The incoming Financial Stability Oversight Council will face an extraordinary challenge:  a large and growing shortage of market liquidity that has necessitated unprecedented government intervention in fixed-income capital markets, and threatens to undermine the future vitality of those markets.   U.S. regulators confronted a similar problem in the wake of the 2008-09 Global Financial Crisis, with surprising …

When the Federal Reserve Board approved the original 2 percent flat enhanced supplementary leverage ratio (eSLR) buffer applicable to the U.S. global systemically important banks (GSIBs) at an open meeting on April 8, 2014, several Board members expressed concern about the unintended consequences of a binding leverage ratio. Namely, a binding leverage ratio reduces the …

The federal government’s Paycheck Protection Program (PPP), originally authorized by the CARES Act to support small businesses and their employees through the economic disruptions of the COVID-19 pandemic, was reopened in January 2021 under the new Administration. The renewed PPP included added flexibilities, such as allowing certain prior borrowers to apply for a second loan.  On Feb. …

On March 1, BPI Senior Fellow Pat Parkinson participated in a Macro Musings podcast episode hosted by David Beckworth from the Mercatus Center. The podcast featured a discussion about treasury market meltdowns in March 2020 and how to avoid similar problems in the future. Click here to access the original podcast by the Mercatus Center.

Stories Driving the Week Op-Ed: Streamline Bank Rules for Spotting Sanctions Violators “Check the box” compliance practices are hampering bank efforts to enforce economic sanctions, BPI President and CEO Greg Baer wrote on Feb. 26 in an American Banker op-ed. Incoming Treasury Department officials need to reassume control over the sanctions regime and implement a …