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Full-Text Articles in Finance and Financial Management
Lessons Learned: Richard “Jake” Siewert, Mercedes Cardona
Lessons Learned: Richard “Jake” Siewert, Mercedes Cardona
Journal of Financial Crises
Siewert served as counselor to US Treasury Secretary Timothy Geithner from 2009 to 2011 during the Global Financial Crisis of 2007–09 (GFC). He had previously served in the Clinton administration, including as a special assistant to the president for economic affairs, at the National Economic Council, and as deputy White House press secretary. He also handled the press secretary duties from September 30, 2000, to January 20, 2001. This “Lessons Learned” is based on an interview with Mr. Siewert.
Lessons Learned: Jason Furman, Mercedes Cardona
Lessons Learned: Jason Furman, Mercedes Cardona
Journal of Financial Crises
Jason Furman was a top economic adviser to the successful presidential campaign of Barack Obama in 2008. He played a key role in most of President Obama’s major economic policies during and in the aftermath of the Global Financial Crisis of 2007–09. Furman, who had served at both the Council of Economic Advisers and National Economic Council during the Clinton administration, served as Chairman of the Council of Economic Advisers from August 2013 to January 2017, acting as President Obama’s chief economist and a member of the cabinet. He is currently Professor of the Practice of Economic Policy at the …
Danish Capital Injections Scheme 2009 (Dk Gfc), Priya Sankar
Danish Capital Injections Scheme 2009 (Dk Gfc), Priya Sankar
Journal of Financial Crises
Both the international financial system and Denmark were experiencing challenges in 2007 and 2008, and they came to a head in Denmark when Roskilde Bank experienced liquidity pressures in June 2008. As it became clear that Roskilde Bank was insolvent and no private solutions would be found, and as the global financial crisis worsened leading to the bankruptcy of Lehman Brothers, the Danish government decided to take stronger action. To ensure the short-term survival of Roskilde Bank, the national bank issued a non-limited credit facility. After it passed a deposit guarantee scheme in 2008 and established a Financial Stability Company, …
Spain: Sociedad De Gestión De Activos Procedentes De La Reestructuración Bancaria (Sareb), David Tam, Sean Fulmer
Spain: Sociedad De Gestión De Activos Procedentes De La Reestructuración Bancaria (Sareb), David Tam, Sean Fulmer
Journal of Financial Crises
In the wake of the Global Financial Crisis, the Spanish real estate market struggled to recover, which posed significant issues for savings banks that had an outsized exposure to the real estate sector. The Spanish government created Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria (SAREB) in 2012 to buy impaired real estate assets from troubled banks and sell them over a 15-year period using funds from an up to €100 billion ($123 billion) loan from the European Financial Stability Facility. Its mandate was “to help clean up the Spanish financial sector and, in particular, the banks that …
Asset Management Corporation Of Nigeria (Amcon): Asset Management, Pascal Ungersboeck, Corey N. Runkel
Asset Management Corporation Of Nigeria (Amcon): Asset Management, Pascal Ungersboeck, Corey N. Runkel
Journal of Financial Crises
Nigeria experienced the Global Financial Crisis as a dramatic decline in the price of crude oil and a burst stock market bubble. These losses were compounded by a high level of margin lending, resulting in large numbers of nonperforming loans (NPLs) for Nigerian banks. The government established the Asset Management Corporation of Nigeria (AMCON) in July 2010 to purchase NPLs and inject capital in insolvent banks. In three purchases between December 2010 and December 2011, AMCON acquired loans with face value ₦4.02 trillion ($26.8 billion) for ₦1.76 trillion. As a result, NPLs in Nigerian banks fell from a peak of …
The Federal Reserve’S Financial Crisis Response E: The Term Asset-Backed Securities Loan Facility, Rosalind Z. Wiggins, Andrew Metrick
The Federal Reserve’S Financial Crisis Response E: The Term Asset-Backed Securities Loan Facility, Rosalind Z. Wiggins, Andrew Metrick
Journal of Financial Crises
Securitization is a process that allows banks and other lenders to package loans and sell them as bonds called asset-backed securities (ABS), removing them from their balance sheets and immediately generating cash for new loans. ABS are an important component of the financing cycle for many types of loans to households and small businesses, including mortgages. In the fall of 2008, financial markets began experiencing disturbances as the effects of the U.S. subprime market meltdown spread. The ABS market froze decreasing the volume of new loans to households and small businesses. The Federal Reserve became very concerned about the potential …
Lessons Learned: Edwin (Ted) Truman, Yasemin Sim Esmen
Lessons Learned: Edwin (Ted) Truman, Yasemin Sim Esmen
Journal of Financial Crises
Insights on fighting financial crises from Ted Truman, an expert in responding to the international dimensions of financial crises. Topics include the initial US response to the Global Financial Crisis of 2008-2009 and the utiltiy of issuing Special Drawing Rights (SDR).
Basel Iii F: Callable Commercial Paper, Christian M. Mcnamara, Rosalind Bennett, Andrew Metrick
Basel Iii F: Callable Commercial Paper, Christian M. Mcnamara, Rosalind Bennett, Andrew Metrick
Journal of Financial Crises
One of the Basel Committee on Banking Supervision’s responses to the global financial crisis of 2007-09 was to introduce the Liquidity Coverage Ratio (LCR), a short-term measure that evaluates whether a bank has enough liquidity to meet expected cash outflows during a 30-day stress scenario. One area in which this incentive has already resulted in changed practices is in the market for commercial paper. Banks often provide backup liquidity facilities to the issuers of commercial paper that the issuers can draw upon to repay a maturing issue of commercial paper if they are unable to sell a new issue to …
Basel Iii B: Basel Iii Overview, Christian M. Mcnamara, Michael Wedow, Andrew Metrick
Basel Iii B: Basel Iii Overview, Christian M. Mcnamara, Michael Wedow, Andrew Metrick
Journal of Financial Crises
In the wake of the financial crisis of 2007-09, the Basel Committee on Banking Supervision (BCBS) faced the critical task of diagnosing what went wrong and then updating regulatory standards aimed at preventing it from occurring again. In seeking to strengthen the microprudential regulation associated with the earlier Basel Accords while also adding a macroprudential overlay, Basel III consists of proposals in three main areas intended to address 1) capital reform, 2) liquidity standards, and 3) systemic risk and interconnectedness. This case considers the causes of the 2007-09 financial crisis and what they suggest about weaknesses in the Basel regime …
Ireland And Iceland In Crisis C: Iceland’S Landsbanki Icesave, Arwin G. Zeissler, Thomas Piontek, Andrew Metrick
Ireland And Iceland In Crisis C: Iceland’S Landsbanki Icesave, Arwin G. Zeissler, Thomas Piontek, Andrew Metrick
Journal of Financial Crises
At year-end 2005, almost all of the total assets of Iceland’s banking system were concentrated in just three banks (Glitnir, Kaupthing, and Landsbanki). These banks were criticized by certain financial analysts in early 2006 for being overly dependent on wholesale funding, much of it short-term, that could easily disappear if creditors’ confidence in these banks faltered for any reason. Landsbanki, followed later by Kaupthing and then Glitnir, responded to this criticism and replaced part of their wholesale funding by using online accounts to gather deposits from individuals across Europe. In Landsbanki’s case, these new deposits were marketed under the name …
Ireland And Iceland In Crisis A: Increasing Risk In Ireland, Arwin G. Zeissler, Karen Braun-Munzinger, Andrew Metrick
Ireland And Iceland In Crisis A: Increasing Risk In Ireland, Arwin G. Zeissler, Karen Braun-Munzinger, Andrew Metrick
Journal of Financial Crises
Ireland went from being the poorest member of the European Economic Community in 1973 to enjoying the second highest per-capita income among European countries by 2007. Healthy growth in the 1990s eventually gave way to a concentrated boom in property-related lending in the 2000s. The growth in the aggregate loan balances of Ireland’s six major banks greatly exceeded the growth in gross domestic product (GDP); as a result, bank loan balances grew from 1.1 times GDP in 2000 to over 2.0 times GDP by 2007. Given the small size of the domestic retail depositor base, the Irish banks increasingly funded …