Working Paper
Comparison of Small Bank Failures and FDIC Losses in the 1986–92 and 2007–13 Banking Crises
Balla, Eliana; Mazur, Laurel; Prescott, Edward Simpson; Walter, John R. (2017-11-13)
Failure rates of small commercial banks during the banking crisis of the late 1980s were about 7.6%, which is significantly higher than the 5.7% failure rate during the recent crisis. The higher rate is surprising because small banks had significantly increased their commercial real estate (CRE) lending by the second crisis, which is riskier than other types of lending, and economic shocks were more severe in the recent crisis. We compare failure rates in the two periods using a statistical model that allows us to decompose the effect of changes in bank characteristics and economic shocks on ...
Working Papers (Old Series) , Paper 1719

Conference Paper
How market value accounting would affect banks
Walter, John R.; Mengle, David L. (1991)
Proceedings , Paper 336

Journal Article
Keeping SAIF safe
Walter, John R. (1995-07)
The insurance fund covering most savings institutions might not be as safe as its name suggests.
Cross Sections , Volume 12 , Issue Sum , Pages 10-14

Journal Article
The region's BHCs rank high
Summers, Bruce J.; Walter, John R. (1988-04)
Cross Sections , Issue Spr , Pages 3-4

Briefing
Assessing the Risks of Mortgage REITs
Pellerin, Sabrina; Sabol, Steven; Price, David A.; Walter, John R. (2013-11)
Regulators have expressed concern about the growth of a category of real estate investment trusts (REITs) that today invest primarily in mortgage-backed securities (MBS). These companies, known as mortgage REITs, or mREITs, have increased both in number and in asset size since the financial crisis, benefiting from federal guarantees and other support for MBS and from favorable regulatory treatment that allows high levels of leverage. While mREIT investors face significant risks, the level of risk that mREITs present to the financial system as a whole is unclear.
Richmond Fed Economic Brief , Issue Nov

Briefing
The effect of interest on reserves on monetary policy
Walter, John R.; Courtois, Renee (2009-12)
In October 2008 the Federal Reserve began paying banks interest on the reserves they hold. This action was intended to remove the implicit, distortionary tax that reserve requirements impose on banks, as well as help the Fed maintain the fed funds rate at its target. Going forward, interest on reserves is likely to simplify monetary policy implementation, as well as allow the Fed to pursue separate monetary and credit policies.
Richmond Fed Economic Brief , Issue Dec

Briefing
Identifying systemically important financial institutions
Walter, John R.; Price, David A. (2011-04)
The Dodd-Frank Act, in addressing systemic risks to the financial system, requires federal regulators to extend a variety of requirements to nonbank financial institutions that are deemed "systemically important." But how can regulators, and the institutions themselves, best determine whether an institution is systemically important? Research in this area has generated a number of potential approaches.
Richmond Fed Economic Brief , Issue Apr

Briefing
Did Banking Reforms of the Early 1990s Fail? Lessons from Comparing Two Banking Crises
Balla, Eliana; Prescott, Edward Simpson; Walter, John R.; Fessenden, Helen (2015-06)
New Richmond Fed research on community and midsize banks evaluates the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and Basel I by comparing failures in the 1986-92 period to those in 2007-13. Banks greatly increased commercial real estate lending between the two banking crises, but higher capital mitigated this risk. Failure rates in the recent crisis were mainly driven by the severity of the economic shocks. However, higher capital did not help contain FDIC losses, which were much larger in the recent crisis. One possible explanation is limitations in the accounting ...
Richmond Fed Economic Brief , Issue June

Briefing
Assessing Large Financial Firm Resolvability
Walter, John R.; Haltom, Renee Courtois; Jarque, Arantxa (2018-06)
A large financial institution may be said to be "resolvable" if, in the event of failure, policymakers would allow it to go through bankruptcy without financial assistance from the government. The choice between bankruptcy or bailout trades off different sets of costs on the economy. This Economic Brief presents a new tool that could assist policymakers with this evaluation, potentially helping to curb the "too big to fail" problem, serving as a useful complement to the "living wills" process, and making the resolution process more transparent.
Richmond Fed Economic Brief , Issue June

Briefing
It's a Wonderful Loan: A Short History of Building and Loan Associations
Walter, John R.; Price, David A. (2019-01)
Prior to the advent of modern home mortgage markets in the United States, markets in which mortgage-backed securities and government-sponsored enterprises now play significant roles, prospective homebuyers had to rely on other mechanisms of home finance. For about a century, cooperative organizations known as building and loan associations, a concept imported from Britain, served millions of American savers and homebuyers.
Richmond Fed Economic Brief , Issue January