After the injection of capital announced by Mario Draghi, President of the European Central Bank (ECB), I stopped to reexamine what I knew about monetary policy and what I believe I know now. What conclusion did I reach? At first I thought, “This is not the monetary policy that I studied and have taught for […]
Securitization Makes a Come Back: Haven’t We Learned from the Crisis?
Even after having been identified as one of the culprits of the 2007-2008 financial crisis, securitization is making a come back, with support of some central bank officials. Why? Securitization refers to the pooling and repackaging of assets in securities with claims on the cash flows generated by the asset. The final product of such […]
Financial Crisis: Can “It” Happen Again?
“Can ‘It’ Happen Again?” Such was the title of a well-known paper written by economist Hyman Minsky in 1982. “It” referred to financial crises. His answer at the time was in the affirmative. And so it remains today. The crisis that started in August 2007 has affected economies in different ways and in different degrees. […]
The Volcker Rule
Finally the Volker rule is in place. The five U.S. financial regulatory agencies – yes five: the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Commodity Futures Trading Commission – agreed on the rule to […]
What’s Going On with the Spanish and European Banking System?
The other day, a reporter asked me three questions about the current state of Spanish and European banking. Among all the areas of economic analysis, I find monetary economics and banking most interesting. In 1992, together with three coauthors, I published one of the first articles about general equilibrium economics that had the word “banking” […]
