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Journal Article
How Dodd–Frank affects small bank costs
Do stricter regulations enacted since the financial crisis pose a significant burden?
Journal Article
Banking trends: how Dodd–Frank affects small bank costs
Do stricter regulations enacted since the financial crisis pose a significant burden?
Working Paper
Comparison of Small Bank Failures and FDIC Losses in the 1986–92 and 2007–13 Banking Crises
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 Paper
Does Price Regulation Affect Competition? Evidence from Credit Card Solicitations
We study the unintended consequences of consumer financial regulations, focusing on the CARD Act, which restricts consumer credit card issuers? ability to raise interest rates. We estimate the competitive responsiveness-the degree to which a credit card issuer changes offered interest rates in response to changes in interest rates offered by its competitors-as a measure of competition in the credit card market. Using small business card offers, which are not subject to the Act, as a control group, we find a significant decline in the competitive responsiveness after the Act. The decline in ...
Journal Article
Over-the-counter swaps – before and after reform
Now that the main elements of the new regulations can be described, let?s see how a simplified trade would be typically carried out by a fictional set of institutions both before and after the reform.3 First Bank is a large dealer bank that buys and sells securities and derivatives. High Yield (HY) is a mutual fund that has a large portfolio of junk bonds. HY wants to hedge against the risk of a downturn in the junk bond market.