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Mon, 23 Nov 2009 00:00:00 GMT
What really caused the great economic crisis of the past year? Should the Fed’s powers be stripped away, per legislation sponsored by Rep. Ron Paul that recently passed the House Financial Services Committee? In an effort to help inform the debate, Brookings Fellow Douglas Elliott and Senior Fellow Martin Baily ponder the importance of public perceptions of the causes of the crisis - and how they will affect chances of financial regulatory reform.
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Tue, 17 Nov 2009 09:30:00 GMT
Event Information:
- November 17, 2009, 9:30 AM to 4:00 PM
On November 17, a day-long conference co-sponsored by Brookings and the Heritage Foundation will explore the measurement challenges associated with the recession, particularly in the financial and housing sectors; how innovation can become a standard component of our national accounting system, and how incorporating innovation metrics will aid the development of a unified picture of the sources of growth and economic disruption.
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Mon, 16 Nov 2009 10:37:21 GMT
Sen. Christopher Dodd (D-Conn) has introduced legislation to reform the financial sector in the wake of the recent economic crisis. Senator Dodd’s proposal calls for consolidating the four federal financial regulatory agencies into a single regulator. Fellow Douglas Elliott says regulation consolidation is definitely in order.
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Mon, 02 Nov 2009 12:00:00 GMT
This month marks 80 years since the Wall Street crash of 1929 that was one cause of the Great Depression. Alice Rivlin says the 1929 crash led to the creation of the financial and social safety net measures that have helped prevent today's economic crisis from being a full-blown depression.
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Mon, 19 Oct 2009 00:00:00 GMT
In light of the debate over whether the Obama administration's plan for financial regulation goes far enough to curb institutions that become "too big to fail," Martin Baily addresses the question of whether any regulation of "systemic risk" will inevitably lead to the designation of some banks as "too big to fail."
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Thu, 08 Oct 2009 00:00:00 GMT
The fall global economic agenda is well underway with the completion of the G-20 Pittsburgh Summit and the IMF and World Bank Annual Meetings in Istanbul. Kemal Derviş discusses the key themes coming out of these “historic” meetings, highlighting the essential roles of both the informal and formal channels of global economic governance and the way forward after the crisis.
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Sun, 04 Oct 2009 00:00:00 GMT
During a lecture at the IMF-World Bank 2009 Annual Meetings, Kemal Derviş discussed global growth prospects following the economic crisis and the role that supply side factors and macroeconomic management can play.
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Thu, 17 Sep 2009 00:00:00 GMT
On September 24, President Obama will chair his first G-20 Summit in Pittsburgh. With the world economy improving, leaders will now focus their attention on economic recovery and restoring financial stability. Experts from Brookings Global Economy and Development program analyze top issues to be addressed at the summit and provide recommendations on how to effectively overcome global economic and governance challenges to ensure recovery now and to prevent future crises.
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Thu, 17 Sep 2009 14:00:00 GMT
Event Information:
- September 17, 2009, 2:00 PM to 3:30 PM
On September 17, the Brookings Institution will host Dr. José de Gregorio, governor of the Central Bank of Chile. Governor de Gregorio will outline his views on how best to structure monetary policy and regulatory frameworks in emerging markets to promote macroeconomic and financial stability.
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Wed, 16 Sep 2009 12:30:00 GMT
Event Information:
- September 16, 2009, 12:30 PM to 1:30 PM
The collapse of Lehman Brothers in September 2008, combined with the government takeover of Fannie Mae and Freddie Mac, helped trigger the worst financial crisis in the United States since the Great Depression. In this week’s edition of the Scouting Report, Douglas Elliott—a former investment banker and current fellow at Brookings—answered your questions about the financial crisis and where we stand one year later. Fred Barbash, senior editor at Politico, moderated the discussion.
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Tue, 15 Sep 2009 00:00:00 GMT
On September 15, one year after the Lehman collapse, the Brookings Institution hosted a forum to explore the tumultuous events of last September, where financial markets stand today and the status of regulatory reforms designed to prevent the next financial crisis. Ted Gayer participated in a panel discussion following Fed Chairman Ben Bernanke's keynote address.
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Tue, 15 Sep 2009 10:00:00 GMT
Event Information:
- September 15, 2009, 10:00 AM to 12:00 PM
This week marks the one-year anniversary of Lehman Brothers' collapse. Federal Reserve Chairman Ben Bernanke delivered a keynote about the tumultuous events of last September at a Brookings forum on Tuesday. Brookings Vice President Karen Dynan moderated a panel with other experts on the state of financial markets and regulatory reform.
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Mon, 14 Sep 2009 00:00:00 GMT
One year after investment banking firm Lehman Brothers filed for bankruptcy protection, kicking off a week of massive shifts on Wall Street that was the beginning of the largest financial crisis in recent memory, Douglas Elliott participated in a live online chat to discuss the effect the financial crisis has had on the banking industry.
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Mon, 14 Sep 2009 00:00:00 GMT
A year after the bankruptcy of Lehman Brothers and the ensuing near collapse of the U.S. financial system, Eswar Prasad reflects on what led to these circumstances and urges for coordinated solutions to avoid further global imbalances.
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Thu, 03 Sep 2009 16:50:10 GMT
It’s been one year since Fannie Mae and Freddie Mac had to be taken over by the government to prevent their collapse. Ted Gayer talks about what went wrong and why these government-sponsored enterprises were treated as "too big to fail."
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Thu, 20 Aug 2009 00:00:00 GMT
John L. Thornton, Glenn Hubbard and Hal Scott say that the future of the Federal Reserve as a lender of last resort is in jeopardy. Because the Fed has compromised its economic credibility and political independence during the financial crisis, they argue, the Obama administration should give it full authority to lend against good collateral only but restrict emergency bailout power to the federal Treasury alone.
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Mon, 10 Aug 2009 12:39:31 GMT
Since crashing last October, with a continuing free fall for much of the first part of 2009, the stock market has been gradually climbing back up to healthier levels. Douglas Elliott says the market rally is one sign that the economy is stabilizing – at least in the near term.
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Mon, 27 Jul 2009 11:10:18 GMT
Treasury’s special inspector general issued a blistering report about the $750 billion TARP program, saying it has not been transparent in managing taxpayers’ money and hasn’t required enough disclosure from firms participating in the program. Douglas Elliott says despite the report, the TARP program appears to have prevented a financial meltdown, adding that the economy is showing some small signs of improvement.
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Tue, 21 Jul 2009 00:00:00 GMT
Testifying before the House Financial Services Committee, Alice Rivlin said that financial sector regulators failed to head off the recent crisis because "no one was explicitly charged with spotting the regulatory gaps and perverse incentives that had crept into our rapidly changing financial structure in recent decades." Rivlin outlined regulatory changes that might prevent another catastrophic financial meltdown.
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Tue, 21 Jul 2009 00:00:00 GMT
While the financial crisis slowed the pace of foreign exchange reserve accumulation in late 2008, growth has recently taken off again. China announced its stock of reserves crossed the astounding milestone of $2 trillion this spring. Eswar Prasad and Isaac Sorkin analyze the sources and patterns of reserve accumulation and examine what implications this reserve buildup has for the Chinese and global economies.
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Tue, 23 Jun 2009 08:30:00 GMT
Event Information:
- June 23, 2009, 8:30 AM to 11:00 AM
As banking and financial systems in the United States, Europe, and around the world have been shaken to their foundations over the past two years, Canada’s banking and overall financial system has proven sound and stable. On June 23, Brookings and the Woodrow Wilson Center's Canada Institute will host an examination of Canada’s overall financial system, particularly its approach to financial market regulation, and explore potential lessons for other countries.
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Wed, 17 Jun 2009 00:00:00 GMT
The long-awaited Obama administration plan to reform financial regulation has arrived. The good news, says Douglas Elliott, is that the specific proposals are virtually all sensible and constructive. The bad news is that there were some missed opportunities.
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Wed, 17 Jun 2009 00:00:00 GMT
President Obama’s financial reform proposals are all sensible, necessary reforms. Unfortunately, some bolder steps have been left out due to the expectation of intense opposition from entrenched interests, says Douglas Elliott. He analyzes the administration’s plan, including parts that he believes did not go far enough.
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Tue, 16 Jun 2009 00:00:00 GMT
As the global financial crisis persists, some believe that emerging markets have become less reliant on advanced economies. Eswar Prasad and M. Ayhan Kose examine certain aspects of the decoupling hypothesis to see what they indicate for the future of the global economy.
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Mon, 15 Jun 2009 00:00:00 GMT
The economy is showing signs that it is likely bottoming out and heading toward a weak recovery, but we need to keep our optimism—and our policy actions—in check, argue Martin Baily and Douglas Elliott. Many risks remain for both the banking system and the larger economy, and they argue for increased focus on existing financial rescue plans and the banking sector.
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Tue, 12 May 2009 00:00:00 GMT
All in all, the stress tests were useful and the results were encouraging, says Douglas Elliott. However, we have a lot of pain to get through before this crisis is over. If we're lucky, he says, it will remain bad for awhile. If we're unlucky, it could still get extremely ugly.
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Mon, 11 May 2009 00:00:00 GMT
Although there was good news from the Fed’s recent “stress tests” on the 19 largest banks, it is important to not take excessive comfort from what remains essentially a highly educated guess as to the future of the banks in a very uncertain environment, says Douglas Elliott. While we may well have turned the corner, we can be far from certain that the solvency crisis in banking is over.
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Fri, 08 May 2009 00:00:00 GMT
Doug Elliott analyzes the banking regulator’s stress test results by comparing them with other detailed analyses of the financial state and prospects of the banks, finding that the government's assumptions are more conservative than the IMF's, but less than the pessimists'. But he notes the real stress test will be comfortably surviving 2009 and 2010.
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Fri, 08 May 2009 13:00:00 GMT
Event Information:
- May 08, 2009, 1:00 PM to 2:00 PM
Since the passage of the Emergency Economic Stabilization Act of 2008, officials have struggled to get ahead of the evolving financial crisis. The Initiative on Business and Public Policy at Brookings hosted a conversation with Senator Bob Corker (R-Tenn), a member of the Senate Banking Committee, to discuss the federal response to both the financial crisis and the broader economic downturn.
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Wed, 06 May 2009 00:00:00 GMT
In testimony to the Senate Banking Committee, Martin Baily and Robert Litan discussed the "too big to fail" conundrum, saying large institutions are necessary but must be regulated in a way that at least partially offsets the risks they pose to the rest of the financial system. They also say Congress needs to provide more Treasury TARP funds, maybe on a large scale, but that such a move will ultimately cost less than bank nationalization.
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Mon, 04 May 2009 00:00:00 GMT
The Obama administration has released the long-awaited results of the bank stress tests, saying some have enough capital to weather the recession, while others receive a regulatory blessing. Douglas Elliott says there is some good news, but not to overinterpret until we know the tests’ rigor. The real stress test will be making it through 2009 and 2010 without losing too much money.
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Fri, 24 Apr 2009 11:00:00 GMT
Event Information:
- April 24, 2009, 11:00 AM to 12:00 PM
On April 24, the Brookings Institution and the Andean Development Corporation (CAF) hosted a discussion on the present and future impact of the financial crisis on Latin America.
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Thu, 23 Apr 2009 00:00:00 GMT
The Obama administration and Congress are working rapidly to design a new regulatory architecture for the nation’s financial system. “They might consider taking a page or two from a model next door—Canada,” write Pietro Nivola and John C. Courtney, as they explore why the Canadian banking system remains solvent and solid amid the current global crisis.
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Tue, 21 Apr 2009 00:00:00 GMT
Several prominent economists continue to push for the government to nationalize the nation’s weakest banks before they bleed the Treasury and taxpayers dry. Douglas Elliott says nationalization is risky and costly and therefore should be the last resort, but policymakers need to be ready in case it is needed. He writes a 15-step “survival manual” with suggestions for minimizing the damage from nationalization, especially the costs to taxpayers.
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Mon, 20 Apr 2009 09:00:00 GMT
Event Information:
- April 20, 2009, 9:00 AM to 11:00 AM
Moving the economy toward sustainable long-term economic growth requires a more complete understanding of not only the root causes of the economic crisis, but both how it spread first to the financial sector and then to the real economy. On April 20, Brookings’s Initiative on Business and Public Policy hosted a discussion to explore Wall Street's role in triggering the economic crisis and the role Wall Street leaders may play in leading us out.
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Tue, 14 Apr 2009 00:00:00 GMT
Close political ties between Wall Street and the government played a sizeable role in creating a regulatory environment in which financial institutions became dangerously over-exposed to risk. Wall Street firms whose behavior helped create the world-wide crisis are now working diligently to prevent regulatory changes that can help restore the financial system to long-term health, notes Gary Burtless. However, he disagrees with some observers who say bank nationalization is the answer.
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Tue, 14 Apr 2009 00:00:00 GMT
Barry Bosworth and Aaron Flaaen summarize some research on the origins of the financial crisis and trace the evolution of the credit panic that hit in late 2008, its impact on the real economy, and the extraordinary policy actions that have been taken to mitigate the economic losses.
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Wed, 01 Apr 2009 00:00:00 GMT
On April 2, international leaders, including representatives of regional organizations, will meet in London for the second G-20 Summit. The Chicago Council on Global Affairs and the Managing Global Insecurity project at Brookings have launched a special online forum asking experts and policy-makers from the G-20 nations to submit commentary on what their country hopes to accomplish at the meeting.
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Wed, 01 Apr 2009 00:00:00 GMT
H. Peyton Young shows that the Geithner proposal for pricing toxic assets is a peculiar type of auction in which the taxpayer is cursed by competition among the buyers. The more that investors compete, the lower are the expected returns for the taxpayers. Naturally, the windfall goes to the banks.
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Tue, 31 Mar 2009 09:15:00 GMT
Event Information:
- March 31, 2009, 9:15 AM to 11:30 AM
As public outrage grows over bonuses paid to employees at private firms being bailed out by the government, many are asking whether some companies are "too big to fail" and the consequences of propping up firms at any cost. The Initiative on Business and Public Policy at Brookings hosted Minneapolis Federal Reserve President Gary H. Stern and Vice President Ron J. Feldman to discuss the issue, along with former Federal Reserve Chairman Alan Greenspan.
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Mon, 30 Mar 2009 00:00:00 GMT
Robert Litan discusses the Treasury’s six part plan for significantly reducing systemic risk in the financial system. He says the six elements in the Treasury plan, if enacted into law, should significantly reduce the likelihood of single or multiple failures of systemically important financial institutions in the future, as well as the losses to taxpayers for protecting their creditors.
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Mon, 30 Mar 2009 00:00:00 GMT
The Treasury Department recently released its plan to fix the financial system, which rightly concentrates on reducing systemic risk, argues Robert Litan. While there are legitimate concerns about vesting such large responsibilities with any financial regulator, as long as there are financial institutions whose failure could lead to calamitous financial and economic consequences, then some arm of the federal government must oversee systemic risk and do the best it can to make that oversight work.
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Mon, 30 Mar 2009 11:00:00 GMT
Event Information:
- March 30, 2009, 11:00 AM to 12:30 PM
Leaders of the world’s 20 largest economies, including President Barack Obama, will gather in London on April 2 for summit focused on the global financial crisis. On March 30, Brookings hosted a discussion with leading experts on the critical issues facing the leaders at the G-20 Summit.
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Thu, 26 Mar 2009 09:00:00 GMT
Event Information:
- March 26, 2009, 9:00 AM to 12:20 PM
On March 26, the Center for Northeast Asian Policy Studies and the Initiative on Business and Public Policy at Brookings, in collaboration with Nikkei and the Japan Center for Economic Research, hosted leading Japanese and American experts to discuss Japan's experience and its lessons for the United States.
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Wed, 25 Mar 2009 00:00:00 GMT
A number of prominent observers continue to call for a swift nationalization of the nation’s weakest banks. Douglas Elliott argues that while nationalization would provide an appealing emotional catharsis and has some advantages, the harm would be greater. Nationalization would be costly, difficult and risky. Elliott walks through the initial step of taking over a major banking group and demonstrates the problems that lie therein.
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Mon, 23 Mar 2009 00:00:00 GMT
Treasury Secretary Timothy Geithner’s plan announced on Monday to move some $1 trillion in toxic assets off of the balance sheets of the banks helps remove the uncertainty from the financial system although it will not fix the credit crisis on its own, according to Douglas Elliott. Strong concerns remain about whether the Public Private Investment Program (PPIP) will succeed—the program could either fizzle or prove to be too expensive for the taxpayer—but there are also some grounds for hope.
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Sun, 22 Mar 2009 00:00:00 GMT
Will the global economy again be able to deliver the results we came to expect? Kemal Dervis states recommends four key action areas in order for a relatively quick economic recovery to occur.
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Tue, 17 Mar 2009 00:00:00 GMT
In this article Martin Baily and Douglas Elliott discuss what it will take to stabilize the banks. They call for an adequate amount of capital to be injected into the banks and for the troubled assets be moved out of the banks or their impact neutralized. They agree that both of these actions will be very expensive for the taxpayers, involving significant risk of large future losses, but warn that the costs of stabilizing the banks will be very large indeed, and the sooner policymakers face up to that, the better.
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Tue, 17 Mar 2009 00:00:00 GMT
The current financial crisis and the events that preceded it do not reveal a new problem in capitalism, says Gary Burtless. They do, however, highlight problems that have been obvious to careful observers for many years, and in some cases for centuries. One central problem underscored by the present crisis is the disconnect between the financial interests of senior company managers and the owners of the companies they work for.
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Mon, 16 Mar 2009 00:00:00 GMT
Abdullah Akyüz examines the political economy of Turkey from the domestic crisis of 2001 to the global crisis of 2008 and speculates about the current crisis as well as its implications for the Turkish economy.
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Wed, 11 Mar 2009 00:00:00 GMT
In this CNAPS Visiting Fellow working paper, Haeran Lim explores the effects of democratization on the transformation process of East Asian developmental states, focusing on financial reform in Korea and Taiwan after the Asian financial crisis of 1997-1998. Despite their similarities, Korea and Taiwan have taken different paths of reform, which resulted in different outcomes.
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Wed, 11 Mar 2009 12:30:00 GMT
Event Information:
- March 11, 2009, 12:30 PM to 01:30 PM
Traditionally, according to economists, when the U.S. economy catches a cold, the Mexican economy catches pneumonia. Brookings expert Leonardo Martinez-Diaz and Senior Politico Editor Fred Barbash examined the problems plaguing the Mexican economy and potential policy solutions in an onlin chat.
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Tue, 10 Mar 2009 00:00:00 GMT
What would help governments move beyond short-term solutions to the financial crisis and towards efforts to regain global financial stability? Eswar Prasad proposes creating an insurance pool for the Group of 20 largest economies in order to reduce incentives for reserve buildups and help focus policymakers on the international consequences of domestic actions.
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Thu, 05 Mar 2009 00:00:00 GMT
Almost all of the G-20 countries have agreed to some type of fiscal stimulus plan to get their economies back on track but how strong are the plans and what measures are included? Eswar Prasad and Isaac Sorkin analyze the G-20 stimulus plans in detail in new research.
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Wed, 04 Mar 2009 00:00:00 GMT
With large and ongoing government bailouts of AIG, Robert Litan says that any reform of the nation’s financial system should include an update to the nation’s antiquated system of state insurance regulation. He believes that given the taxpayer exposure to the potential failure of large insurers—or those deemed to be “systemically important”—it is time that the federal government oversee all aspects of these operations to assure their continued solvency.
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Tue, 03 Mar 2009 00:00:00 GMT
At a Brookings Institution discussion that featured IMF managing director Dominique Strauss-Kahn, Mauricio Cárdenas spoke on how the global financial crisis has impacted Latin America and addressed stimulus plans and challenges.
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Tue, 03 Mar 2009 00:00:00 GMT
The administration’s new “stress tests” for the 19 largest banks will likely result in substantial new infusions of government money to bolster their capital. Douglas Elliott explains what “capital” is; how to measure whether a bank has enough of it; and what the stress test and capital proposals are. He applauds these actions as “right on virtually all counts.”
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Mon, 02 Mar 2009 00:00:00 GMT
In April, leaders of the G-20 Summit will gather in London for a second meeting. In the March edition of The World Today, Colin Bradford discusses challenges they will face and how to make this governance mechanism work for the good of the international community.
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Sat, 28 Feb 2009 00:00:00 GMT
In a new opinion article, Erik Berglöf makes recommendations to EU leaders on how to stave off a further deepening of the financial crisis in the emerging economies of Eastern Europe, addressing capital demands and the role of banks.
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Wed, 25 Feb 2009 00:00:00 GMT
Bank nationalization—the topic du jour in Washington and on Wall Street—means different things to different people. Although nationalization is a serious and extreme step with high social and financial costs, Douglas Elliott believes full nationalization may be needed only as a last resort for one or two of the nation’s larger banks, with more widespread nationalization unlikely. But, he says, it may make sense for the government to partially nationalize additional large banks now, in an effort to bring some certainty to the markets.
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Fri, 20 Feb 2009 10:20:10 GMT
As policymakers and the public have been focused on the stimulus and the bank bailout, there remain tough policy questions about how to get at the root cause of the current economic problems – how to fix the financial system for the long-term. Director of the Initiative on Business and Public Policy Martin Baily discusses Fixing Finance: A Roadmap for Reform, laying out the long-term issues.
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Fri, 20 Feb 2009 00:00:00 GMT
Critical decisions need to be made soon on the administration’s plan to create a public/private partnership to buy “toxic assets” from banks, including what the proper financial role of the taxpayer should be. Douglas Elliott argues that practical imperatives will push the government principally into the role of providing cheap financing and issuing guarantees of floor values for the securities, with little emphasis on buying assets directly as a co-investor. He believes the public should take the guarantor role, because it minimizes the potential downside for the taxpayer, although he acknowledges this is a subjective call based on tolerance for risk.
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Thu, 19 Feb 2009 00:00:00 GMT
President Obama hosted a Fiscal Responsibility Summit on Monday and set a goal of cutting the federal budget deficit in half by the end of his term. William Gale and Alan Auerbach analyze the long-term fiscal outlook. Under what they view as optimistic assumptions, they project the deficit to average at least $1 trillion per year for the 10 years after 2009 – even if the economy returns to full employment and the stimulus package is allowed to expire in two years. They say the longer-run picture is even bleaker. Although fiscal policy problems are usually described as medium- and long-term issues, they find that the future may be upon us much sooner than expected.
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Tue, 17 Feb 2009 00:00:00 GMT
Given the jerky path of the bailout efforts by two administrations over the past 18 months, it isn’t surprising others would want a crack. Robert Litan and Martin Baily say the teetering U.S. regulatory system is the place to start fixing. The Wall Street Journal talked with Litan to find out why the stimulus should start with regulators.
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Tue, 17 Feb 2009 14:32:20 GMT
As President Obama signs the much anticipated stimulus package into law, William Gale, vice president and director of Economic Studies at Brookings, says the economy will likely respond as anticipated. But, Gale says, one of the critical elements for the nation’s economic solvency is to ensure that there’s an end in sight for this unprecedented spending bill.
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Mon, 16 Feb 2009 00:00:00 GMT
As policy-makers and the public have been focused on the stimulus and the bank bailout, tough policy questions about how to get at the root cause of the current economic problems remain—how to fix the financial system for the long-term. Martin Baily and Robert Litan lay out a roadmap for reform, one that harnesses the forces of market discipline that were ignored in the run-up to the current crisis, which they say can and must be retained after the need for massive short-run government intervention has passed.
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Thu, 12 Feb 2009 00:00:00 GMT
The Obama administration won a hard-fought and much needed victory this week as U.S. lawmakers prepare to pass a $789 billion stimulus package to revive the struggling economy. But as Bill Galston cautions, the compromise reached by congressional negotiators—which cut items dear to liberals and the business community, and included less for states than the House and administration wanted—is hardly sufficient to inspire public confidence in government and fix the economy.
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Thu, 12 Feb 2009 08:30:00 GMT
Event Information:
- February 12, 2009, 8:30 AM to 12:45 PM
Hedge funds—loosely regulated and largely private investment vehicles—played a significant role in the origins of the financial crisis. Reporting their worst losses ever in 2008, and playing a part in Bernard Madoff's searing Ponzi-scheme scandal, hedge funds are now under intense scrutiny. On February 12, Brookings hosted a forum to explore the role of hedge funds in the ongoing financial crisis, as well as their uncertain future in the evolving regulatory environment. Senator Jack Reed, Senior Fellows Martin Baily and Peyton Young and other experts offered remarks.
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Wed, 11 Feb 2009 00:00:00 GMT
As the effects of the financial crisis continue to be felt across the globe, much of Latin America should be well prepared to weather the global financial storms with more opportunity for growth. In a speech at the Economist's 11th Annual Conference on Latin America Private Equity, held in Miami Florida, Mauricio Cárdenas discusses how the United States and Latin American countries can work together, not only on financing and aid, but also on issues like trade, migration, energy, and climate change.
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Wed, 11 Feb 2009 00:00:00 GMT
Treasury Secretary Timothy Geithner’s $2.5 trillion bailout plan would create a public-private fund to buy up hard-to-sell assets from banks, inject more capital into banks and use Treasury and Fed money to finance up to $1 trillion in assets backed by consumer, auto and small business loans. Is this plan sufficient? Will it stabilize the financial system? Doug Elliott and other experts discuss these questions in a op-ed piece in the New York Times.
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Tue, 10 Feb 2009 00:00:00 GMT
Doug Elliott critiques the Obama administration’s new rescue plan for the banking sector announced on February 10, saying he agrees on the need for significant new capital injections, despite their political unpopularity, but argues that it is not at all clear that the proposed “bad bank” could be designed in a way that would make it better than simply guaranteeing toxic assets on the books of the banks. Elliott writes that the devil will indeed be in the details of the construction of the bad bank and the pricing mechanisms.
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Tue, 10 Feb 2009 08:00:00 GMT
Event Information:
- February 10, 2009, 8:00 AM to 10:00 AM
President Obama's summit on fiscal responsibility is an attempt to focus the nation on the need to rein in spending, tackle our growing deficits, and plan a sound financial future for the nation. A group of budget experts from Brookings, the Heritage Foundation and other public policy think tanks gathered February 10 to discuss options for fiscal responsibility, while acknowledging the need to provide short-term stimulus to a faltering economy.
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Mon, 09 Feb 2009 00:00:00 GMT
The final House-Senate compromise on the economic recovery package offers no boost for HUD’s Neighborhood Stabilization Program, established last year to help state and local governments mitigate the impact of foreclosures. Alan Berube and Alan Mallach argue that additional funds for the program (part of the House proposal omitted in the final bill) would provide much-needed assistance to local communities.
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Fri, 06 Feb 2009 13:20:50 GMT
As President Obama and Congress continue to consider how to jumpstart the economy, Fellow Douglas Elliott says that the plan must include dealing with the financial industry overall, its toxic assets as well as policies that work for consumers and businesses alike.
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Tue, 03 Feb 2009 00:00:00 GMT
The wave of home mortgage foreclosures that began in 2006 continues to surge, greatly destabilizing neighborhoods, towns, and cities across the United States. However, the federal government has played a limited role to date in blunting its effects. This Blueprint policy brief argues for carefully-targeted federal policies to assist states and localities in mitigating the community-level impacts of foreclosure, and creating the conditions for ultimate housing market recovery.
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Fri, 30 Jan 2009 00:00:00 GMT
‘Buy American’ provisions may provide job security to some, but Brookings Nonresident Senior Fellow Nayan Chanda says protectionism will stunt global trade. Chanda urges world leaders to stay calm in the face of a raging storm, while trying to stimulate the economy without triggering a new wave of protectionism.
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Thu, 29 Jan 2009 00:00:00 GMT
Following the International Monetary Fund’s release of an updated global growth forecast, the Economist.com featured the IMF's chief economist, Oliver Blanchard, as he commented in their Economics focus column. This “Blanchard roundtable”, a weeks worth of commentary by correspondents and outside experts, featured a response by Brookings scholar Eswar Prasad. Prasad argues that improving the public perception of the market holds similar importance to enacting new fiscal policy.
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Thu, 29 Jan 2009 00:00:00 GMT
The new administration and Congress soon will be debating how to spend the TARP’s second $350 billion—and possibly even more—to stabilize the financial system. Douglas J. Elliott explains three approaches: establishing a “bad bank”; guaranteeing toxic assets; and nationalizing one or more banks, and recommends the “least bad option”—a combination of toxic asset guarantees and a mild form of nationalization.
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Thu, 29 Jan 2009 00:00:00 GMT
The Obama administration seeks to promote three goals through the stimulus package: jump-start an immediate surge in consumer demand and job creation; make a down-payment on longer-term campaign promises; and initiate a new era of bipartisanship. However, writes William Galston, due to the bill's divided focus, its stimulative effects may prove too weak to halt or reverse more than a fraction of the job losses predicted for the next two years.
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Thu, 29 Jan 2009 00:00:00 GMT
Originally thought to be immune to effects from the U.S. economic slowdown, many emerging economies have been hard hit. However, India has escaped the worst of the financial crisis, but how long can it last? In an article in Foreign Policy Magazine, Arvind Panagariya examines ways in which the Indian economy has not remained entirely immune to the tremors in the world economy.
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Wed, 28 Jan 2009 00:00:00 GMT
What is to blame for the global financial crisis? In new commentary, Eswar Prasad dissects the role global macroeconomic imbalances and other drivers might have played in precipitating the crisis and offers solutions for building future global economic stability.
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Tue, 27 Jan 2009 00:00:00 GMT
In congressional testimony, Alice Rivlin discusses the stimulus bill and the next steps required to get the economy back on track. Before the current crisis, she argues, Americans were consuming and borrowing too much, while saving too little. If recovery from this recession is to be solid and sustainable, we must transform ourselves into a society that consumes less, saves more and finances a larger fraction of its investment with domestic saving, rather than foreign borrowing.
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Fri, 23 Jan 2009 00:00:00 GMT
The Treasury’s Troubled Asset Relief Program (TARP) has been widely described as a “$700 billion bailout” but Douglas Elliott points out that it will cost a lot less in reality. A recent CBO report suggests the actual cost may only be a quarter of the amount committed. We must use accurate cost estimates, using methods like CBO’s, to make the best decisions about the commitment to save our financial system, which programs are funded, and how we execute the rescues.
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Thu, 22 Jan 2009 00:00:00 GMT
What is the forecast for Latin American economies in 2009? Brookings Fellow Mauricio Cardenas and Arturo Galindo of the Inter-American Development Bank explain why the Latin America economic outlook for 2009 does not appear particularly grim—and even offers the prospect of limited but continued growth—despite the sharp recession in the U.S., a key influencer on the region's economic growth patterns.
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Wed, 21 Jan 2009 00:00:00 GMT
There is a vast empirical literature analyzing the impact of financial openness on economic growth but far less attention has been paid to its effects on productivity growth. This is surprising given the strong evidence that productivity growth is the main driver of long-term economic growth. In a new working paper, Eswar Prasad, along with M. Ayhan Kose and Marco E. Terrones, argues that financial openness in fact has a positive impact on productivity growth, although the effects are subtle.
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Wed, 21 Jan 2009 11:00:00 GMT
Event Information:
- January 21, 2009, 11:00 AM to 12:30 PM
In spite of the challenges posed by poverty and high levels of inequality in Latin America, studies show its people are generally happy and continue to support market reforms and democracy. Yet, in the midst of the global financial crisis, will this trend shift in Latin America? On January 21, the Latin America Initiative at Brookings hosted a discussion on the current trends in the region in terms of economic growth, inflation, unemployment and the financial crisis, based on the most recent evaluations from a new approach in economics: the economics of happiness.
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Fri, 09 Jan 2009 00:00:00 GMT
America faces a profoundly altered financial landscape and a rapidly shifting world economic order. To meet the challenges of maintaining strong domestic economic growth and restoring global financial stability, we need a national agenda that tackles a broad range of domestic economic policy issues and promotes constructive engagement with the global economy.
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Thu, 08 Jan 2009 00:00:00 GMT
President-elect Barack Obama's economic recovery plan may face significant resistance in Congress. Thomas Mann and Norman Ornstein joined Margaret Warner on the NewsHour with Jim Lehrer to discuss the hurdles the Obama proposal will likely encounter as he pushes his agenda on Capitol Hill.
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Thu, 08 Jan 2009 13:30:00 GMT
Event Information:
- January 08, 2009, 1:30 PM to 3:00 PM
On January 8, the Brookings Institution hosted Assistant Secretary of the Treasury Neel Kashkari for an update on recent actions related to the Treasury Department’s $700 billion financial stability program. Full event audio is available for download.
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Wed, 07 Jan 2009 00:00:00 GMT
Eighty years ago, a depression changed the way we think about poverty. It took decades for the world to recover and to remember that if people are given freedom, they will prosper. In an article in Foreign Policy Magazine, William Easterly reflects on lasting consequences of the original approach of "development economics" and cautions against returning to misguided plans to fight poverty.
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Tue, 06 Jan 2009 00:00:00 GMT
As rumors about Kim Jong-il’s health focus attention on the future of the Korean peninsula, CNAPS Nonresident Fellow Yeongseop Rhee examines issues in South-North monetary integration, a vital aspect of unification. The success – or failure – of monetary integration will have major effects on the peninsular economy, the standard of living in the North, and the South’s appetite for unification.
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Tue, 06 Jan 2009 00:00:00 GMT
With the rise in oil prices and a conservative fiscal policy, Russia turned from a debtor nation into an economic powerhouse. Putin’s strategy created a compromise between the excesses of the free market and the inefficiencies of a command economy. Yet there remain deep cracks in the foundation of the post-Soviet structure. In a recent article in The National Interest, Clifford Gaddy and Barry Ickes discuss whether or not his Putinomics can survive the financial crisis.
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Mon, 05 Jan 2009 00:00:00 GMT
There is a vast empirical literature analyzing the impact of financial openness on economic growth but far less attention has been paid to its effects on productivity growth. This is surprising given the strong evidence that productivity growth is the main driver of long-term economic growth. In this new commentary, Brookings fellow Eswar Prasad, along with M. Ayhan Kose and Marco E. Terrones, argues that financial openness in fact has a positive impact on productivity growth, although the effects are subtle.
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Wed, 31 Dec 2008 00:00:00 GMT
2007-2008 Federal Executive Fellow Jeffrey Haymond writes that the probability a currency attack on the dollar is low but plausible and potentially devastating. Haymond addresses how such an attack might be carried out and what can be done to prevent it.
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Tue, 30 Dec 2008 00:00:00 GMT
In China, the household savings rate rose by 7 percent from 1995 to 2005, reflecting savings of about one quarter of disposable income. Why are Chinese households saving so much across all demographic groups? In a new paper, Eswar Prasad and Marcos Chamon analyze the savings patterns of households in China and discuss the economic drivers.
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Wed, 24 Dec 2008 11:54:50 GMT
Despite the Fed’s historic actions, the economy is still ailing. Barry Bosworth says fiscal policy needs to be the next step: expenditures are important, with tax cuts being the quickest way to stimulate the economy.
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Wed, 24 Dec 2008 12:12:14 GMT
Brookings Guest Scholar Bill Frenzel, a former Member of Congress, says federal legislators should tread carefully when considering bailing out failing businesses.
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Wed, 17 Dec 2008 00:00:00 GMT
Based on the 2008 working paper, "The Hedge Fund Game," Peyton Young and co-author Dean P. Foster show how surprisingly easy it is for unskilled managers to create “fake” alpha, mimicking the returns of their more skilled and scrupulous peers. The only way to protect the industry, the authors argue, is through greater transparency.
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Thu, 11 Dec 2008 00:00:00 GMT
The economy is the number one concern in the minds of main street Americans. The $700 billion bailout package was aimed at rebuilding financial institutions, but it is now up to the new president to restore confidence in consumers and workers.
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Thu, 11 Dec 2008 10:00:00 GMT
Event Information:
- December 11, 2008, 10:00 AM to 11:30 AM
On December 11, Brookings hosted the sixth of 12 events to provide timely policy recommendations and political advice to the incoming president and his transition team. Brookings Senior Fellow Martin Baily offered policy solutions and priorities for the president-elect on the financial meltdown and the struggling housing market.