5,004 research outputs found
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Charles Calomiris on FinTech
No full textDr. Charles Calomiris joins Dr. Scott Bauguess and Dr. Cesare Fracassi to discuss FinTech.
Charles W. Calomiris is the Henry Kaufman Professor of Financial Institutions at Columbia Business School and a Professor of International and Public Affairs at Columbia’s School of International and Public Affairs. He recently served as Chief Economist and Senior Deputy Comptroller at the Office of the Comptroller of the Currency. Professor Calomiris is a member of the Financial Economists Roundtable, and a Research Associate of the National Bureau of Economic Research. He was a Distinguished Fellow at the Hoover Institution, where he co-directed the Initiative on Regulation and the Rule of Law for many years. Professor Calomiris received a BA in economics from Yale and a PhD in economics from Stanford University. His research spans banking, monetary economics, corporate finance and financial history. His recent writings include studies using textual analysis to measure the consequences of risk for international equity markets, foreign exchange markets, regulatory costs, and monetary policy actions, studies of the consequences for investment and growth of capital inflows into emerging economies, and studies of the origins of banking crises and the role of government policies in magnifying or mitigating systemic risk, including his recent books, Fragile By Design: The Political Origins of Banking Crises and Scarce Credit (with Stephen Haber), Princeton, 2014, and Reforming Financial Regulation After Dodd-Frank, Manhattan Institute, 2017, and two edited volumes, Rules for the Lender of Last Resort, Journal of Financial Intermediation, 2016, and Assessing Banking Regulation During the Obama Era, Journal of Financial Intermediation, 2018. He currently is working on a book entitled Useless History and the Future of Banking.Salem Cente
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Measuring the Economic Costs to Firms of Regulation with Charles Calomiris
No full textCharles W. Calomiris present his research, co-written with Harry Mamaysky and Ruoke Yang, over measuring the cost of regulation.Salem Cente
Universal banking and the financing of industrial development
No full textIn universal banking, large banks operate extensive networks of branches, provide many different services, hold several claims on firms (including equity and debt), and participate directly in the corporate governance of firms that rely on the banks for funding or as insurance underwriters. In this paper, the author contrasts the cost of financing industrialization in the United States and in Germany during the second industrial revolution. He explains that large production is typical of modern industrial practice, so the lessons from that period apply broadly to contemporary developing countries. The second industrial revolution involved many new products and technologies. Firms were producing new goods in new ways on an unprecedented scale. Therefore, they needed quick access to heavy financing. Finance costs for industry were lower in Germany than in the United States, because U.S.regulations prevented the universal banking from which Germany benefited. High finance costs retarded U.S. realization of its full industrial potential. The potential to expand quickly and reap economies of scale was greater in German industrialization. The cost of industrial financing began to decline when institutional changes came about that increased the concentration of financial market transactions. In recent decades, a combination of macroeconomic distress, international competitive pressure, and the creative invention of new financial intermediaries has helped the U.S. financial system overcome the regulatory mandate of financial fragmentation.Financial Intermediation,Payment Systems&Infrastructure,Banks&Banking Reform,Labor Policies,Decentralization,Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Environmental Economics&Policies,Housing Finance
Banking Crises and the Rules of the Game
No full textWhen and why do banking crises occur? Banking crises properly defined consist either of panics or waves of costly bank failures. These phenomena were rare historically compared to the present. A historical analysis of the two phenomena (panics and waves of failures) reveals that they do not always coincide, are not random events, cannot be seen as the inevitable result of human nature or the liquidity transforming structure of bank balance sheets, and do not typically accompany business cycles or monetary policy errors. Rather, risk-inviting microeconomic rules of the banking game that are established by government have always been the key additional necessary condition to producing a propensity for banking distress, whether in the form of a high propensity for banking panics or a high propensity for waves of bank failures. Some risk-inviting rules took the form of visible subsidies for risk taking, as in the historical state-level deposit insurance systems in the U.S., Argentina’s government guarantees for mortgages in the 1880s, Australia’s government subsidization of real estate development prior to 1893, the Bank of England’s discounting of paper at low interest rates prior to 1858, and the expansion of government-sponsored deposit insurance and other bank safety net programs throughout the world in the past three decades, including the generous government subsidization of subprime mortgage risk taking in the U.S. leading up to the recent crisis. Other risk-inviting rules historically have involved government-imposed structural constraints on banks, which include entry restrictions like unit banking laws that constrain competition, prevent diversification of risk, and limit the ability to deal with shocks. Another destabilizing rule of the banking game is the absence of a properly structured central bank to act as a lender of last resort to reduce liquidity risk without spurring moral hazard. Regulatory policy often responds to banking crises, but not always wisely. The British response to the Panic of 1857 is an example of effective learning, which put an end to the subsidization of risk through reforms to Bank of England policies in the bills market. Counterproductive responses to crises include the decision in the U.S. not to retain its early central banks, which reflected misunderstandings about their contributions to financial instability in 1819 and 1825, and the adoption of deposit insurance in 1933, which reflected the political capture of regulatory reform.
Profiting from Government Stakes in a Command Economy: Evidence from Chinese Asset Sales
No full textWe document the market response to an unexpected announcement of proposed sales of government-owned shares in China. In contrast to the "privatization premium" found in earlier work, we find a negative effect of government ownership on returns at the announcement date and a symmetric positive effect in response to the announced cancellation of the government sell-off. We argue that this results from the absence of a Chinese political transition to accompany economic reforms, so that the positive effects on profits of political ties through government ownership outweigh the potential efficiency costs of government shareholdings. Companies with former government officials in management have positive abnormal returns, suggesting that personal ties can substitute for the benefits of government ownership. The "privatization discount" is higher for firms located in Special Economic Zones, where local government discretionary authority is highest. This is consistent with the view that firms in these locations are more dependent on government connections. We also find that companies with relatively high welfare payments to employees, which presumably would fall with privatization, benefit disproportionately from the privatization announcement.
How mortgage market credit conditions affect US presidential election results
No full textAggressive government policies to prevent a collapse of credit may be more important for the election than the rate of unemployment, write Alexis Antoniades and Charles Calomiris. America is in the middle of an election year
The Defining Moment: The Great Depression and the American Economy in the Twentieth Century
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Bank Failures in Theory and History: The Great Depression and Other "Contagious" Events
No full textBank failures during banking crises, in theory, can result either from unwarranted depositor withdrawals during events characterized by contagion or panic, or as the result of fundamental bank insolvency. Various views of contagion are described and compared to historical evidence from banking crises, with special emphasis on the U.S. experience during and prior to the Great Depression. Panics or "contagion" played a small role in bank failure, during or before the Great Depression-era distress. Ironically, the government safety net, which was designed to forestall the (overestimated) risks of contagion, seems to have become the primary source of systemic instability in banking in the current era.
Banking Crises and the Rules of the Game
No full textThis paper is aimed to address when and why do banking crises occur, and whether financial reforms in reaction to crises are generally beneficial. It is argued that banking crises properly defined consist either of panics or of waves of costly bank failures, and they do not necessarily coincide. Risk-inviting microeconomic rules of the banking game that are established by government are viewed as the key necessary condition to producing a propensity for banking distress, whether in the form of a high propensity for banking panics or a high propensity for waves of bank failures.Banking, banking crises, financial reforms, microeconomic rules.
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