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Does Bank Monitoring Affect Loan Repayment?
Nicola Branzoli and Fulvia Fringuellotti Banks monitor borrowers after originating loans to reduce moral hazard and prevent loan losses. While monitoring represents an important activity of bank...
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Can Decentralized Finance Provide More Protection for Crypto Investors?
Agostino Capponi, Nathan Kaplan, and Asani Sarkar Several centralized crypto entities failed in 2022, resulting in the cascading failure of other crypto firms and raising questions about the protection...
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Bank Profits and Shareholder Payouts: The Repurchases Cycle
Beverly Hirtle and Sarah Zebar During the height of the COVID-19 pandemic, the Federal Reserve placed restrictions on large banks’ dividends and share repurchases. These restrictions were intended to...
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How the LIBOR Transition Affects the Supply of Revolving Credit
Harry Cooperman, Darrell Duffie, Alena-Kang Landsberg, Stephan Luck, Zachry Wang, and Yilin (David) Yang In the United States, most commercial and industrial (C&I) lending takes the form of...
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Insights from Newly Digitized Banking Data, 1867‑1904
Stephan Luck and Sergio Correia Call reports—regulatory filings in which commercial banks report their assets, liabilities, income, and other information—are one of the most-used data sources in...
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How Do Interest Rates (and Depositors) Impact Measures of Bank Value?
Stephan Luck, Matthew Plosser, and Josh Younger The rapid rise in interest rates across the yield curve has increased the broader public’s interest in the exposure embedded in bank balance sheets and...
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Enhancing Monitoring of NBFI Exposure: The Case of Open‑End Funds
Nicola Cetorelli and Debashish Sarkar Non-bank financial institutions (NBFIs) have grown steadily over the last two decades, becoming important providers of financial intermediation services. As NBFIs...
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CRISK: Measuring the Climate Risk Exposure of the Financial System
Hyeyoon Jung A growing number of climate-related policies have been adopted globally in the past thirty years (see chart below). The risk to economic activity from changes in policies in response to...
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Bank Funding during the Current Monetary Policy Tightening Cycle
Stephan Luck, Matthew Plosser, and Josh Younger Recent events have highlighted the importance of understanding the distribution and composition of funding across banks. Market participants have been...
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Banks Runs and Information
By Haelim Anderson and Adam Copeland The collapse of Silicon Valley Bank (SVB) and Signature Bank (SB) has raised questions about the fragility of the banking system. One striking aspect of these bank...
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Banks’ Balance‑Sheet Costs and ON RRP Investment
Gara Afonso, Marco Cipriani, Catherine Huang, and Gabriele La Spada Daily investment at the Federal Reserve’s Overnight Reverse Repo (ON RRP) facility increased from a few billion dollars in March...
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2023 State‑of‑the‑Field Conference on Cyber Risk to Financial Stability
Nitansha Bansal, Jason Healey, Anna Kovner, Michael Lee, Patricia Mosser, and Virpratap Vikram Singh The Federal Reserve Bank of New York and Columbia University’s School of International and Public...
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2nd Annual International Roles of the U.S. Dollar Conference
Alain Chaboud, Ricardo Correa, Patrick Douglass, Linda S. Goldberg, Juan M. Londono, and Fabiola Ravazzolo The U.S. dollar plays a central role in the global economy. In addition to being the most...
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How Exposed Are U.S. Banks’ Loan Portfolios to Climate Transition Risks?
Hyeyoon Jung, João A.C. Santos, and Lee Seltzer Editor’s note: Since this post was first published, the y-axis labels in the first four charts have been corrected. July 10, 12:30 p.m. Much of the work...
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Banking System Vulnerability: 2023 Update
Matteo Crosignani, Thomas Eisenbach, and Fulvia Fringuellotti The bank failures that occurred in March 2023 highlighted how unrealized losses on securities can make banks vulnerable to a sudden loss of...
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Learning by Bouncing: Overdraft Experience and Salience
Donald P. Morgan and Wilbert van der Klaauw Overdraft credit, when banks and credit unions allow customers to spend more than their checking account holds, has many critics. One fundamental concern is...
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Physical Climate Risk and Insurers
Hyeyoon Jung, Robert Engle, Shan Ge, and Xuran Zeng As the frequency and severity of natural disasters increase with climate change, insurance—the main tool for households and businesses to hedge...
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Internal Liquidity’s Value in a Financial Crisis
Cecilia Caglio and Adam Copeland A classic question for U.S. financial firms is whether to organize themselves as entities that are affiliated with a bank-holding company (BHC). This affiliation brings...
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A Retrospective on the Life Insurance Sector after the Failure of Silicon...
Fulvia Fringuellotti and Saketh Prazad Following the Silicon Valley Bank collapse, the stock prices of U.S banks fell amid concerns about the exposure of the banking sector to interest rate risk. Thus,...
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Can I Speak to Your Supervisor? The Importance of Bank Supervision
Beverly Hirtle and Anna Kovner In March of 2023, the U.S. banking industry experienced a period of significant turmoil involving runs on several banks and heightened concerns about contagion. While...
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