165 research outputs found
Financial amplification mechanisms and the Federal Reserve’s supply of liquidity during the crisis
No full textNew York Fed economists Asani Sarkar and Jeffrey Shrader examine the Federal Reserve’s recent liquidity actions in the context of studies on financial amplification mechanisms, whereby an initial financial sector shock triggers substantially larger shocks elsewhere in the sector and in the broader economy. Presented at "Central Bank Liquidity Tools and Perspectives on Regulatory Reform" a conference sponsored by the Federal Reserve Bank of New York, February 19-20, 2009.Federal Reserve System ; Liquidity (Economics) ; Financial crises
Should U.S. investors hold foreign stocks?
No full textU.S. investors have traditionally been reluctant to acquire foreign securities_in part, perhaps, because they fear that restrictions on trading in foreign markets will sharply limit any gains they might realize from diversifying their portfolios. An analysis of the effects of one type of restriction, short-sale constraints, on stock returns between 1976 and 1999 suggests that investing in emerging market stocks offers substantial benefits even when a ban on short sales is in place.Investments, Foreign - United States ; Financial markets ; International finance
Securitizing property catastrophe risk
No full textThe trading of property catastrophe risk using standard financial instruments such as options and bonds enables insurance companies to hedge their exposure by transferring risk to investors, who take positions on the occurrence and cost of catastrophes. Although these property catastrophe risk instruments are relatively new products, they have already established an important link between the insurance industry and the U.S. capital market.Insurance
Electronic trading on futures exchanges
No full textAlthough the open outcry method is still the best way to trade highly active contracts on futures exchanges, electronic systems can improve the efficiency and cost effectiveness of trading some types of futures and options. In recent years, the volume of electronic trades on futures exchanges has more than doubled, and it should continue to grow rapidly.Futures
Do Brokers Misallocate Customer Trades? Evidence From Futures Markets
No full textIn the context of futures markets, we study whether brokers allocate more favorable trades to their own accounts, and less favorable trades to their customers. We find that, within a thirty minute trading bracket, brokers on average buy at a lower price and sell at a higher price for their own accounts relative to their customers. We show evidence that brokers' price advantage may be compensation for providing liquidity to the market when brokers trade for their own accounts, but no evidence that they are due to brokers' superior information, or to greater effort by brokers when trading for themselves. Consistent with the idea that, in a competitive market for brokerage services, brokers may pass on some of their profits to customers, we find that brokers who trade for themselves also provide superior execution for their customers, relative to brokers who do not trade for themselves.futures, brokers, trading
Crisis and Responses: the Federal Reserve and the Financial Crisis of 2007-2008
No full textRealizing that their traditional instruments were inadequate for responding to the crisis that began on 9 August 2007, Federal Reserve officials improvised. Beginning in mid-December 2007, they implemented a series of changes directed at ensuring that liquidity would be distributed to those institutions that needed it most. Conceptually, this meant America's central bankers shifted from focusing solely on the size of their balance sheet, which they use to keep the overnight interbank lending rate close to their chosen target, to manipulating the composition of their assets as well. In this paper, I examine the Federal Reserve's conventional and unconventional responses to the financial crisis of 2007-2008.
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From Qawwali to Sufi Rock: Contemporary Expressions of Muslim Devotional Literature
No full textAli Asani, professor of Indo-Muslim and Islamic religion and cultures at Harvard University, gave a fascinating talk entitled, From Qawwali to Sufi Rock: Exploring Contemporary Expressions of Muslim Devotional Literatureon Friday, February 11 in the Meyerson Conference Room at the University of Texas at Austin. Hindi Urdu Flagship students joined UT faculty and graduate students to hear Asani describe the modern Sufi rock phenomenon epitomized by Salman Ahmad and his band Junoon. Asani outlined Ahmad’s personal musical, religious, and political journey and attempted to place Sufi rock in the broader tradition of Muslim devotional literature.
A native of Kenya, Asani received both his undergraduate degree summa cum laude in the comparative study of religion and his Ph.D. in Near Eastern languages and civilizations from Harvard University. He currently directs the university’s Ph.D. program in Indo-Muslim Culture and chairs the department of Near Eastern Languages and Civilizations. He also serves as the associate director of the Prince Alwaleed bin Talal Islamic Studies Program.
A scholar of Islam in South Asia, Dr. Asani’s research focuses on Shia and Sufi devotional traditions in the region. In addition, he is interested in popular or folk forms of Muslim devotional life, and Muslim communities in the West. His books include The Bujh Niranjan: An Ismaili Mystical Poem; The Harvard Collection of Ismaili Literature in Indic Literatures: A Descriptive Catalog and Finding Aid; Celebrating Muhammad: Images of the Prophet in Muslim Devotional Poetry (co-author); Al-Ummah: A Handbook for an Identity Development Program for North American Muslim Youth; Ecstasy and Enlightenment: The Ismaili Devotional Literatures of South Asia;Let’s Study Urdu: An Introduction to the Urdu Script and Let’s Study Urdu: An Introductory Course.
Dr. Asani has been particularly active post-Sept. 11 in improving the understanding of Islam and its role in Muslim societies by conducting workshops for high school and college educators as well as making presentations at various public forums. More recently, he has been involved in the Islamic Cultural Studies Initiative, an international professional development program for high school teachers in Kenya, Pakistan and Texas intended to promote a culturally and historically based approach to the study of Islam and Muslim societies. He has also served on the American Academy of Religion’s Task Force on the teaching of religion in schools. In 2002, he was awarded the Harvard Foundation medal for his outstanding contributions to improving intercultural and race relations at Harvard and in the nation.Asian Studie
Why is Price Discovery in Credit Default Swap Markets News-Specific?
No full textAbstract: We analyse daily lead-lag patterns in US equity and credit default swap (CDS) returns. We first document that equity returns robustly lead CDS returns. However, we find that the CDSlag is due to common (and not firm-specific) news and arises predominantly in response to positive (instead of negative) equity market news. We provide an explanation for this newsspecific price discovery based on dealers in the CDS market exploiting their informational advantage vis-à-vis institutional investors with hedging demands. In support of this explanation we find that the CDS-lag and its newsspecificity are related to various firm-level proxies for hedging demand in the cross-section as well measures for economy-wide informational asymmetries over time.price discovery;CDS;hedging demand;informational asymmetries
Federal Reserve policies and financial market conditions during the crisis
No full textDuring the recent financial crisis, the Federal Reserve implemented a series of extraordinary and unconventional policies to alleviate the impact of the crisis on financial markets and the economy. In this paper, we examine the effects of these policies on broad financial market conditions, explicitly taking into account that policy was endogenously determined in response to prevailing financial market and economic conditions. We find that the Fed was more likely to initiate or expand new programs when financial market conditions were tighter than usual and economic conditions deteriorating. We also find that the Fed’s policies improved broad financial market conditions significantly at announcement and that the improvements were associated primarily with program initiations and expansions.Federal Reserve Act ; Financial crises - United States
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