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Showing results 1 to 10 of approximately 11.
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Journal Article
Do we know what we owe? Consumer debt as reported by borrowers and lenders
Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents? propensity and ability to report debt characteristics accurately. This study compares household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). The borrower and lender debt distributions are compared by year, age of ...
Firm Debt Structure Can Mitigate Impact of Uncertainty Shock
We found evidence that the way a firm structures its debt can mitigate a significant amount of the negative effects from uncertainty shocks, especially for zombie firms.
Working Paper
Financing Modes and Lender Monitoring
Shadow banks are widely believed to be a creation of financial regulation and regulatory arbitrage. We show that bank and nonbank modes of financing can emerge endogenously in a simple borrower-lender framework absent regulatory arbitrage or policy interventions. The coexistence of banks and shadow banks in the absence of regulatory intervention speaks to the importance of shadow banks as alternative modes of financial intermediation. We explore the scope of regulation in determining the size and location of shadow banking, as opposed to how regulation can be designed to curtail shadow bank ...
Briefing
Should the Fed Issue Digital Currency?
The United States might benefit from eventually replacing most physical cash with central bank digital currency (CBCD), but first the Federal Reserve must resolve several key policy and implementation issues, such as establishing comparative advantage over private issuers and ensuring safety and soundness.
Journal Article
Rapid Declines in the Fed’s Overnight Reverse Repurchase (ON RRP) Facility May Start to Slow
The value of assets held at the Federal Reserve’s overnight reverse repurchase (ON RRP) facility has dropped by close to 60 percent from its peak in December 2022. Much of this drop is attributed to an increase in Treasury bill issuance to refill the Treasury General Account (TGA) after the most recent debt-limit debate. However, the TGA is not expected to grow much more, suggesting the rapid decline in assets held at the ON RRP could slow.
Briefing
Bank Lending in the Time of COVID
We discuss the evolution of bank lending during the first several months of the COVID-19 pandemic. Large domestic banks and foreign-related banks increased significantly their lending to businesses during these months, much of it through existing lines of credit. Small domestic banks played an active role in providing paycheck protection loans. In terms of consumer credit, the stock of banks' residential mortgage loans did not change substantially, and the amount of bank credit flowing directly to consumers decreased.
Briefing
Federal Reserve MBS Purchases in Response to the COVID-19 Pandemic
The Federal Reserve’s purchases of agency mortgage-backed securities — launched in response to financial disruptions caused by COVID-19 — appear to have restored smooth market function supporting the continued flow of credit to mortgage borrowers. However, the amount of purchases necessary to achieve this outcome raises concerns about the resilience of private-market structures that perform this critically important function
Briefing
Who Borrows From the Discount Window in "Normal" Times?
New rules mandate the release of transaction-level data on loans at the Federal Reserve's discount window. This higher level of transparency has created an opportunity to learn more about the role of the discount window outside of crisis periods. These data show that larger and less liquid banks use the discount window more actively and that holdings of bank reserves are negatively correlated with discount window borrowing. Access to the discount window affects bank portfolio decisions, in particular holdings of reserves, in subtle ways.