece from late 2011 until early 2016. In that post, he was responsible for projects related to the reform of the domestic banking sector as envisaged by the Memorandum of Economic and Financial Policies (MEFP) and the Memorandum of Understanding (MOU) of the Hellenic Republic’s Economic Adjustment Program, two of the three international bailout efforts undertaken to return the nation to financial stability in the wake of its sovereign debt crisis. He is currently director for general and prudential supervision and resolution for …
Lessons Learned: Sandra Braunstein, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Lessons Learned: Sandra Braunstein, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Journal of Financial Crises
Sandra Braunstein served as the director of the Division of Consumer and Community Affairs (DCCA) at the Federal Reserve Board of Governors from 2004 to 2014. Braunstein’s leadership resulted in regulatory reforms in the mortgage market and the Truth in Lending Act and Home Ownership and Equity Protection Act. She helped assure the smooth transition of consumer protection responsibilities and appropriate staff from the Federal Reserve System to the new Consumer Financial Protection Bureau (CFPB). After 27 years of service dedicated to consumer protection, Braunstein retired in 2014. This “Lessons Learned” is based on an interview with Braunstein in October …
Lessons Learned: Neil Barofsky, Mercedes Cardona
Lessons Learned: Neil Barofsky, Mercedes Cardona
Journal of Financial Crises
Neil Barofsky served as the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) from 2009 until 2011. Barofsky, a former prosecutor, established and supervised the audit division that monitored the financial assistance provided as part of the $700 billion TARP. This “Lessons Learned” is based on an interview with Mr. Barofsky in September 2021.
Zombification And Central Bank Risk-Taking: The Lender Of Last Resort As A Signal Extraction Problem, Ulrich K. Bindseil, Juliusz Jablecki
Zombification And Central Bank Risk-Taking: The Lender Of Last Resort As A Signal Extraction Problem, Ulrich K. Bindseil, Juliusz Jablecki
Journal of Financial Crises
In the liquidity crises since 2008, central banks have extended the ability of banks to take recourse to central bank credit operations through changes of the collateral framework. Remarkably, in March 2020, the European Central Bank (ECB) even lowered haircuts across a broad range of assets, and the Federal Reserve in March 2023 established a credit facility with securities accepted at par (without any haircut). Although such measures aim at stabilizing the banking system, some observers have warned that they would increase central bank risk exposure, encourage moral hazard, and ultimately lead to inefficiencies, as wasteful enterprises and “zombie” firms …
Lessons Learned: Daleep Singh, Steven Kelly
Lessons Learned: Daleep Singh, Steven Kelly
Journal of Financial Crises
Daleep Singh served as head of the Markets Group at the Federal Reserve Bank of New York (FRBNY) from February 2020 to February 2021. In this leading role, he helped to formulate and effect the Fed’s response to the COVID-19 crisis. He met with the Yale Program on Financial Stability (YPFS) to share insights related to the Fed’s crisis responses during the pandemic. This Lessons Learned is based on an interview held with Singh on November 19, 2022.
Lessons Learned: Patricia Mosser, Manuel León Hoyos
Lessons Learned: Patricia Mosser, Manuel León Hoyos
Journal of Financial Crises
During the 2007–2009 Global Financial Crisis (GFC), Patricia Mosser was senior vice president in the Markets Group at the Federal Reserve Bank of New York. Mosser oversaw market analysis, monetary policy implementation, many crisis-related liquidity facilities, foreign exchange operations, and analysis of financial stability and reform. She was also responsible for the analytical work of the Markets Group on global financial conditions. Currently, Mosser is the director of the masters of public administration program in economic policy management and senior research scholar of international and public affairs at the Columbia School of International and Public Affairs. She leads the school’s …
Lessons Learned: Raghuram Rajan, Matthew A. Lieber
Lessons Learned: Raghuram Rajan, Matthew A. Lieber
Journal of Financial Crises
Raghuram Rajan, a University of Chicago professor of economics and finance, served as director of research at the International Monetary Fund (IMF) from 2003 to 2006. In 2005, Rajan warned very publicly of the risks of a financial crisis. Following his tenure at the IMF, Rajan served as chief economic adviser to India’s Finance Ministry and governor of the Reserve Bank of India. An expert on financial institutions and their effects on economic growth and development across countries, Rajan was recognized as a fellow of the American Academy of Arts and Sciences in 2009. He is co-author of Saving Capitalism …
Lessons Learned: Stefan Ingves, Maryann Haggerty
Lessons Learned: Stefan Ingves, Maryann Haggerty
Journal of Financial Crises
Stefan Ingves was head of Sweden’s central bank, the Sveriges Riksbank, from January 2006 through December 2022. During Sweden’s banking crisis of the early 1990s, he was undersecretary and head of the Financial Markets Department at the Ministry of Finance. Previously, he previously was chairman of the Basel Committee on Banking Supervision and held leadership positions at the International Monetary Fund (IMF) and the Swedish Bank Support Authority. In November 2021, he was elected to a three-year term as vice-chairman of the Bank for International Settlements (BIS). This Lessons Learned summary is based on an interview with Ingves on December …
Lessons Learned: Michael Held, Steven Kelly
Lessons Learned: Michael Held, Steven Kelly
Journal of Financial Crises
Michael Held worked at the Federal Reserve Bank of New York (FRBNY) from 1998 to 2022 and served as its general counsel during the COVID-19 crisis. He met with the Yale Program on Financial Stability (YPFS) to share insights related to the Fed’s crisis responses—particularly those during the pandemic. This Lessons Learned is based on an interview conducted with Held on June 12, 2022.
Lessons Learned: Kenneth Feinberg, Yasemin Sim Esmen
Lessons Learned: Kenneth Feinberg, Yasemin Sim Esmen
Journal of Financial Crises
Kenneth Feinberg was special master for Troubled Assets Relief Program (TARP) executive compensation at the US Department of the Treasury during the Global Financial Crisis (GFC). He was tasked with overseeing the revision of executive payments at companies that received exceptional assistance from the government during the crisis. For four decades, Feinberg has managed victim compensations for major catastrophes, including mediating resolution of Agent Orange claims and serving as special master of the September 11th Victim Compensation Fund; recently, he was hired by the Justice Department to oversee the $500 million 737 Max Victims Fund allocated for the families of …
United States: Swaps To The Bank For International Settlements And Deutsche Bundesbank, 1967, Vincient Arnold
United States: Swaps To The Bank For International Settlements And Deutsche Bundesbank, 1967, Vincient Arnold
Journal of Financial Crises
The devaluation of British sterling in November 1967 caused major disruptions in currency markets; led to concerns that the US dollar, the lynchpin of the global gold standard system, would also devalue; and threatened the stability of financial markets, particularly the market for US dollars overseas. The Federal Reserve and European central banks used a network of preexisting swap lines in the ensuing weeks to stabilize exchange rates, defend the gold standard, and calm global markets. In most cases, central banks used these swaps to stabilize exchange rates. However, the main purpose of several of these swaps was arguably to …
United States: Swaps To Mexico, 1994, Lakshimi Swaminathan, Rosalind Z. Wiggins
United States: Swaps To Mexico, 1994, Lakshimi Swaminathan, Rosalind Z. Wiggins
Journal of Financial Crises
In 1994 and 1995, Mexico faced a series of economic and financial disruptions that led it to repeatedly seek financial assistance from the United States and international financial organizations. This case study describes three episodes during which the US government used currency swap facilities to provide dollar funding to the Bank of Mexico (BoM), similar to Mexico’s 1982 crisis: (1) a temporary bilateral swap line established by the Federal Reserve and the Treasury on March 24, 1994, to provide emergency support following a political assassination, which the BoM did not draw upon; (2) a trilateral swap arrangement under the North …
United States: Central Bank Swaps To Mexico, 1982, Lakshimi Swaminathan
United States: Central Bank Swaps To Mexico, 1982, Lakshimi Swaminathan
Journal of Financial Crises
In 1982, Mexico faced a balance of payments crisis, as rising interest rates and falling oil revenues made it increasingly difficult for the government to meet interest payments on its accumulated foreign debt. This case describes three currency swap facilities that the US government used to provide dollar funding to the Bank of Mexico (BoM) during this crisis: (1) a standing, USD 700 million swap facility with the Federal Reserve, which the BoM drew upon four times between April and August 1982; (2) a one-week, USD 1 billion swap facility with the US Treasury, which the BoM drew upon once …
United States: Fima Repo Facility, 2020, Steven Kelly
United States: Fima Repo Facility, 2020, Steven Kelly
Journal of Financial Crises
On March 31, 2020, amidst historically severe strains in the US Treasury market and global dollar funding markets, the Federal Reserve announced the Foreign and International Monetary Authorities (FIMA) Repo Facility. The FIMA Repo Facility was designed to discourage foreign official Treasury sales and broadly improve foreign dollar funding markets—and ultimately the flow of credit in the United States. The facility provided renewable, overnight repurchase agreements (repos) to central banks and other international monetary authorities against Treasury collateral. This allowed approved central banks to access dollars for precautionary reasons or to pass to their domestic financial systems without engaging in …
United States: Central Bank Swaps To 14 Countries, 2007–2009, Jack French
United States: Central Bank Swaps To 14 Countries, 2007–2009, Jack French
Journal of Financial Crises
During the Global Financial Crisis of 2007–2009 (GFC), European financial institutions faced increased difficulty financing their US dollar–denominated assets as banks, money market funds, and other financial institutions pulled back funding. On December 12, 2007, the Federal Reserve announced two programs to address the situation by extending the reach of its liquidity providing operations. The programs were the Term Auction Facility, meant to improve liquidity for banks in the US, and currency swaps with European central banks, to facilitate dollar funding for financial institutions in Europe. The initial swap arrangements made up to USD 20 billion available to the European …
United States: Central Bank Swaps To 14 Countries, 2020, Benjamin Hoffner
United States: Central Bank Swaps To 14 Countries, 2020, Benjamin Hoffner
Journal of Financial Crises
The emergence of the COVID-19 pandemic during the first quarter of 2020 put strains on global US dollar funding markets. In response, on March 15, 2020, the Federal Reserve announced enhanced terms for its standing, uncapped dollar swap lines with five major central banks: the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and Swiss National Bank. These enhancements lowered the interest rate on the lines by 25 basis points (bps) to the US overnight index swap (OIS) rate plus 25 bps and made available swaps of 84-day maturities in addition to the existing schedule of …
United States: Central Bank Swaps To Five Countries, 2010–2011, Jack French
United States: Central Bank Swaps To Five Countries, 2010–2011, Jack French
Journal of Financial Crises
Following the 2007-09 financial crisis, dollar funding issues in the euro area reemerged during the first half of 2010. By late April, problems in Greece became serious, and concern about the fiscal conditions and growth prospects in Europe heightened. On May 9 and 10, 2010, the Fed reestablished temporary US dollar liquidity swap lines with the European Central Bank (ECB), Bank of England (BoE), Bank of Canada (BoC), Swiss National Bank (SNB), and Bank of Japan (BoJ); similar previous swap lines had expired in February 2010. The Fed’s press release said the purpose of the swap lines was to “improve …
Switzerland: Central Bank Swaps To The Eurozone, Poland, And Hungary, 2008–2009, Jack French
Switzerland: Central Bank Swaps To The Eurozone, Poland, And Hungary, 2008–2009, Jack French
Journal of Financial Crises
Prior to the Global Financial Crisis, Swiss banks made significant Swiss franc loans to financial institutions in several European countries. By the fall of 2008, many of those Swiss banks were unwilling or unable to continue refinancing those loans. In mid-September 2008, following the collapse of Lehman Brothers, short-term interest rates in the Swiss franc money market rose significantly. Banks throughout Europe, particularly in Poland and Hungary, had borrowed Swiss francs and lent them to households to buy real estate. As their domestic currencies lost value relative to the Swiss franc, a relative safe haven currency, borrowers in these countries …
United States: Central Bank Swaps To The Eurozone, Uk, And Canada, 2001, Jack French
United States: Central Bank Swaps To The Eurozone, Uk, And Canada, 2001, Jack French
Journal of Financial Crises
The September 11, 2001, attacks on New York City damaged much of the infrastructure that powered US bank payments systems and the government securities market. The Federal Reserve responded quickly with several measures to inject liquidity and promote confidence in the domestic financial system. It also created or expanded swap lines with foreign central banks between September 12 and 14 to provide dollar liquidity to financial institutions with US dollar funding needs. The swap agreements allowed the European Central Bank (ECB) to draw up to USD 50 billion, the Bank of England (BoE) up to USD 30 billion, and the …