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Newsletter
Reforming financial regulation - a conference summary
The Chicago Fed?s 45th annual Conference on Bank Structure and Competition, which took place May 6?8, 2009, brought together industry personnel, regulators, and academics to discuss the recent financial crisis and financial regulatory reform, among other issues.
Journal Article
Assessing the impact of regulation on bank cost efficiency
The author finds that the bank production process was significantly distorted during a period typically associated with heavy industry regulation. As deregulation occurred, banks fully exploited the cost advantages associated with size and reaped significant gains from technological change. Efficiency significantly improved with deregulation.
Journal Article
Policymakers, researchers, and practitioners discuss the role of central counterparties
This article summarizes a conference, titled ?Issues Related to Central Counterparty Clearing,? cosponsored by the Federal Reserve Bank of Chicago and the European Central Bank on April 3?4, 2006. The conference brought together industry executives, policymakers, and research economists to evaluate current public policy issues involving central counterparties.
Working Paper
Subordinated debt and bank capital reform
In recent years there has been a growing realization that there are significant problems with the current bank risk-based capital guidelines. As financial firms have become more sophisticated and complex they have effectively arbitraged the existing capital requirements. They have become so good at avoiding the intent of capital regulation that the regulations have essentially ceased to be a safety and soundness issue for supervisors and have become more a compliance issue. There is also a growing realization that bank regulation must more effectively incorporate market discipline to ...
Working Paper
Local market consolidation and bank productive efficiency
The recent banking literature has evaluated the impact of mergers on the efficiency of the merging parties [e.g., Rhoades (1993), Shaffer (1993), Fixler and Zieschang (1993)]. Similarly, there has been analysis of the impact of eliminating bank entry restrictions on the average performance of banks [Jayaratne and Strahan (1998)]. The evidence suggests that acquiring banks are typically more efficient than are acquired banks, resulting in the potential for the new combined organization to be more efficient and, therefore, for the merger to be welfare enhancing. The evidence also suggests, ...
Newsletter
Implementing financial reform regulations from the Dodd–Frank Act and Basel III
The Chicago Fed?s 47th annual Conference on Bank Structure and Competition, which took place May 4?6, 2011, focused on the implementation of new regulations mandated by the Dodd?Frank Wall Street Reform and Consumer Protection Act (DFA) and proposed by the Basel Committee on Banking Supervision (BCBS) in its Basel III framework.
Journal Article
Subordinated debt as bank capital: a proposal for regulatory reform
Industry observes have proposed increasing the role of subordinated debt in bank capital requirements as a means to increase market discipline. A recent Federal Reserve System Task Force evaluated the characteristics of such proposals. Here, the authors take the next step and offer a specific sub-debt proposal. They describe how it would operate and what changes it would require in the regulatory framework.