The Center for Financial Innovation and Stability's series, Notes from the Vault

Financing the Fed's Balance Sheet: Implications for the Treasury
Larry D. Wall
December 2015

The public discussion of the Federal Reserve's balance sheet has been focused on the asset side. This post provides a primer on liabilities and equity accounts, with an emphasis on the implication of funding alternatives for the Treasury's financial condition.

The Role of Liquidity in the Financial System
Larry D. Wall
November 2015

Several key moments in the financial crisis were marked by liquidity problems. Yet our understanding of liquidity is such that "we do not even know what to argue about." The Atlanta Fed recently held a conference to improve our understanding of liquidity in the financial system.

Using Market Information for Fail-Safe Supervisory Triggers
Larry D. Wall
October 2015

The use of market information to trigger supervisory intervention has been proposed as a way of alleviating concerns about supervisory forbearance. This post discusses potential problems with using market information and methods to mitigate those problems.

Marketplace Lending's Role in the Consumer Credit Market
W. Scott Frame
September 2015

Peer-to-peer lenders have evolved into what can more accurately be called marketplace lenders. This post discusses the business models of two of the largest marketplace lenders and compares their operations to banks' more traditional consumer lending operations.

Large, Complex Financial Regulation
Larry D. Wall
August 2015

A common complaint about the Dodd-Frank Act is that it is too long and creates so many new legal requirements. This post offers a theory on why financial regulatory legislation tends to be lengthy, and it draws implications for development of financial regulatory policy.

Breaking Down Geographic Barriers on Banks: U.S. and EU Recent Experiences
Maria J. Nieto and Larry D. Wall
July 2015

The integration of a banking system across state boundaries impacts the bank system's soundness and efficiency. This post discusses progress towards such integration in the United States and European Union and how that progress affected their respective responses to the financial crisis.

Liquidity Backstops and Dynamic Debt Runs
Bin Wei and Vivian Yue
June 2015

Two similar types of municipal debt had very different outcomes during the crisis based on whether they had a liquidity backstop. This article explains these differences and discusses their implications for shadow banks.

Lessons for E-Money from the U.S. Experience with Bank Notes
Warren E. Weber
May 2015

Private banks issued the majority of the currency in the United States prior to 1933. This post draws on that experience to develop some implications for government policy regarding e-money.

Who Will Be Central to the Financial System?
Larry D. Wall
April 2015

Will commercial banks remain central to the financial system? If banks become less important, should macroprudential policy focus on shadow banks? This post summarizes the discussion of these issues at the Atlanta Fed’s recent Financial Markets Conference.

The Change in the FDIC Assessment Base
Larry D. Wall
March 2015

The Dodd-Frank Act mandates a shift in the FDIC assessment base that moves more of the costs of deposit insurance onto the largest banks. This post analyzes the merits of that shift.

Liquidity Regulation and Financial Stability
Larry D. Wall
February 2015

U.S. bank supervisors are adopting regulations intended to limit banks' provision of liquidity and maturity transformation services. This post raises questions about these regulations’ overall contribution to financial stability.

The Impact of Regulation on Monetary Policy
Larry D. Wall
January 2015

Banking regulation can have unintended consequences for the conduct of monetary policy. This post discusses two regulatory actions that may impair the cost-effectiveness of the FOMC’s preferred tool for normalizing monetary policy.

Notes from the Vault was on hiatus after the March/April 2012 post; it restarted in March 2013.

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