China: Reserve Requirements, Gfc,
2022
Yale School of Management
China: Reserve Requirements, Gfc, Carey K. Mott
Journal of Financial Crises
In 2008, China experienced several natural disasters that slowed economic growth, and fearing contagion from the Global Financial Crisis (GFC), the central bank cut the reserve requirement ratio (RRR) three times for large financial institutions, to 15.5%, and four times for small and medium-size financial institutions, to 13.5%. This monetary easing, combined with a USD 586 billion fiscal stimulus package, caused explosive credit growth in China. One year after these RRR cuts, the central bank hiked the ratio 12 times, to a historically high 21.5% for large banks in June 2011; however, it maintained a different ratio for rural credit …
Argentina: Reserve Requirements, 1994–1995,
2022
Yale School of Management
Argentina: Reserve Requirements, 1994–1995, Natalie Leonard
Journal of Financial Crises
The devaluation of the Mexican peso in December 1994 sparked concerns about the quality and safety of government debt across Latin American countries, including Argentina. In late 1994 and 1995, Banco Central de la Republica Argentina (BCRA) implemented three changes in reserve requirement policy to restore liquidity throughout the financial system and defend the currency peg to the US dollar. First, it lowered the existing minimum reserve requirement, which required banks to hold reserves entirely in cash (pesos or US dollars). This released more than ARS 4 billion (USD 4 billion) in resources into the banking system, according to the …
Brazil: Reserve Requirements, Gfc,
2022
Yale School of Management
Brazil: Reserve Requirements, Gfc, Sean Fulmer
Journal of Financial Crises
After the collapse of Lehman Brothers in September 2008, deposits began to accumulate at large Brazilian banks, representing a flight to safety away from small and medium-sized banks. While total deposits in the Brazilian financial system grew by 13% from August 2008 to January 2009, the total deposits held by small and medium-sized banks declined by 23% and 11%, respectively. Because of high statutory reserve requirements and legal disincentives to lend directly to financial institutions, the Central Bank of Brazil (BCB) used reserve requirements as its primary tool for providing liquidity to incentivize large banks to provide credit to smaller …
Thailand: Fidf Blanket Guarantee, 1997,
2022
Yale School of Management
Thailand: Fidf Blanket Guarantee, 1997, Ayodeji George
Journal of Financial Crises
The Thai government’s decision to allow the baht to float in July 1997 was the pivotal event of the Asian Financial Crisis. The baht fell 20% by the end of the month, further pressuring Thai financial institutions that had borrowed heavily in US dollars and other foreign currencies. In early August, Thailand’s Finance Minister and the Bank of Thailand (BOT) announced the suspension and restructuring of insolvent finance companies and a blanket guarantee covering depositors and creditors of all domestic banks and the remaining finance companies, administered by the BOT’s Financial Institutions Development Fund (FIDF). However, the blanket guarantee was …
Mexico: Fobaproa Blanket Guarantee, 1993–1994,
2022
Yale School of Management
Mexico: Fobaproa Blanket Guarantee, 1993–1994, Stella Schaefer-Brown
Journal of Financial Crises
On December 22, 1994, the Mexican government allowed the peso to float freely against the US dollar, aggravating the run on peso deposits, leading to the rapid devaluation of the peso, and sparking the peso crisis. The following week, the Bank of Mexico announced that the Mexican deposit insurer would fully guarantee all commercial bank deposits and liabilities except subordinated debt. The announcement of the blanket guarantee appeared effective at reassuring foreign investors, as the central bank was soon able to ease the liquidity support that it had been providing to banks during the crisis. The government created a deposit …
Sweden: Bank Support Authority, Blanket Guarantee, 1992,
2022
Yale School of Management
Sweden: Bank Support Authority, Blanket Guarantee, 1992, Anmol Makhija
Journal of Financial Crises
Following a period of rapid financial liberalization and a record credit boom in the 1980s, Sweden’s financial system suffered its worst shock in the post–World War II period. Swedish banks were heavily dependent on foreign credit, which dried up amid signs of instability. The Swedish government announced a blanket guarantee on September 24, 1992, for all banks’ obligations except share capital and perpetual subordinated loans. According to a 1995 IMF Working Paper by Drees and Pazarbasioglu, the purpose of the blanket guarantee was “to guarantee the stability of the payments system and to safeguard the general supply of credit.” The …
Korea: Blanket Guarantee, 1997,
2022
Yale School of Management
Korea: Blanket Guarantee, 1997, Bailey Decker
Journal of Financial Crises
Korea entered the Asian Financial Crisis in August 1997 with highly leveraged firms and a banking system inexperienced in managing systemic risk. Korea faced a currency crisis and a banking crisis, as foreign banks froze credit to Korean commercial banks and merchant banks. On August 25, 1997, the Ministry of Economy and Finance (MOEF) announced that it would guarantee all Korean financial institutions’ foreign debt—both existing debt and new borrowings. Nonetheless, foreign lenders continued to withdraw credit from Korean financial institutions. On November 19, 1997, a newly appointed MOEF minister announced a suite of measures to promote foreign creditors’ confidence …
Jamaica: Finsac Blanket Guarantee, 1997,
2022
Yale School of Management
Jamaica: Finsac Blanket Guarantee, 1997, Ayodeji George
Journal of Financial Crises
After a period of sustained distress in the early 1990s, Jamaican financial institutions faced significant liquidity issues by 1996, evidenced by runs on banks by depositors. The government responded by creating the Financial Sector Adjustment Company (FINSAC) on January 29, 1997, to rehabilitate weak financial institutions and administer a blanket guarantee on financial sector liabilities. The blanket guarantee covered all deposit-taking financial institutions, life insurance policy providers, and pension funds registered under the Banking Act, Financial Institutions Act, and Insurance Act. Within eligible institutions, the blanket guarantee covered depositors’ funds in licensed deposit-taking institutions, pension funds managed by authorized institutions, …
Ireland: Credit Institution (Financial Support) Scheme, 2008,
2022
Yale School of Management
Ireland: Credit Institution (Financial Support) Scheme, 2008, Stella Schaefer-Brown
Journal of Financial Crises
The Global Financial Crisis exposed fragilities in the Irish banking system and led to widespread runs on Irish banks. Irish authorities attempted to address the runs on September 22, 2008, by increasing the country’s deposit guarantee limit from EUR 20,000 to EUR 100,000 (USD 28,800 to USD 140,000) and raising the coverage of deposits from 90% to 100%. When the runs continued, the Irish minister for finance announced a blanket guarantee of bank liabilities on September 30 without consulting European Union authorities. The announcement specified the blanket guarantee would be effective immediately and remain in effect for two years. The …
Indonesia: Blanket Guarantee, 1998,
2022
Yale School of Management
Indonesia: Blanket Guarantee, 1998, Ayodeji George
Journal of Financial Crises
The Indonesian government closed 16 banks on November 1, 1997. At the time, the government said it would guarantee depositors up to 20 million Indonesian rupiah (IDR; USD 6,000) per account. The lack of immediate full protection for large depositors caused deposit runs throughout the banking sector and undermined foreign confidence in the Indonesian financial system. In response, the Indonesian president on January 26, 1998, announced a blanket guarantee and created the Indonesian Bank Restructuring Agency (IBRA) to administer the guarantee and other bank rehabilitation efforts. The blanket guarantee covered all depositors and nonsubordinated creditors in locally incorporated commercial banks. …
Finland: Government Guarantee Fund, Blanket Guarantee, 1992,
2022
Yale School of Management
Finland: Government Guarantee Fund, Blanket Guarantee, 1992, Anmol Makhija
Journal of Financial Crises
Following a period of rapid financial liberalization and a record credit boom in the 1980s, Finland’s financial system suffered steadily increasing loan losses and falling earnings beginning in 1990. The Finnish Parliament created the Government Guarantee Fund (GGF) in April 1992 to support banks with loans, capital, and guarantees. In a press release issued on August 6, 1992, the government said the GGF would “secure the stable functioning of the banking system under any circumstances [emphasis added]”. Six months later, the Parliament of Finland specifically required the GGF to guarantee that all Finnish banks could meet their commitments. The government …
Ecuador: Blanket Guarantee, 1998,
2022
Yale School of Management
Ecuador: Blanket Guarantee, 1998, Bailey Decker
Journal of Financial Crises
After a series of exogenous shocks hit the Ecuadorian economy in 1997–1998, foreign creditors reassessed their emerging-market risk and reduced external credit lines to Ecuador, thus draining liquidity. The closure of a small bank called Solbanco in April 1998 triggered deposit runs at other banks. Banks sought assistance from the Central Bank of Ecuador (Banco Central del Ecuador, or BCE). By the end of September 1998, the BCE had issued emergency loans to 11 financial institutions, totaling nearly 30% of the money base. The crisis accelerated in August 1998 when Banco de Prestamos, the sixth-largest bank, was closed; the existing …
Denmark: General Guarantee Scheme, 2008,
2022
Yale School of Management
Denmark: General Guarantee Scheme, 2008, Benjamin Hoffner
Journal of Financial Crises
As foreign credit in Denmark dried up during the summer of 2008, Danish banks became increasingly reliant on short-term borrowing. The government took over the failing Roskilde Bank, the country’s eighth-largest bank, in late August. On October 5, 2008, the government announced a voluntary General Guarantee Scheme to fully insure deposits and other senior liabilities of participating banks. Banks could participate in the scheme by becoming members of the financial sector’s banking consortium, Det Private Beredskab, or in English, the Private Contingency Association (PCA), before October 13, 2008. The General Guarantee Scheme fully insured all depositors and senior unsecured creditors …
Reserve Requirements Survey,
2022
Yale School of Management
Reserve Requirements Survey, June Rhee, Carey K. Mott, Greg Feldberg, Andrew Metrick
Journal of Financial Crises
Banks have a private motive to hold some level of cash and liquid reserves, but the negative externalities of bank runs create a public interest in setting a regulatory level higher than the privately optimal level. We can think of such reserve requirements (RRs) as the original form of liquidity regulation. In this paper, we focus on 14 cases in which central banks adjusted RRs after crises hit, typically to deal with liquidity shortages in the banking system. We observe that RR adjustments have several advantages in a crisis: (1) such changes require little process, and the change for banks …
Blanket Guarantees Survey,
2022
Yale School of Management
Blanket Guarantees Survey, Christian M. Mcnamara, Carey K. Mott, Greg Feldberg, Andrew Metrick
Journal of Financial Crises
This paper surveys 10 blanket guarantee (BG) programs across 13 Key Design Decisions. The defining characteristics of these programs in terms of their inclusion in our BG series are (a) that they guaranteed a broader range of liabilities beyond deposit accounts and (b) that the guarantees covered existing liabilities in addition to newly issued ones. Each case represents an effort to eliminate creditors’ incentive to withdraw funding from institutions by guaranteeing that the funding will be paid back even if the institutions are unable to do so themselves. The main themes that emerge are: (a) the inability of blanket guarantees …
The Financialization Of Recession Response,
2022
Economic Studies, the Brookings Institution
The Financialization Of Recession Response, Aaron Klein
Journal of Financial Crises
This paper analyzes economic policy responses to the COVID-19-induced recession, focusing on the American policy response. Despite widespread political distrust between the two parties sharing control of the government and the timing of the upcoming presidential election, America’s political system was able to enact a massive policy response that reduced the severity of the recession. This political response happened faster than any automatic policy response would have, based on the delays in data reporting. The economic policies enacted continued America’s trend toward financialization of fiscal policy. The Federal Reserve and America’s private banking and financial systems were heavily relied upon …
Manufactured Homes In Nevada Counties,
2022
University of Nevada, Las Vegas
Manufactured Homes In Nevada Counties, Joshua Padilla, Annie Vong, Caitlin J. Saladino, William E. Brown Jr.
Housing & Real Estate
This fact sheet presents data on the share of manufactured homes in each of Nevada’s 17 counties, as reported in the June 2022 The Daily Yonder article, “With Housing Shortage Still Ongoing, Manufactured Homes are Gaining Ground,” by Kristi Eaton. The original report includes data made available by the Housing Assistance Council (HAC) for each county in the United States from 2009 and 2018.
Unwilling Gamblers And Loaded Dice: Considering Recession And Crisis As A Natural Effect Of Financial Capitalism,
2022
Cleveland State University
Unwilling Gamblers And Loaded Dice: Considering Recession And Crisis As A Natural Effect Of Financial Capitalism, Darlene N. Moorman
The Downtown Review
Under financial capitalism, ordinary people are increasingly becoming 'unwilling gamblers' of a risky and unstable system. This paper explores the social and institutional change behind the neoliberal movement and considers how the politics and policies of neoliberalism have contributed to a certain environment of financial instability. Looking at the changing nature of the economy, the rapid expansion of the financial sector, and the persisting issue of moral hazard underlying risky and speculative behaviors among other items, reveals a financial system in which recessions and crises can be considered a natural, although not inevitable, effect.
Recommendations For Sustainable Tourism In Patagonia: An Exploratory Analysis Of Sustainable Tourism In Costa Rica, The Nordic Region, And Thailand’S Communities,
2022
The University of San Francisco
Recommendations For Sustainable Tourism In Patagonia: An Exploratory Analysis Of Sustainable Tourism In Costa Rica, The Nordic Region, And Thailand’S Communities, Julia K. Lowery
Undergraduate Honors Theses
This thesis explores different levels of governance and its role towards actualizing sustainable tourism in Patagonia. With the growing threat of climate change, international destinations such as Patagonia are looking to continue building their tourism industries in a sustainable way. Through analyzing case studies of national governance in Costa Rica, multi-national governance in the Nordic region, and community-based tourism in Thailand, we can better understand how each form of governance has the potential to create a sustainable tourism industry. With this understanding of successful governance in my case studies, as well as understanding the historical and political forces that have …
Payday Loans In The Mountain West, 2022,
2022
University of Nevada, Las Vegas
Payday Loans In The Mountain West, 2022, Issac Hernandez-Alcaraz, Vanessa M. Booth, Katie M. Gilbertson, Caitlin J. Saladino, William E. Brown Jr.
Economic Development & Workforce
This fact sheet examines data on payday loans, produced by the Pew Charitable Trusts. We examine payday lending costs, most common loan type, and the average annual percentage rate in the Mountain West (Arizona, Colorado, Nevada, New Mexico, and Utah), and include specific analysis on differences between the states by regulatory category.
