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Full-Text Articles in Economic History
Lessons Learned: Matthew Kabaker, Yasemin Esmen
Lessons Learned: Matthew Kabaker, Yasemin Esmen
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.
The Us Supervisory Capital Assessment Program (Scap) And Capital Assistance Program (Cap), Aidan Lawson
The Us Supervisory Capital Assessment Program (Scap) And Capital Assistance Program (Cap), Aidan Lawson
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 of the …
Sweden 1991 Bank Support Authority (Bankstödsnämnden), Natalie Leonard
Sweden 1991 Bank Support Authority (Bankstödsnämnden), Natalie Leonard
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 manage …
Norwegian State Finance Fund (Gfc), Natalie Leonard
Norwegian State Finance Fund (Gfc), Natalie Leonard
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 2009, six banks …
Israeli Bank Shares Arrangement (Hesder Hamenayot Habankayot), Natalie Leonard
Israeli Bank Shares Arrangement (Hesder Hamenayot Habankayot), Natalie Leonard
Journal of Financial Crises
From 1980 to 1983, Israeli consumer prices more than doubled every year and the shekel lost more than 50% of its value annually. This high inflation and currency devaluation posed an extraordinary challenge for Israel’s biggest banks. They needed to grow their capital bases to keep up with the rising market value of their assets, but investors needed protection against the continually declining value of the local currency. Banks’ solution was to regularly issue new, nonvoting shares in extraordinary amounts while ensuring investors a high return by regularly buying their own shares to manipulate prices. The government tacitly supported the …
Hong Kong Contingent Bank Capital Facility (Cbcf), David Tam, Steven Kelly
Hong Kong Contingent Bank Capital Facility (Cbcf), David Tam, Steven Kelly
Journal of Financial Crises
On October 14, 2008, Hong Kong’s financial secretary announced the Hong Kong Monetary Authority (HKMA) would use Hong Kong’s Exchange Fund to provide standby capital to banks if needed. The Contingent Bank Capital Facility (CBCF) was available until the end of 2010 to shore up depositor and investor confidence in the local banking sector and commenced in parallel with a broader set of announced measures including a consumer bank deposit guarantee. Twenty-three locally incorporated “Authorized Institutions” were eligible to access CBCF capital upon request. The provisioning of CBCF capital would be accompanied by enhanced oversight from the HKMA. The Hong …