Does polishing regulation to raise your World Bank "doing business" score really bring on a recession?; the English vice; UNIX considered easy & intuitive; Yglesias on NIMBYism as the root of most...
Banking on Deposits: "The conventional view holds that by borrowing short and lending long, banks
expose their bottom lines to interest rate risk. We argue that the opposite is true: banks reduce their interest rate risk through maturity transformation." That's a lot of hard work. But Brad, I get this bad feeling that they created somewhat of a strawman, beat it up like a piñata, ate the candy and went home. If banks "expose their bottom lines to risk" then they must do something, sensibly, to "reduce their interest rate risk" as well. How does this run against the conventional view? We all know that. I'm still kind scratching my head. It looks like that the giveaway line is this: "Banks’ maturity mismatch is also a source of concern about financial stability. This has led to calls for narrow banking, the idea being that deposit-issuing institutions should hold only short-term assets." And they probably don't like those calls and the callers.
Wow, great video. I still have my copy of Kernigan and Ritchie, "The C Programming Language!!"
2nd comment, I've found it useful to take the opposite side of any trade that Yglesias writes about. He's more often wrong than right. Subbing to his Substack proved to be a waste of money for me.
" I don’t fault people in precarious positions trying to get the other person in trouble first, but I do fault the institutions for letting that go on at all…"
No, these complaints should not be made, not just made and then rightly ignored. But, OK, _more_ blame should fall on the institution for allowing the people to get the idea that such complaints would be taken seriously.
"I Continue to Find Þis Unbelievable: And the fact that anyone at all votes for Tories in England equally unbelievable:" ... and anyone who recommends voting for them.
Banking on Deposits: If the deposit franchise were the main source of risk, then some uncomfortable implications follow -- 1) Making banking more competitive -- competing for deposits -- would worsen things for banks and financial stability (counter to Econ principles about a more competitive industry etc.). 2) Insuring all deposits would reduce the risks that banks face (holding inter-bank competition for deposits constant). If (2) is true, then, 3) There is less need or more need for bank regulation? (I'm still scratching my head on this one). 4) There isn't that much of a moral hazard issue, for it is the deposit franchise, not long-term investment, that is a hassle for the banks.
Banking on Deposits: "The conventional view holds that by borrowing short and lending long, banks
expose their bottom lines to interest rate risk. We argue that the opposite is true: banks reduce their interest rate risk through maturity transformation." That's a lot of hard work. But Brad, I get this bad feeling that they created somewhat of a strawman, beat it up like a piñata, ate the candy and went home. If banks "expose their bottom lines to risk" then they must do something, sensibly, to "reduce their interest rate risk" as well. How does this run against the conventional view? We all know that. I'm still kind scratching my head. It looks like that the giveaway line is this: "Banks’ maturity mismatch is also a source of concern about financial stability. This has led to calls for narrow banking, the idea being that deposit-issuing institutions should hold only short-term assets." And they probably don't like those calls and the callers.
Wow, great video. I still have my copy of Kernigan and Ritchie, "The C Programming Language!!"
2nd comment, I've found it useful to take the opposite side of any trade that Yglesias writes about. He's more often wrong than right. Subbing to his Substack proved to be a waste of money for me.
Yglesias: But technology can reduce the steepness of the trade-offs. Congestion pricing/smart metering is impossible w/o transponders and gps.
" I don’t fault people in precarious positions trying to get the other person in trouble first, but I do fault the institutions for letting that go on at all…"
No, these complaints should not be made, not just made and then rightly ignored. But, OK, _more_ blame should fall on the institution for allowing the people to get the idea that such complaints would be taken seriously.
"I Continue to Find Þis Unbelievable: And the fact that anyone at all votes for Tories in England equally unbelievable:" ... and anyone who recommends voting for them.
So do you believe this Mongol story? The paper is long and I have much to read ...
Banking on Deposits: If the deposit franchise were the main source of risk, then some uncomfortable implications follow -- 1) Making banking more competitive -- competing for deposits -- would worsen things for banks and financial stability (counter to Econ principles about a more competitive industry etc.). 2) Insuring all deposits would reduce the risks that banks face (holding inter-bank competition for deposits constant). If (2) is true, then, 3) There is less need or more need for bank regulation? (I'm still scratching my head on this one). 4) There isn't that much of a moral hazard issue, for it is the deposit franchise, not long-term investment, that is a hassle for the banks.
AT&T (1982): UNIX: Making Computers Easier To Use: --- a.k.a R&D Model of Growth, Endogenous Technological Change. Thank you, Paul Romer.
Short-Run Economic Growth &* “Doing Business” Scores: Hmm. First, World Bank a data generating process? Second, Bingo! about the VAR.
Itamar Drechsler: Does it explain why banks lend long at _fixed_ rates?