Public Policy Commons^™

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 …

Ireland 2009 Recapitalization Program For Financial Institutions, Steven Kelly

Journal of Financial Crises

At the November 2008 height of the Global Financial Crisis, Ireland’s Department of Finance announced a willingness to inject capital into the six largest banks. This announcement followed the issuance of a blanket guarantee of those banks’ liabilities in September 2008. After broadly designing the potential investments in 2008, the Irish government came to agreements with Bank of Ireland and Allied Irish Banks in February 2009 to inject €3.5 billion ($4.5 billion) in each bank in exchange for preferred equity stakes. The government funded the investments from the funds of the National Pensions Reserve Fund, something it would secure the …

Indonesia Joint Recapitalization Of 1999, Vaasavi Unnava, Ariel Smith

Journal of Financial Crises

The Indonesian government implemented a joint recapitalization program in 1999 to aid some of its private banks struggling with the effects of the Asian Economic Crisis. Nine banks were eligible, and seven ultimately participated. The program was voluntary; in order to participate, bank managers had to pass a test proving that they were competent enough to run their bank and create a three-year plan for the bank’s operations subject to independent assessment. All of the bank participants were able to return to the 4% minimum capital adequacy ratio by the end of the program.

Hungary Recapitalization Scheme, Alec Buchholtz

Journal of Financial Crises

In the midst of the global financial crisis in October 2008, the Magyar Namzeti Bank (MNB), the Hungarian national bank, noticed a selloff of government securities by foreign banks and a large depreciation in the exchange rate of the Hungarian forint (HUF) in FX markets. Hungarian banks experienced liquidity pressure due to margin calls on FX swap contracts, prompting the MNB and Minister of Finance to seek assistance from the International Monetary Fund (IMF), European Central Bank (ECB) and the World Bank. The IMF and ECB approved the Hungarian government’s (the State) requests in late 2008 to create a €19 …

The Hungarian Bank Recapitalization Program, Junko Oguri

Journal of Financial Crises

Hungary implemented a number of new policies from the late 1980s to the early 1990s, shifting from a centrally planned economy to a market economy. Despite the top-down market reforms, Hungary lacked the knowledge to build a fully functional financial system. Eventually, an economic turmoil caused by the collapse of eastern markets and fragility in the financial system led to the banking crisis of 1992–1993, revealing the undercapitalization of the financial system. The government implemented the recapitalization, or “bank consolidation,” as part of a stabilization program. It injected capital into banks in three stages—in December 1993, May 1994, and December …

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 …

Greece (2008) – Capital Injections, Manuel León Hoyos

Journal of Financial Crises

In October 2008, in the midst of the Global Financial Crisis (2007–09), the Greek government announced a €28 billion ($36 billion) government package. Greek Law 3723/2008, “Enhancement of Liquidity in the Economy in Response to the Impact of the International Financial Crisis,” was passed and approved under European Union State Aid rules. The Greek law provided for three voluntary programs: recapitalizations (€5 billion), guarantees (€15 billion), and securities (€8 billion). This case study exclusively examines the recapitalization program. In this program, the Greek government acquired convertible preferred shares in banks in order to build and maintain banks’ Tier 1 capital …

Germany Soffin Capital Injections, Priya Sankar

Journal of Financial Crises

The insolvency of Lehman Brothers in September 2008 and the subsequent global liquidity crisis spurred the German state to pass the Financial Market Stabilization Fund Act (Finanzmarktstabilisierungsfondsgesetz, “FMStFG”) establishing the Federal Agency for Financial Market Supervision (Bundesanstalt für Finanzmarktstabilisierung), or FMSA. Created in October 2008, it provided government support to ailing financial institutions. The FMSA supported German banks and maintained the stability of the German banking system, in part by establishing the Financial Market Stabilization Fund (Sonderfunds Finanzmarktstabilisierung), or SoFFin. SoFFin could provide capital injections and risk shield measures of €80 billion and also possessed a guarantee provision of up …

France Société De Prise De Participation De L’État (Sppe), Devyn Jeffereis

Journal of Financial Crises

As the Global Financial Crisis deepened, the bankruptcy of Lehman Brothers on September 15, 2008, and ensuing contagion began affecting the French economy and financial system. France experienced declines in major economic indicators such as GDP, household consumption, and investment. In addition, the ensuing credit crunch in financial markets resulted in the seizing up of various lending markets. Due to conservative business practices, a consolidated market structure, and a sound regulatory framework, the French banks were relatively better situated than their European counterparts to weather the crisis. However, the French authorities instituted a precautionary recapitalization scheme in order to “restore …

Finland’S 1992 Capital Injection, Kaleb B. Nygaard

Journal of Financial Crises

Following a large-scale deregulation of the financial sector during the 1980s and subsequent massive credit expansion, a banking crisis in Finland caused a sharp contraction in the economy in the early 1990s. To prevent the collapse of the banking system, the government offered FIM 8 billion in capital injections. Parliament appropriated the funds in the spring of 1992 and terms were defined in June 1992. The program was open to all banks, in proportion to their size, regardless of their solvency. In the fall of 1992, FIM 7.9 billion was deployed to 56 cooperative banks and 22 savings banks of …

Danish Capital Injections Scheme 2009 (Dk Gfc), Priya Sankar

Journal of Financial Crises

Both the international financial system and Denmark were experiencing challenges in 2007 and 2008, and they came to a head in Denmark when Roskilde Bank experienced liquidity pressures in June 2008. As it became clear that Roskilde Bank was insolvent and no private solutions would be found, and as the global financial crisis worsened leading to the bankruptcy of Lehman Brothers, the Danish government decided to take stronger action. To ensure the short-term survival of Roskilde Bank, the national bank issued a non-limited credit facility. After it passed a deposit guarantee scheme in 2008 and established a Financial Stability Company, …

Austria: Finanzmarktstabilitätsgesetz (Finstag), Claire Simon

Journal of Financial Crises

Following the adoption of a joint framework by euro area countries in response to the intensifying financial crisis in October 2008, Austria enacted a package of measures including the Financial Market Stability Act (Finanzmarktstabilitätsgesetz, or FinStaG). In addition to permitting nationalization under certain circumstances, FinStaG allowed the Austrian government to use six specific measures to recapitalize credit institutions operating in Austria and Austrian insurance companies. According to FinStaG, €15 billion ($22 billion) could be used for this purpose, though this amount was later increased. Eight institutions received support through FinStaG, and the government granted capital and liquidity support totaling €21 …

Recruitment Machines, Community Power And Political Return On Investment (Proi): Economic Development Policy In The Age Of Amazon, Eric G. Griego Montoya

Political Science ETDs

ABSTRACT

A fundamental policy choice in economic development among local policy makers is the appropriate mix of “outside” strategies that use incentives to attract companies, and “inside” strategies that invest in smaller and local businesses. Using a mixed-methods research design, including national and state surveys along with qualitative analysis of interviews conducted with policy elites, I examine the role of ideology, elites, community, competition, social capital (trust and influence), and electoral politics in these policy decisions. I use new descriptive theoretical frameworks called “recruitment machines” and “Political Return on Investment (PROI)” to describe how and why local elected officials support …

Did Government Benefits Help Israeli Households Avoid Hardship During Covid-19? Evidence From A National Survey, Olga Kondratjeva, Talia Schwartz-Tayri, Sam Bufe, Stephen Roll, John Gal, Michal Grinstein-Weiss

Social Policy Institute Research

At the outset of the COVID-19 pandemic, the government of Israel quickly introduced aggressive social distancing measures to curb the virus spread and adapted its unemployment insurance program in response to rising unemployment rates. This study examines the relationship between household income and the experience of material hardship during the COVID-19 pandemic in Israel, and investigates how the receipt of unemployment benefits moderated the relationship between income and material hardship. Using data from a household survey, we find a negative association between household income and the experience of material hardship. Moreover, middle-income households receiving unemployment benefits were more likely to …

Expanded Child Tax Credit Payments Have Not Reduced Employment, Stephen Roll, Leah Hamilton, Yung Chun

Social Policy Institute Research

Approximately 60 million American children living in 35 million households are now receiving monthly payments from the federal government as part of the temporary Child Tax Credit (CTC) expansion. Recently, a debate has emerged over whether or not the expanded CTC will cause parents to leave the workforce. On one side of the debate, a large number of economists have argued that the CTC will not cause a reduction in employment. However, a recent study used a simulation approach to estimate that 2.6% of parents will exit the labor force as a result of the CTC.

The reports below address …

Artificial Intelligence (Ai) Capacity In Mountain West Metros, Olivia K. Cheche, Ally M. Beckwith, William E. Brown Jr.

Economic Development & Workforce

This fact sheet highlights data on artificial intelligence (AI) growth in Mountain West metropolitan areas over the last several decades, as originally reported by Mark Muro and Sifan Liu from the Brookings Institution’s Metropolitan Policy Program. The Brookings report examines how various metros across the United States contribute towards AI technology creation and business activity.

Investment Patterns In Mountain West States, Counties, And Nevada Cities 2005-2019, Peter Grema, Zachary Walusek, Katie M. Gilbertson, William E. Brown Jr.

Economic Development & Workforce

The purpose of this fact sheet is to summarize findings on capital flows across Mountain West states and counties, and within Nevada cities. The “Gauging Investment Patterns across the US” report by the Urban Institute present findings of overall volume of capital deployed, racial equity of investments, and income equity for each respective geographic area. The full report further breaks down these three main categories into 18 other metrics.

Startup Businesses In The Mountain West, 2014-2018, Olivia K. Cheche, William E. Brown Jr.

Economic Development & Workforce

This fact sheet highlights data on startup businesses in Mountain West states and metropolitan areas, as originally reported by Roofstock’s “U.S. Cities With the Most Startup Businesses” report. Startup businesses are defined as new businesses launched by entrepreneurs that create jobs and spur efficiency and innovation. This report examines the startup formation rate, annual startup formations, annual new jobs created by startups, and jobs created by startups as a percentage of all new jobs within states and metros across the United States.

Covid-19 And Nevada Counties: Employment Data, May 2019 And May 2021, Joshua Padilla, Katie M. Gilbertson, William E. Brown Jr.

Economic Development & Workforce

This fact sheet displays county-level employment data and unemployment rates for 17 counties in Nevada, as reported by The Daily Yonder article “Rural Employment Grew in May, but Fewer People Are Seeking Jobs” in July 2021. Bill Bishop and Tim Marema compiled data from the U.S. Bureau of Labor Statistics (BLS) for each county in the United States for May 2019 and May 2021.

Effect Of Public Debt On Private Investment In Nigeria: Evidence From An Asymmetric Dynamic Model, A. B. Abubakar, S. O. Mamman

Economic and Financial Review

This study examines the effect of public debt on private investment in Nigeria. The linear and non-linear ARDL models are employed to analyse the series spanning the period 1981 to 2018. The estimation results show that an increase in total debt, external debt, and debt service payment adversely affects private investment, with the effects being symmetric. On the other hand, the effect of domestic debt on private investment is found to be asymmetric. Although a negative shock in domestic debt greatly improves private investment, a positive shock leads to a meagre positive effect on private investment. This finding indicates that …

Vaccination Options For Medicaid Parents Uncomfortable With Office Visits During Covid Pandemic, Amy Mcqueen, Tess Thompson, Enguday Teshome, Jennifer Staten, Saneel Kulkarni, Thidaporn Tanpattana, Lourdes Balaez, Matthew W. Kreuter

Social Policy Institute Research

Objective: Rates of child vaccinations declined during the COVID pandemic, which increases the risk of outbreaks of preventable diseases among children. Methods: We conducted an online survey of parents of Medicaid beneficiaries age 0-5 years old in Florida USA during January 2021 to assess barriers and strategies to increase adherence to childhood vaccinations.

Results: We surveyed 1,951 parents. Most (91%) respondents reported their child was up-to-date with childhood vaccinations, but fewer (36%) children had received a flu shot. Some (31%) parents had wanted to take their child to see a doctor but decided not to, and 22% were …

Use Of Public Benefits Over The First Year Of Pandemic: Exploring Access, Delays And Outcomes, Sam Bufe, Stephen Roll, Katie Kristensen, Dan Zhao, Mathieu Despard, Michal Grinstein-Weiss

Social Policy Institute Research

In response to the economic crisis caused by the COVID-19 pandemic, the U.S. federal government enacted initiatives designed to help households weather the pandemic’s effects. These initiatives included expansions of existing programs, such as unemployment insurance, as well as new programs like the economic impact payments. In this brief, we investigate the extent to which households relied on an array of public benefit programs over the course of the pandemic, how they used their economic impact payments, and the extent to which the unemployment insurance expansion was effective in insulating recipients from hardship during the pandemic.

We find that, in …

Employment Changes During Covid-19, Mathieu Despard, Sam Bufe, Stephen Roll, Katie Kristensen

Social Policy Institute Research

Early in the COVID-19 pandemic, U.S. unemployment peaked at 14.4%. While some workers have returned to payrolls, others have been left behind. This brief examines the nuances of employment changes over the course of the pandemic and the impact of those changes on household financial well-being. Our study finds that the proportion of employees who were laid off peaked in the spring of 2020 and has only recently returned to pre-pandemic levels.

Meanwhile, self-employment rose during the pandemic by 42% between the springs of 2020 and 2021. In households where someone lost a job during the pandemic, rates of financial …

Impact Of Covid-19 On Households With Children: Family Hardships And Policy Insights, Alejandra Muñoz-Rivera, Jason Jabbari, Stephen Roll, Michal Grinstein-Weiss

Social Policy Institute Research

The COVID-19 pandemic caused major disruptions in employment, child care and education. As a result, both parents and children experienced a variety of hardships in their work and education. While these hardships had reverberating effects throughout households, they were not equally distributed across families with children. In this brief, we explore the effects of COVID-19 on families with children, highlighting unaddressed areas of need, as well as potential points of intervention. In this study we find:

• Almost one-quarter (22%) of families experienced job or income loss as a result of child care disruptions, which was especially prevalent in households with …

Housing Hardships During Covid-19, Sophia Fox-Dichter, Yung Chun, Stephen Roll, Katie Kristensen, Michal Grinstein-Weiss

Social Policy Institute Research

Even prior to the COVID-19 pandemic, U.S. households were burdened by the cost of rental and mortgage payments, burdens which disproportionately fell on Black and Hispanic families. Using a 5-wave survey, we examined whether disparities in housing cost burden continued throughout the pandemic and trends in how households fell behind on rent and mortgage payments. We found that more than a third of households experienced housing cost burdens during the pandemic, with a slightly higher percentage of households of color bearing cost burdens than white households. Renters had greater cost burdens than homeowners.

During the pandemic, significantly more Black and …

The Socioeconomic Impacts Of Covid-19 Study: Survey Methodology Report, Stephen Roll, Sam Bufe, Yung Chun, Michal Grinstein-Weiss

Social Policy Institute Research

When COVID-19 was declared a pandemic, and economic shutdowns began in March 2020, households across the United States were faced with an unprecedented crisis that would affect their health, financial security and overall well-being for an unforeseeable amount of time. In order to examine and track the wide-ranging impacts of the pandemic on households, as well as the efficacy of different public and private efforts to mitigate these impacts, the Social Policy Institute at Washington University in St. Louis (SPI) launched the Socioeconomic Impacts of COVID-19 Survey (SEICS) in the United States just weeks after the pandemic became a national …

Employment, Financial And Well-Being Effects Of The 2021 Expanded Child Tax Credit: Wave 1 Executive Summary, Leah Hamilton, Stephen Roll, Mathieu Despard, Elaine Maag

Social Policy Institute Research

The 2021 temporary expansion of the Child Tax Credit (CTC) is unprecedented in its reach and is predicted to cut American child poverty by more than half. The expanded CTC provides families with $3,600 for every child in the household under the age of six, and $3,000 for every child between the ages of six and 17. Almost all middle- and low-income families with children are eligible for the CTC. Married parents making less than $150,000 and single parents making less than $112,500 per year will receive the full amount of the credit, which begins to phase out slowly after …

Covid-19 Lockdowns Are Central Planning, Stephen Langeland

Liberty University Journal of Statesmanship & Public Policy

The panic surrounding the COVID-19 pandemic led politicians to implement lockdowns and issue “stay-at-home” orders that follow in a long line of government attempts over the past century at economic central planning. With only a few notable exceptions among the several states, elected officials and bureaucrats seized on emergency powers afforded them by the onset of the novel coronavirus. In mid-March 2020 the publishing of the now infamous epidemiological models gave governments the sensational information they needed to get the wheels of government planners turning. The present government-induced crisis once again demonstrates that the intellectuals of the ruling class responsible …

Homelessness Estimates In The Mountain West, 2020, Saha Salahi, Vanessa Booth, William E. Brown Jr.

Demography

This fact sheet summarizes a recent report titled, “The 2020 Annual Homelessness Assessment Report (AHAR) to Congress,” by the U.S. Department of Housing and Urban Development. By synthesizing homelessness vulnerability categories to the Mountain West states, this report offers data for Arizona, Colorado, Nevada, New Mexico, and Utah.

Small Business Equity In Nevada, 2021, Ally M. Beckwith, Olivia K. Cheche, William E. Brown Jr.

Economic Development & Workforce

This fact sheet highlights data on minority and women-owned small businesses in Nevada in 2021, as originally reported by the Small Business Equity Tool. This tool examines the representation of Black, Asian, Latino, minority, and women-owned small businesses in the largest metropolitan areas and cities across the United States.