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Full-Text Articles in Policy Design, Analysis, and Evaluation
Lessons Learned: Andreas Verykios And Kostas Tsatsaronis, Mercedes Cardona
Lessons Learned: Andreas Verykios And Kostas Tsatsaronis, Mercedes Cardona
Journal of Financial Crises
Andreas Verykios was appointed in 2018 to lead the board of directors of the General Council of the Hellenic Financial Stability Fund (HFSF), an independent special purpose vehicle created to stabilize the Greek banking sector in the wake of the country’s debt crisis. The Greek economy was badly affected by the Global Financial Crisis (GFC) and the Sovereign Debt Crisis, when the government was found to have underreported its fiscal deficits and public debt. This led to a downgrade and eventual default of its sovereign bonds, requiring assistance from the European Commission. From 2010 through 2018, the commission implemented three …
Lessons Learned: Fabrizio López-Gallo, Mercedes Cardona
Lessons Learned: Fabrizio López-Gallo, Mercedes Cardona
Journal of Financial Crises
Fabrizio López-Gallo served as the Bank of Mexico’s director general of financial stability during the COVID-19 pandemic, having been financial sector specialist and risk analysis and special projects manager for the central bank during the 2007–09 Global Financial Crisis (GFC). The Mexican government declared a health emergency at the outbreak of the pandemic and implemented a general economic shutdown. The Bank of Mexico intervened by cutting rates and initiating extraordinary measures, such as adding bond swaps and loosening rules for minimum deposits at commercial banks to provide liquidity. It gave flexibility to commercial banks to grant forbearance on mortgage payments …
Lessons Learned: Cecilia Skingsley, Maryann Haggerty
Lessons Learned: Cecilia Skingsley, Maryann Haggerty
Journal of Financial Crises
During the Swedish banking crisis of the early 1990s, Cecilia Skingsley was the press secretary for the Ministry of Finance. She held various roles, including chief economist, at Swedbank, one of Sweden’s largest banks, from 2007 to 2013, a period that included the Global Financial Crisis (GFC) and European Sovereign Debt Crisis. Swedbank suffered heavy losses amid the GFC and relied on a government guarantee program for support. In 2013, she became a deputy governor of Sveriges Riksbank, Sweden’s central bank; in 2019, she became first deputy governor. Skingsley left the Riksbank in September 2022 to become head of the …
Lessons Learned: Philip Lane, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Lessons Learned: Philip Lane, Mary Anne Chute Lynch, Rosalind Z. Wiggins
Journal of Financial Crises
Philip Lane served as governor of the Central Bank of Ireland from 2015 to 2019. He introduced countercyclical capital and systemic buffer tools and initiated research into the role and risks of cross-border inflows across Ireland. As a member of the Governing Council of the European Central Bank (ECB) since 2015, Lane has advocated for the European Union to adopt macroprudential policies and tools. He hailed the work of the European Systemic Risk Board and similar institutions established after the Global Financial Crisis (GFC) and the European Sovereign Debt Crisis to share data, information concerning risks, and concerns over financial …
Lessons Learned: J. Christopher Flowers, Mary Anne Chute Lynch
Lessons Learned: J. Christopher Flowers, Mary Anne Chute Lynch
Journal of Financial Crises
J. Christopher Flowers has been managing director, CEO, and chairman of the private investment firm J.C. Flowers & Co. LLC for many years. During the Global Financial Crisis (GFC) of 2007–2009, Flowers was involved with investing in some of the largest banks and financial institutions in the world and advising and consulting with them on possible acquisitions, mergers, and sales as several of these firms began to collapse. In the fall of 2008, Flowers worked closely with the Bank of America (BofA) on proposals to acquire Lehman Brothers and Merrill Lynch, and he developed a plan for private investors to …
Lessons Learned: Giorgio Gobbi, Mercedes Cardona
Lessons Learned: Giorgio Gobbi, Mercedes Cardona
Journal of Financial Crises
Giorgio Gobbi joined the Economic Research Department of the Bank of Italy in 1990 and was assigned to carry out analysis and research on the banking industry. From 1998 to 2004, he headed the department’s Financial Intermediaries Office and represented the bank at the International Monetary Fund, the Bank of International Settlements, and the European Central Bank. Starting in 2007, Gobbi headed the Financial Structure and Intermediaries Division within the bank’s Structural Economic Analysis Department. He was appointed deputy head of the Financial Stability Unit in 2013 and became head of the Financial Stability Directorate in 2014.
Lessons Learned: Jesper Berg, Maryann Haggerty
Lessons Learned: Jesper Berg, Maryann Haggerty
Journal of Financial Crises
The career of Jesper Berg, a Danish economist, has spanned multiple financial crises. He held positions with the Danish central bank, Danmarks Nationalbank, from 2004 to 2010, first as head of market operations and later as head of financial stability. He had served as head of the capital markets and financial structure division at the European Central Bank from 2000 to 2004, and earlier he was an economist at the International Monetary Fund’s Exchange and Trade Relations Department. This Lessons Learned summary is based on an interview with Berg in December 2022, when he was director general of the Danish …
Lessons Learned: Subba Rao Duvvuri, Salil Gupta
Lessons Learned: Subba Rao Duvvuri, Salil Gupta
Journal of Financial Crises
Subba Rao Duvvuri served as governor of the Reserve Bank of India (RBI) for five years (2008–13). Before that, he was finance secretary to the government of India (2007–08), and secretary to the prime minister’s Economic Advisory Council (2005–07). With a career spanning 35 years in the Indian Administrative Services, Duvvuri has held various positions at the state level in the government of Andhra Pradesh, and at the central government of India. Duvvuri was previously lead economist at the World Bank (1999–2004) and, after 2013, served as a visiting fellow at the National University of Singapore and the University of …
Lessons Learned: Calvin Mitchell Iii, Mercedes Cardona
Lessons Learned: Calvin Mitchell Iii, Mercedes Cardona
Journal of Financial Crises
Calvin Mitchell III served as executive vice president of the communications group within the executive office of the Federal Reserve Bank of New York (FRBNY) during the Global Financial Crisis. In 2008, Mitchell was tapped by Timothy Geithner, who was then FRBNY president, to head a new group charged with expanding the communications and community affairs functions. Mitchell left the FRBNY in 2009 for the private sector and returned to government in 2021 as assistant secretary for public affairs in the US Treasury Department.
Lessons Learned: Jason Cave, Vincient Arnold, Greg Feldberg
Lessons Learned: Jason Cave, Vincient Arnold, Greg Feldberg
Journal of Financial Crises
Jason Cave was the senior adviser to the chairman of the Federal Deposit Insurance Corporation (FDIC) from 2008 to 2011 and the deputy director of the Division of Complex Financial Institutions at the FDIC from 2011 to 2013. This Lessons Learned summary is based on an interview with Cave held on April 8, 2024. During the interview, Cave discussed the so-called ring-fencing arrangements planned, considered, or executed between various agencies of the US government—the Federal Reserve, Department of the Treasury, and FDIC—and three banks: Wachovia, Citigroup, and Bank of America. These arrangements, sometimes referred to as wraps or risk shields, …
Germany: Hsh Nordbank Capital Injection, 2009, Anmol Makhija
Germany: Hsh Nordbank Capital Injection, 2009, Anmol Makhija
Journal of Financial Crises
State-controlled HSH Nordbank AG (HSH) lost EUR 2.8 billion in 2008, mainly because of impairments to its holdings of US structured credit securities. On April 29, 2009, the German bank regulator informed HSH that it would close HSH if the owners did not recapitalize the bank to the 8% total capital ratio requirement. In June 2009, the state governments of Hamburg and Schleswig-Holstein injected EUR 3 billion (USD 3.8 billion) of capital in ordinary shares with voting rights and provided a EUR 10 billion asset guarantee, called a “risk shield,” for a 7.85% annual fee. Over the next few years, …
Belgium And France: Dexia Group Capital Injection, 2008, Ayodeji George
Belgium And France: Dexia Group Capital Injection, 2008, Ayodeji George
Journal of Financial Crises
Dexia Group (Dexia, or the Group) was a banking and insurance conglomerate that specialized in public financing with major operations in Belgium, France, and Luxembourg. Following the collapse of Lehman Brothers in mid-September 2008, Dexia faced a liquidity crunch as wholesale funding markets froze. Faced with insolvency concerns, authorities from the bank’s three primary markets, Belgium, France, and Luxembourg, conducted overnight negotiations to agree on capital injection terms. On September 30, 2008, authorities and the bank’s board of directors announced a EUR 6.4 billion (eventually EUR 6 billion) capital injection intended to restore Dexia’s solvency and maintain systemwide stability. The …
Lessons Learned: Gaurav Vasisht, Sandra Ward
Lessons Learned: Gaurav Vasisht, Sandra Ward
Journal of Financial Crises
Gaurav Vasisht served as assistant counsel, banking and financial services, to the governor of New York during the Global Financial Crisis of 2007–2009 (GFC). In his role, Vasisht set the governor’s agenda for banking and financial policy and oversaw the regulatory and legislative priorities of the state banking and insurance departments. Vasisht played a pivotal role in developing and drafting consumer protection legislation, particularly as it related to housing foreclosures at the time of the crisis. This Lessons Learned is based on an interview with Vasisht that occurred on September 27, 2019.
Lessons Learned: Mike Leahy, Yasemin Sim Esmen
Lessons Learned: Mike Leahy, Yasemin Sim Esmen
Journal of Financial Crises
Mike Leahy was associate director at the Federal Reserve Board’s Division of International Finance between 2008 and 2010. He was instrumental in establishing swap lines with foreign central banks and reviewed and reported on excess reserve balances and required interest payments to depository institutions. This Lessons Learned is based on a phone interview with Leahy on October 22, 2020.
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: Michael Silva, Mercedes Cardona
Lessons Learned: Michael Silva, Mercedes Cardona
Journal of Financial Crises
Michael Silva was chief of staff to then-President of the Federal Reserve Bank of New York (FRBNY) Timothy Geithner from 2006 to 2009, including the early stages of the Global Financial Crisis (GFC). As such, Silva was critical in the coordination of personnel and information during the GFC, specifically during the period when the FRBNY was addressing liquidity stresses in the bank sector, including the bailout of Bear Stearns, the failure of Lehman Brothers, and the rescue of American International Group. When Geithner became President Barack Obama’s Treasury Secretary in 2009, Silva became chief of staff to his successor at …
Lessons Learned: Brian Stoker, Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: Brian Stoker, Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
Brian Stoker served in Merrill Lynch’s structured credit division for seven years, producing and trading asset-backed securities (ABS). In 2005, Stoker moved to Citigroup as a director of ABS CDO (collateralized debt obligation) and CLO (collateralized loan obligation) structuring. After the financial crisis, Stoker was an analyst at Carlson Capital for three years. In 2011, he joined StormHarbour Securities, serving as a managing director until 2018. From 2019 to 2021, he was director of securitization at Korth Direct Mortgage. Presently, Stoker is a licensed real estate agent in Miami. This Lessons Learned summary is based on an interview with Stoker.
Lessons Learned: Chris Ricciardi, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Chris Ricciardi, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Chris Ricciardi was a CDO pioneer who built the structured products units at CS First Boston and Merrill Lynch before moving to the asset management side. Ricciardi began his career structuring novel fixed-income securities at Prudential. At CS First Boston and Merrill, he catapulted each investment bank’s lagging unit into the top of the league tables for CDO (collateralized debt obligation) issuance. He was CEO of Cohen & Co. from 2006 to 2011, when he left to co-found investment management firm Mead Park Management. A graduate of the University of Richmond with an MBA from the Wharton School of the …
Lessons Learned: Eric Kolchinsky, Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: Eric Kolchinsky, Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
Eric Kolchinsky served as managing director of ratings for ABS CDOs (asset-backed security collateralized debt obligations) at Moody’s Investor Services from 2005 to 2007. Kolchinsky started his career in structured finance with stints at Goldman Sachs and Merrill Lynch. He joined Moody’s in 2000 as vice president for credit. In 2007, after Kolchinsky raised questions concerning the ratings of new deals in light of subprime downgrades, Moody’s removed him from his client-facing position. Kolchinsky supervised methodology for structured finance valuations at Moody’s Analytics for two years, before Moody’s suspended him altogether in 2009. Separated from Moody’s, Kolchinsky testified before Congress …
Lessons Learned: Stephen King, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Stephen King, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Stephen King started his career in finance at Bankers Trust in 1997 as a computer scientist with a business degree. He worked on structured credit transactions when credit derivatives were just being invented. In 2005, King joined Barclays’ structured credit group, where he managed a CDO (collateralized debt obligation) correlation desk that was different from standard dealer CDO units. In 2009, he launched C12 Capital Management to relieve Barclays of distressed subprime positions. Presently, King finances and builds luxury hotels as founder and CEO of Sardis Developments. This Lessons Learned summary is based on an interview with King.
Lessons Learned: Sohail Khan, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Sohail Khan, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Sohail Khan was managing director of fixed-income sales at Citigroup from 2005–09. Khan started his finance career in 1996, after completing his MBA at Lahore University of Management Sciences (LUMS). Khan gained broad experience in product structuring and sales of credit derivatives at Citigroup. As managing director during the subprime securitization boom and bust, he was involved with institutional sales of asset-backed securities (ABS) including collateralized debt obligations (CDOs); his clients were hedge funds, structured vehicles, and institutional buyers. In 2009, Khan left Citigroup to co-found StormHarbour Securities, a boutique investment bank he has headed since as managing principal. This …
Lessons Learned: Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
Steve Kasoff was employed at Elliott Management Corporation from 2003 until 2020. His responsibilities centered on developing the structured products and real estate groups at Elliott. He was made senior portfolio manager, a member of the firm’s management committee, and equity partner. Kasoff has extensive experience in the origination, trading, and management of structured products such as collateralized debt obligations (CDOs) and mortgage-backed securities, including earlier posts at Deutsche Bank, Merrill Lynch, and Lehman Brothers. He earned his BA in economics from Yale College and his MBA in finance from the Wharton School of the University of Pennsylvania. In 2016, …
Lessons Learned: James Finkel, Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: James Finkel, Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
A Wall Street veteran specializing in structured credit transactions, Jim Finkel was co-founder and director of the structured credit asset management firm Dynamic Credit Partners (DCP) from 2003 to 2009. Finkel started his career as a securities lawyer for the international law firm Cadwalader, Wickersham & Taft LLP, before moving over to the banking side in 1992. He specialized in mortgage-backed securities and collateralized loan obligations (CLOs) for several firms, including Bear Stearns and Deutsche Bank, where he headed the London-based CLO group. In 2003, Finkel returned to New York to launch and run DCP. In 2010, he joined financial …
Anatomy Of A Trade: The Making Of A Subprime Cdo, Steven H. Kasoff
Anatomy Of A Trade: The Making Of A Subprime Cdo, Steven H. Kasoff
Journal of Financial Crises
This article presents a short story, a sketch in eight parts of a single fictitious subprime collateralized debt obligation (CDO) transaction. The story is informed by expert interviews, documentary research, and the author’s firsthand experience.
A Special Project: Inside The Cdo Machine, Rosalind Z. Wiggins, Andrew Metrick
A Special Project: Inside The Cdo Machine, Rosalind Z. Wiggins, Andrew Metrick
Journal of Financial Crises
In this issue of the Journal of Financial Crisis, we feature Inside the CDO Machine—a special undertaking recently completed under the auspices of the Yale Program on Financial Stability Lessons Learned Oral History Project by Steven H. Kasoff, a Yale School of Management Fellow and former equity partner and head of real estate and structured products investments at the Elliott Management Corp., a global hedge fund. For the project, Kasoff undertook a series of interviews with industry professionals to focus on one of the critical derivatives products of the Global Financial Crisis (GFC), collateralized debt obligations (CDOs), and how they …
Wall Street’S Subprime Debacle: Firsthand Accounts From Inside The Cdo Machine, Matthew A. Lieber, Steven H. Kasoff
Wall Street’S Subprime Debacle: Firsthand Accounts From Inside The Cdo Machine, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
The observations, perceptions, and actions of participants in the subprime markets remain poorly documented and incompletely understood. Seeking to deepen our understanding, this study has produced seven interview summaries and one article telling the story of a hypothetical CDO deal. This article is organized in four parts. First, it presents our research questions and methods in relation to the existing knowledge on the topic. Second, it describes what we think are the study’s main contributions. Third, it previews the Lessons Learned summaries and interviews from each of the participants. And last, it identifies what we believe are some of the …