For a large number of European economies, real estate accounts for more than 70% of wealth, whereas financial assets usually account for below 20%. From a macroeconomic perspective, the large exposure to the real estate market represents both a vulnerability and a source of resilience: on the one hand, it exposes a large share of… Read More »
When the Covid-19 outbreak became a national emergency in the United States, the Federal Reserve, having learned the lessons from the last crisis, was quick and bold in reacting. In only nine days, from March 15 to March 23, the Fed cut its target for the federal funds rate, provided forward guidance, intervened in markets… Read More »
The EU’s Fintech Action Plan (now Digital Finance Strategy) and the Sustainable Finance Strategy represent important pillars of the bloc’s current policy agenda. While the two areas have been treated as separate for a long time, they present certain common features and great potential if combined. The COVID-19 pandemic provides an opportunity for countries in… Read More »
During the COVID-19 pandemic a new consensus has emerged which castigates modern finance for its tendency towards excessive leverage, and short-termism. As all this activity took place against a background of disappearing disposable incomes, it is not surprising that it also boosted inequality, especially between the asset-rich and the asset-light classes with the latter having… Read More »
Payment systems are critical infrastructure that generate positive network externalities. The more people who use them, the better off everyone using them is. They allow households, businesses, governments, and nonprofits to clear and settle transactions. People rely on them to receive their income through direct deposit or cashing checks; pay their rent, mortgage, or other… Read More »
Corporate executives play a central role, perhaps even the central role, in a firm’s decision to undertake a merger or acquisition (M&A). M&A deals are often done at the behest of executives, who also largely run the deal-making process. Senior executives, especially CEOs, play a pivotal role in crafting, negotiating, and closing deals. They are… Read More »
Banks became major participants in U.S. securities markets twice in the past century – during the 1920s and after the mid-1990s. Both times, banks with “universal banking” powers originated risky loans and packaged them into securities that were sold to investors around the world. Both times, universal banks promoted unsustainable credit booms that led to… Read More »
The COVID-19 pandemic and associated global economic shutdown roiled financial markets around the world during the spring of 2020. The usually placid municipal securities market was not immune from this disruption. Initially, investors flocked to municipal securities to de-risk portfolios in response to the growing pandemic, pushing prices higher and bond yields to record lows.… Read More »
The COVID-19 pandemic has changed many aspects of the way that individuals engage with banking and payment tools, including various FinTech services. There are several reasons why the pandemic might have accelerated the adoption of FinTech and other digital platforms in payments by consumers and financial institutions. The pandemic may have led to an increase… Read More »
The rise of FinTech is one of the most critical developments in finance over the past decade. One important FinTech development is initial coin offerings (ICOs), whereby investors can purchase blockchain-based cryptocurrencies directly from entrepreneurs. To those new to the crypto world, ICOs provide a mechanism to raise external funding through the issuance of digital… Read More »
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