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Daily Archives: May 16, 2012

Designating Systemically Important Financial Institutions: Balancing Costs and Benefits

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Designating Systemically Important Financial Institutions: Balancing Costs and Benefits, Testimony before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Douglas J. Elliott, Fellow in Economic Studies, the Brookings Institution

  • “In Dodd-Frank, Congress wisely gave regulators a wider mandate to oversee systemically important financial institutions (SIFIs). These institutions are the ones most capable of triggering financial crises through mistakes or bad luck, due to their importance as financial intermediaries and their interconnections with the rest of the financial system. As such, they merit more attention from regulators, more tools should be available for regulatory intervention, and they should be held to a somewhat higher standard of financial conservatism. The need for closer supervision is not erased by the steps that have been taken to reduce the potential for government bailouts of failing institutions. First, because it is impossible to totally eliminate the potential for a financial crisis to be severe enough to merit further taxpayer-financed rescues. Second, because even if this goal were achieved, so that creditors and shareholders picked up all the losses with no help from taxpayers, a serious financial crisis would still lead to a severe contraction of credit, sending the economy into a deep recession, such as we just experienced. You will recall that the recent recession cost taxpayers far more than did the bailouts. Banks are among the most likely institutions to be systemically significant, but other types of financial institutions can certainly be SIFIs and it is good that Dodd-Frank recognized this. Prior to this legislation, it was very difficult for the regulators to track the systemic risk of non-bank financial institutions, much less affect the level of that risk. Robert Litan and I wrote an extensive paper on non-bank SIFIs, to which I refer the members for a fuller explanation of my views. Today’s testimony will focus on a few key beliefs about how to identify and regulate non-bank SIFIs and some thoughts on the proposed regulations.”

    • Transamerica Center for Retirement Studies – 13th Annual Retirement

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    News release: “American workers, shaken by the realities of the Great Recession, have adjusted their visions of retirement according to the 13th Annual Transamerica Retirement Survey released today by the non‐profit Transamerica Center for Retirement Studies ® (“The Center”). The Center surveyed more than 3,600 American workers and found that the majority of workers plan… Continue Reading

    Google Introduces Introducing the Knowledge Graph

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    Google Official Blog: “The Knowledge Graph enables you to search for things, people or places that Google knows about—landmarks, celebrities, cities, sports teams, buildings, geographical features, movies, celestial objects, works of art and more—and instantly get information that’s relevant to your query. This is a critical first step towards building the next generation of search,… Continue Reading

    Treasury – How Refinancing Can Help Families

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    “Today, millions of Americans who are current on their mortgage payments cannot refinance at historically-low interest rates. The President is proposing legislation that would allow more homeowners to refinance. Under the President’s plan, they would have two refinancing options. Check out what those options are in this infographic, by Jenni LeCompte Related postings on the… Continue Reading

    A Future Without Key Social and Economic Statistics for the Country

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    United States Census Directors Blog: “Our country faces important Federal funding challenges linked to the current recession and its aftermath. On the Census Bureau’s part, we have been striving to cut administrative costs, reengineer our survey processes, and find innovative ways to squeeze every cent of taxpayer money we get…It is also my duty to… Continue Reading

    CRS – Medicare: History of Insolvency Projections

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    Medicare: History of Insolvency Projections, Patricia A. Davis, Specialist in Health Care Financing. May 11, 2012. By the same author, see also Medicare Financing, May 11, 2012 “Medicare is the nation’s health insurance program for persons age 65 and older and certain disabled persons. Medicare consists of four distinct parts: Part A (Hospital Insurance, or… Continue Reading

    NY Fed: Shadow Banking Regulation

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    Shadow Banking Regulation. Tobias Adrian and Adam B. Ashcraft, April 2012, Number 559 “Shadow banks conduct credit intermediation without direct, explicit access to public sources of liquidity and credit guarantees. Shadow banks contributed to the credit boom in the early 2000s and collapsed during the financial crisis of 2007-09. We review the rapidly growing literature… Continue Reading

    Airport Insecurity: TSA’s Failure to Cost-Effectively Procure, Deploy and Warehouse its Screening Technologies

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    Airport Insecurity: TSA’s Failure to Cost-Effectively Procure, Deploy and Warehouse its Screening Technologies – Joint Majority Staff Report, 112th Congress – May 9, 2012 “This report is a critical examination and analysis of TSA’s procurement, deployment, and storage of screening technologies. During the past ten years, TSA has struggled to cost-effectively utilize taxpayer funding to… Continue Reading