Author Archives: Guest Blogger

Letter to SEC on Corporate Transparency and Accountability and the Coronavirus Pandemic

By | May 26, 2020

Courtesy of Andy Green, Tyler Gellasch, Erik Gerding, Lev Bagramian, Urska Velikonja, Rachel Curley, Renee Jones, and Divya Vijay The following letter was submitted by the authors on May 26, 2020, to the Securities and Exchange Commission (SEC) Chairman Jay Clayton and filed in response to selected rulemakings (listed in the appendix below). SEC proposed… Read More »

Social and Economic Distancing

By | May 6, 2020

Courtesy of Selman Erol and Guillermo Ordonez The COVID-19 pandemic has reminded us of the effectiveness of social distancing practices, voluntary and mandated, to reduce disease transmission in the presence of highly contagious infections. Even though COVID-19 has a relatively low fatality rate, slowing down the rate of transmission is critical to avoid overwhelming the… Read More »

The COVID-19 Pandemic and the Global Debt Epidemic

By | April 20, 2020

Courtesy of Chris Smith and Sangita Gazi  A decade after Lehman Brothers collapsed, the Federal Reserve Bank of St. Louis reviewed the economics literature and concluded that “one of the main reasons why the subsequent recession was ‘great’ was due to high levels of leverage and debt.” On the eve of the 2008 financial crisis,… Read More »

LIBOR Benchmark Reform: An Overview of LIBOR Changes and the Impact on Financial Services, Pricing, and Risk

By | April 1, 2020

Courtesy of Nicholas Burgess  The financial crisis of 2008 fundamentally altered the interbank market and the way banks fund themselves. Banks and regulators alike recognised the risks inherent in unsecured borrowing and lending between banks. Consequently, the London Interbank Offered Rate (LIBOR) derived from the London interbank unsecured lending market, was revealed to suffer from… Read More »

Congress and the President Must Counteract the Wealth Inequality the Fed Will Create

By | March 23, 2020

Courtesy of Todd Phillips* This morning, the Federal Reserve announced it would begin open-ended quantitative easing, offering to buy “Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy.” This expands on its announcement last week that it’d buy up to $700 billion worth… Read More »

A World Without LIBOR: A New Financial Order?

By | March 16, 2020

Courtesy of Xing Huan, Gary J. Previts, and Antonio Parbonetti Introduction On June 27, 2012, news of Barclays being fined for manipulating the daily setting of the London Interbank Offered Rate (LIBOR) and Euro Interbank Offered Rate (EURIBOR) flooded the media. Nearly eight years later, the transition away from LIBOR is still a work in… Read More »

Dealing with the Carbon Bubble: The Senate Select Committee on the Climate Crisis

By | March 12, 2020

Courtesy of Graham Steele  Introduction  Today, the Senate Select Committee on the Climate Crisis has convened a hearing about the potential financial risks from climate change. This hearing is the culmination of years of expert warnings about the risks of a growing carbon bubble that, like other asset bubbles, could result in stranded assets and… Read More »

Negative Interest Rates: Sharp Increase in Risk-Taking Behavior

By | February 12, 2020

Courtesy of Maren Baars, Henning Cordes, and Hannes Mohrschladt As a consequence of the global financial crisis and the European sovereign debt crisis, risk-free nominal interest rates have plummeted – in some countries, they even turned negative. These interest rate decreases lead to a systematically higher risk appetite by institutional investors, such as banks and… Read More »

A Closer Look at CECL: What Can We Learn from the European Implementation of IFRS 9?

By | January 29, 2020

Courtesy of Arndt-Gerrit Kund and Daniel Rugilo Introduction The sub-prime crisis of 2008 drew attention to the fundamental drawbacks of the incurred loss accounting model, which determined the loan loss provisions for troubled exposures. The subsequent financial crisis revealed in particular that the recognition of impairments was not only too late, but also incomplete. As… Read More »

Ethical Considerations of Blockchain: Do We Need a Blockchain Code of Conduct?

By | January 21, 2020

Courtesy of Michele Benedetto Neitz  Blockchain technology is not as decentralized as we think. From the outset, the original innovators of blockchain viewed the technology as an opportunity to solve the “problem” of government oversight over economic activities. A truly decentralized, immutable ledger, would remove the potential for human shortcomings and state control, impacting everything… Read More »