Hutchins Roundup: Unconditional cash transfers, countercyclical capital buffers, and more
- February 6, 2020
- Gary Richardson, economics, Brookings Institution, Feb. 6, 2020
Christoffer Koch of the Federal Reserve Bank of Dallas, [Economics Professor] Gary Richardson of the University of California, Irvine, and Patrick Van Horn of Scripps College find that during the run-up to the banking crisis in 1929, systemically important banks built capital buffers of 3 to 5 percent of assets in preparation for the bust that they believed would follow. This helped these banks survive the depression of the 1930s. In contrast, during the run-up to the 2007 crisis, systemically important banks kept their capital ratios at the regulatory minimum because they expected the government to rescue them in a crisis.
Related News Items
- If the Fed's nominees were confirmed, could they change monetary policy?
- The Fed is throwing money around. Not everyone is reaping the benefits
- Small-business loans: Strip clubs, marijuana stores need not apply
- 3 lessons for today's economy from former Fed chair Paul Volcker's long and storied career
- Markets are betting that good things come in threes--especially rate cuts