Presenter: Toni Whited Affiliation: University of Michigan, Ross School of Business. Paper: Bank Market Power and Monetary Policy Transmission: Evidence from a Structural Estimation (Journal of Finance, forthcoming). Date: January 4, 2022 Time: 13:00 GMT Abstract: We quantify the impact of bank market power on monetary policy transmission through banks to borrowers. We estimate a … Read more
Before the 2008 crisis, the cross-sectional skewness of banks’ leverage went up and macro risk concentrated in the balance sheets of large banks. Using a model of profit-maximizing banks with heterogeneous Value-at-Risk constraints, we extract the distribution of banks’ risk-taking parameters from balance sheet data. The time series of these estimates allow us to understand systemic risk and its concentration in the banking sector over time. Counterfactual exercises show that (1) monetary policymakers confront the trade-off between stimulating the economy and financial stability, and (2) macroprudential policies can be effective tools to increase financial stability.
Presenter: Saki Bigio Affiliation: University of California, Los Angeles, Department of Economics. Paper: A Model of Credit, Money, Interest, and Prices Date: October 05, 2021 Time: 15:00 IDT (GMT+3) Abstract: This paper integrates a realistic implementation of monetary policy through the banking system into an incomplete-market economy with wage rigidity. Monetary policy sets policy rates … Read more