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Full-Text Articles in Macroeconomics
Lessons Learned: Mark Van Der Weide, Matthew A. Lieber
Lessons Learned: Mark Van Der Weide, Matthew A. Lieber
Journal of Financial Crises
With more than two decades of continuing service at the Federal Reserve Board, Mark Van Der Weide brings a unique insider perspective on central bank policymaking before, during, and after the Global Financial Crisis (GFC), including the Fed’s response to the COVID-19 pandemic in 2020. From 1998 to 2009, Van Der Weide served in the Fed’s legal division. De-tailed to the Treasury Department in 2009, he helped draft the Dodd-Frank Wall Street Re-form and Consumer Protection Act of 2010. Back at the Fed in 2010, Van Der Weide served for eight years in the Division of Supervision and Regulation, where …
Lessons Learned: David Wilcox, Mercedes Cardona
Lessons Learned: David Wilcox, Mercedes Cardona
Journal of Financial Crises
David Wilcox was the deputy director of the Division of Research and Statistics of the Federal Reserve Board of Governors during the Global Financial Crisis of 2007-¬09. He assisted in developing the Federal Reserve policy response that ultimately stabilized the economy by providing insight into the economic and financial outlook to the Federal Open Market Committee (FOMC) prior to each of its policy-setting meetings. Wilcox became director of the division in 2011 and served in that role through 2018, acting as the division’s chief economist, manager, and the senior adviser to three Fed chairs. After leaving the Fed, he joined …
Thailand: Bond Stabilization Fund, Corey N. Runkel
Thailand: Bond Stabilization Fund, Corey N. Runkel
Journal of Financial Crises
Early in the COVID-19 crisis, non-financial businesses grew concerned that they would be unable to roll over their maturing bonds. To calm corporate debt markets, the Bank of Thailand (BOT) announced the Bond Stabilization Fund (BSF) on March 22, 2020. The BSF planned to purchase newly issued commercial paper from viable companies that could not roll over their maturing bonds. However, the program was not used. The BOT, seeking to avoid public criticism for directly supporting large corporations, imposed restrictions that made the program less attractive to borrowers. The main deterrent to participation was the requirement that borrowers must have …
Eurozone: Pandemic Emergency Purchase Program, Corey N. Runkel
Eurozone: Pandemic Emergency Purchase Program, Corey N. Runkel
Journal of Financial Crises
The COVID-19 pandemic quickly engulfed the European Union's economy in 2020. As investors sought safe assets, marketable debt yields rose dramatically. To lower the cost of borrowing, the European Central Bank (ECB), alongside the 19 national central banks (NCBs) that comprise the Eurosystem, purchased marketable debt in secondary markets. Asset eligibility mirrored that of the ECB's Asset Purchase Program (APP), an ongoing quantitative easing program which the ECB expanded during the pandemic. The main difference was that the PEPP allowed debt issued by Greece, which did not have an investment-grade credit rating. The rate that the PEPP purchased securities within …
Canada: Government Bond Purchase Program, Corey N. Runkel
Canada: Government Bond Purchase Program, Corey N. Runkel
Journal of Financial Crises
In Canada, the shock of the COVID-19 crisis drove up bid-ask spreads on Government of Canada (GoC) bonds. The Bank of Canada (BoC) announced the Government Bond Purchase Program (GBPP) to support the functioning of its government bond market, support other market liquidity tools, and replace the BoC's long-standing fiscal agent activities. The GBPP conducted multi-rate reverse auctions with primary dealers to purchase GoC bonds in the secondary market. The GBPP purchased bonds across the yield curve but concentrated on two- and five-year tenors. In June 2020, with CAD 64.7 billion (USD 48 billion) outstanding, the BoC announced that the …
Canada: Bankers’ Acceptance Purchase Facility, Corey N. Runkel
Canada: Bankers’ Acceptance Purchase Facility, Corey N. Runkel
Journal of Financial Crises
Bankers’ acceptances (BAs) are a form of investment security guaranteed by banks to fund loans to businesses against their credit lines. In Canada, BAs underpin the Canadian Dollar Offered Rate (CDOR), the main benchmark used to calculate floating interest rates in Canada’s derivatives market. In 2018, BAs formed the largest segment of money market securities traded in the secondary market at around CAD 35 billion (USD 26 billion) per week. When asset managers and the country’s public pension providers began shedding BAs amid the COVID-19 pandemic in early 2020, CDOR spiked, and the effects threatened to ripple throughout the Canadian …