Cryptocurrencies such as Tether, which is pegged to the dollar, have held on as others crashed. But according to new research by Yale SOM’s Gary Gorton, these “stablecoins” still pose major risks to the global financial system.
Yale’s Sigrídur Benediktsdottir and Greg Feldberg recently led an in-depth assessment of the UK’s systemic risk oversight as part of the IMF’s Financial Sector Assessment Program. They came away with new insights into one of the world’s leading models for managing financial system risk.
“Inside the CDO Machine,” a special project from the Yale Program on Financial Stability, explores the first-hand perspectives of market participants.
According to Prof. Andrew Metrick, new rules on banks have helped push risk to non-bank firms that aren’t subject to the same limitations. In a recent paper, Metrick and former Fed governor Daniel Tarullo propose ways to bring regulation of banks and this “shadow banking system” into better alignment.
A new study co-authored by Prof. Song Ma finds that during the financial crisis, private equity firms took on banks in poor health that other buyers didn’t want, and those banks performed relatively well under their new management.
Yale SOM’s June Rhee discusses how the lessons of the global financial crisis prepared policymakers for COVID, and what tools they’ll need for future crises.
Dollar-pegged cryptocurrencies are rapidly proliferating. But without regulation, these so-called stablecoins pose serious risks to the U.S. financial system, argue Yale SOM’s Gary B. Gorton and his co-author.
During financial crises, stocks tend to fall together more than they should. A new study co-authored by Yale SOM’s Heather Tookes suggests that margin trading plays a substantial role in driving this downward spiral.
Central banks should consider bona fide debt monetization—money-printing—to help their governments cover some of the costs of the pandemic, argue Greg Feldberg of the Yale Program on Financial Stability and Aidan Lawson, a former YPFS research associate.
In a conversation with Yale SOM’s Andrew Metrick, Paul Tucker, chair of the Systemic Risk Council and former deputy governor for financial stability at the Bank of England, says that financial markets are still facing serious stability risks.
In a recent online conversation hosted by Yale SOM, Mexico’s chief central banker discussed the country’s response to the economic distress caused by COVID-19—the country’s third financial crisis in recent decades.