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How Does Industrialization Affect (Equitable) Income Growth? Evidence From U.S. Manufacturing During The Early 20th Century, Leonardo Cavedagne 2021 Union College - Schenectady, NY

How Does Industrialization Affect (Equitable) Income Growth? Evidence From U.S. Manufacturing During The Early 20th Century, Leonardo Cavedagne

Undergraduate Economic Review

This paper assesses how changes in labor productivity from the rise of industrialization impacted total, personal, and corporate income per capita at the state level from 1899-1940. Using hand-collected data from the Statistics of Income Report and the Statistical Abstract of the United States, we conduct OLS regressions and find a significant and positive relationship between labor productivity and our dependent variables. Personal income recorded the highest coefficient, demonstrating workers benefiting the most from increasing labor productivity. This finding allows for exploration into equitable income growth, as the growth in income benefits the workers more than large capital owners.


Lessons Learned: Matthew Kabaker, Yasemin Esmen 2021 Yale University

Lessons Learned: Matthew Kabaker, Yasemin Esmen

The Journal of Financial Crises

During the Global Financial Crisis of 2007-09, Matthew Kabaker was senior adviser to Treasury Secretary Timothy F. Geithner and Treasury deputy assistant secretary, capital markets. He helped design the Treasury’s policy response to the financial crisis; design and implement the Dodd-Frank financial reforms; and address housing finance reform, including reforms at Fannie Mae and Freddie Mac. Mr. Kabaker also served on the Treasury’s Financial Stability Policy Council and Housing Policy Council. This Lessons Learned summary is based on an interview with Mr. Kabaker.


Lessons Learned: William “Bill” Dudley, Sandra Ward 2021 Yale University

Lessons Learned: William “Bill” Dudley, Sandra Ward

The Journal of Financial Crises

William “Bill” Dudley was the executive vice president of the Federal Reserve Bank of New York’s Markets Group from 2007–09 and vice chairman of the Federal Open Market Committee from 2009 to 2018. In January 2010, Dudley was named the 10th president of the New York Fed, succeeding Timothy Geithner. This Lessons Learned summary is based on an interview with Mr. Dudley.


The Us Supervisory Capital Assessment Program (Scap) And Capital Assistance Program (Cap), Aidan Lawson 2021 Yale Program on Financial Stability

The Us Supervisory Capital Assessment Program (Scap) And Capital Assistance Program (Cap), Aidan Lawson

The Journal of Financial Crises

Due to continued stress during the Global Financial Crisis, the US Treasury released a series of additional measures in February 2009 that included a mandatory stress test for major U.S. bank holding companies (BHCs), backed by government capital. The stress test, known as the Supervisory Capital Assessment Program (SCAP), tested the capital adequacy of the 19 U.S. BHCs that had more than $100 billion in assets. A large interagency team of regulators and other experts estimated losses and income under two hypothetical scenarios for the group of BHCs: a baseline that reflected the consensus belief about the course ...


Us Capital Purchase Program, Aidan Lawson, Adam Kulam 2021 Yale Program on Financial Stability

Us Capital Purchase Program, Aidan Lawson, Adam Kulam

The Journal of Financial Crises

During the fall of 2008, the US government was faced with a financial crisis of unprecedented scope. Having already exercised the authority to put Fannie Mae and Freddie Mac into conservatorship in September, the stage was set for the US government to intervene more broadly in strained financial markets. This intervention would ultimately come in the form of the Emergency Economic Stabilization Act of 2008 (EESA), which was passed on October 3, 2008. The main provision of EESA was the Troubled Asset Relief Program, or TARP, a $700 billion program initially designed to purchase troubled assets off the balance sheets ...


Us Community Development Capital Initiative (Cdci), Adam Kulam 2021 Yale Program on Financial Stability

Us Community Development Capital Initiative (Cdci), Adam Kulam

The Journal of Financial Crises

The United States Department of the Treasury responded to the Global Financial Crisis with an economy-wide stimulus package called the Troubled Assets Relief Program (TARP). Within the portion of TARP’s budget dedicated to bank investments, about $570.1 million was disbursed to community development financial institutions (CDFIs)—specifically, banks and credit unions (depositories)—in a program called the Community Development Capital Initiative (CDCI). Through the CDCI, Treasury provided capital to CDFI depositories, encouraged them to lend to small businesses, and promoted other community-oriented goals. The CDFI depositories issued either preferred shares or unsecured subordinated debentures to Treasury at low ...


Us Reconstruction Finance Corporation: Preferred Stock Purchase Program, Aidan Lawson 2021 Yale Program on Financial Stability

Us Reconstruction Finance Corporation: Preferred Stock Purchase Program, Aidan Lawson

The Journal of Financial Crises

By March 1933, the early collateralized lending programs of the Reconstruction Finance Corporation (RFC) had failed to prevent the recurrence of bank runs and panic in US financial markets. These conditions forced newly elected President Franklin Delano Roosevelt to call for a nationwide bank holiday from March 6 to March 9. On the final day of the holiday, a special session of Congress passed the Emergency Banking Act (EBA), which gave the RFC the power to make investments via preferred equity of distressed institutions. Under the EBA, the RFC could subscribe to and make loans on cumulative non-assessable preferred stock ...


Uk Bank Recapitalisation Scheme, Alec Buchholtz 2021 Yale Program on Financial Stability

Uk Bank Recapitalisation Scheme, Alec Buchholtz

The Journal of Financial Crises

Following the collapse of Lehman Brothers and the ensuing global credit crunch in late 2008, Her Majesty’s Treasury (HMT) announced a large economic package to provide support to the UK banking sector. As part of the package, the eight largest banks committed themselves to raising their total Tier 1 capital by £25 billion through either private fundraising or government assistance. Thus, the economic package featured a new Bank Recapitalisation Scheme to invest up to £50 billion in capital into UK banking and credit institutions that could not raise their assets in the private sector. Government capital was invested into ...


Turkey Saving Deposit Insurance Fund Bank Recapitalization (2000–2001), Natalie Leonard 2021 Yale Program on Financial Stability

Turkey Saving Deposit Insurance Fund Bank Recapitalization (2000–2001), Natalie Leonard

The Journal of Financial Crises

Throughout the 1990s, Turkey’s macroeconomy featured high and fluctuating inflation and oscillating GDP growth rates. After Turkey’s April 1999 elections, Turkey adopted a new economic program in coordination with the International Monetary Fund (IMF) with three goals: fiscal adjustment, structural reform, and an exchange rate commitment. By the end of the third quarter of 2000, concerns over the pace of structural reform mounted and short-term interest rates remained high. The new Banking Regulation and Supervision Agency (BRSA) revealed significant corruption within several small banks taken over by the Saving Deposit Insurance Fund (SDIF). In November 2000, Demirbank, a ...


Thailand Capital Support Facilities 1998, Adam Kulam 2021 Yale Program on Financial Stability

Thailand Capital Support Facilities 1998, Adam Kulam

The Journal of Financial Crises

After the floatation of the baht on July 2, 1997, the Thai economy endured a financial crisis from massive currency devaluation, exchange rate losses, and non-performing loans (NPLs). In response, the Thai government employed two types of restructuring programs: (1) the alleviation of NPLs and distressed assets, (2) the correction of financial institution insolvency and capital inadequacy. To help recapitalize private institutions with public funds, the government introduced tier-1 and tier-2 capital support facilities. The tier-1 facility aimed to attract private capital, and the tier-2 facility aimed to stimulate lending and corporate debt restructuring. Capital injections took the form of ...


Sweden 1991 Bank Support Authority (Bankstödsnämnden), Natalie Leonard 2021 Yale University

Sweden 1991 Bank Support Authority (Bankstödsnämnden), Natalie Leonard

The Journal of Financial Crises

Sweden’s economic downturn and growing unemployment in the early 1990s led to increased uncertainty about banks’ risks. Turbulence in foreign exchange markets and speculation against the Swedish krona caused significant problems in the housing paper market. The ensuing banking crisis affected six of the seven largest Swedish banks. Loan losses peaked in 1992 at nearly SEK 80 billion while the banking sector recorded an operating loss of almost SEK 50 billion. In the fall of 1992, the government guaranteed all banks’ liabilities, took over two of the largest banks, and announced it would create the Bank Support Authority to ...


Spain – Fondo De Reestructuración Ordenada Bancaria (Frob) Capital Injections, Priya Sankar 2021 Yale Program on Financial Stability

Spain – Fondo De Reestructuración Ordenada Bancaria (Frob) Capital Injections, Priya Sankar

The Journal of Financial Crises

The Spanish government created the Fondo de Reestructuración Ordenada Bancaria (FROB), known in English as the Fund for Orderly Bank Restructuring (FROB) in 2009 to perform temporary capital injections that facilitated the restructuring and mergers and acquisitions of struggling institutions. The FROB used preferred shares, ordinary shares, and contingent convertible bonds to recapitalize struggling Spanish credit institutions. The FROB injected a total of €54.4 billion of capital in three rounds. FROB I in 2010 injected capital to support the mergers of 25 insolvent regional savings banks, or cajas, into seven larger, more solvent banks through the subscription of convertible ...


Russian Bank Capital Support Program, Sean Fulmer 2021 Yale Program on Financial Stability

Russian Bank Capital Support Program, Sean Fulmer

The Journal of Financial Crises

At the start of 2014, the Russian Federation had experienced several years of decelerating growth rates as a result of weak investment, poor governance, and failed structural reforms. During 2014, the dual shocks of rapidly declining oil prices and increasingly stringent international sanctions led to significant financial instability, as Russian firms lost access to international markets and net capital outflows accelerated. As part of the response to this crisis, the Russian government unveiled a RUB 1 trillion (US $17.2 billion) bank capital support program, which it later revised down to RUB 838 billion. The program, operated by the Deposit ...


Polish Fundusz Pomocy Instytucjom Kredytowym, Junko Oguri 2021 Yale Program on Financial Stability

Polish Fundusz Pomocy Instytucjom Kredytowym, Junko Oguri

The Journal of Financial Crises

Between September and December 1925, the Second Polish Republic faced a so-called twin-crisis: the złoty, the Polish currency, collapsed, and the financial system faced bank runs and flights of deposits. On November 28, 1925, the Polish Government established Polish Fundusz Pomocy Instytucjom Kredytowym (FPIK), injecting over PLN 60 million capital through Bank Gospodarstwa Krajowego (BGK), a national development bank. The government-led capital injection scheme kept supporting the unstable Polish financial system during the inter-war period. Furthermore, in the 1930s, the FPIK served not only the large banks but also smaller financial institutions, and sometimes, non-financial companies. While the FPIK successfully ...


Norwegian State Finance Fund (Gfc), Natalie Leonard 2021 Yale Program on Financial Stability

Norwegian State Finance Fund (Gfc), Natalie Leonard

The Journal of Financial Crises

Following the Lehman Brothers bankruptcy in September 2008, Norway’s banking system experienced a significant liquidity squeeze. Norwegian banks had relied extensively on short-term funding from foreign funding markets and as the financial crisis evolved, foreign funding dried up. To alleviate pressure, Norwegian authorities responded with a number of emergency programs. In early 2009, the government created the State Finance Fund (SFF) to recapitalize banks. The SFF was capitalized with a NOK 50 billion ($7.07 billion) equity investment from the Finance Ministry. In total, 34 banks applied for capital injections totaling NOK 6.7 billion. By the end of ...


Norway – Gbif/Sbif (Nordic Crisis 1991), Priya Sankar 2021 Yale Program on Financial Stability

Norway – Gbif/Sbif (Nordic Crisis 1991), Priya Sankar

The Journal of Financial Crises

Privately owned banks had funded the Savings Bank Guarantee Fund (SBGF) and Commercial Bank Guarantee Fund (CBGF) between 1921-1938 to provide guarantees and capital injections to struggling banks. Bank legislation in 1961 made participation in such guarantee funds compulsory for all Norwegian banks, and they were reorganized according to that law. However, after banks began to struggle in the late 1980s, the two funds quickly ran out of resources. The Norwegian Parliament (Storting) created the Government Bank Insurance Fund (GBIF) in March 1991 to loan money to the two funds. They both quickly incurred unsustainable amounts of debt to the ...


Asset Management Corporation Of Nigeria (Amcon) Capital Injection, Pascal Ungersboeck, Corey N. Runkel 2021 Yale Program on Financial Stability

Asset Management Corporation Of Nigeria (Amcon) Capital Injection, Pascal Ungersboeck, Corey N. Runkel

The 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 into insolvent banks. AMCON injected a total of ₦2.3 trillion (US$15.3 billion) in capital into eight different financial institutions. Five capital injections were designed to bring failing banks to zero net asset value and ...


Mexico Peso Crisis (1994–1995): Procapte, Manuel León Hoyos 2021 Yale Program on Financial Stability

Mexico Peso Crisis (1994–1995): Procapte, Manuel León Hoyos

The Journal of Financial Crises

In December 1994, Mexico entered a financial crisis. The government abandoned its crawling peg exchange rate policy, letting the peso float and devalue substantially. The recently privatized banking sector found difficulties in meeting regulatory minimum capital. The Mexican government assisted with a $52 billion international financial package, enacted multiple programs to contain the crisis. The first program introduced to recapitalize the banks was the Temporary Capitalization Program (PROCAPTE) in February 1995. Banks could issue subordinated debentures to the Bank Fund for Savings Protection (FOBAPROA). These debentures were convertible into equity shares (common stock) with voting rights after five years. Banks ...


Malaysia: Danamodal Nasional Berhad (Danamodal), Devyn Jeffereis 2021 Yale Program on Financial Stability

Malaysia: Danamodal Nasional Berhad (Danamodal), Devyn Jeffereis

The Journal of Financial Crises

The Malaysian economy was relatively well positioned at the beginning of the Asian Financial Crisis. However, the government’s response of tight fiscal and monetary policy, along with contagion from surrounding countries, had severe negative consequences. The banking industry became particularly vulnerable due to substantial loan growth preceding the crisis and exposure to volatile sectors, leading to an increase in NPLs and capital deterioration. As part of its approach to assist the ailing banking sector, the Bank Negara Malaysia created Danamodal Nasional Berhad (Danamodal) on August 10, 1998, as a wholly owned subsidiary aimed at recapitalizing banking institutions. Funding for ...


Korea: Bank Recapitalization Fund, Lily S. Engbith 2021 Yale Program on Financial Stability

Korea: Bank Recapitalization Fund, Lily S. Engbith

The Journal of Financial Crises

Following the collapse of Lehman Brothers on September 15, 2008, a number of foreign governments enacted stabilization measures to protect their domestic economies in the wake of the global credit crunch. The Bank Recapitalization Fund (the Fund), announced by the South Korean government on December 18, 2008, and implemented on February 15, 2009, was one such intervention intended to assist Korean commercial banks in strengthening their capital bases and thus restore normal lending practices between banks and nonfinancial institutions. Invoking its authority under Article 65, Section 3 (“Emergency Credit to Financial Institutions”), of Chapter IV of the Bank of Korea ...


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