In a letter to the Financial Times, graduate student Daniel Aronoff makes the case that the demise of local banks in the U.S. should be examined and regulatory changes should be made to enable them to operate more profitably. “A system that can make small loans to small entrepreneurs not only helps the borrowers, but also promotes a more efficient allocation of resources in the economy," Aronoff writes.
Reuters reporter Ann Saphir writes that Prof. Athanasios Orphanides recommended the Federal Reserve adopt a new monetary policy rule to help guide decisions concerning interest rates. “Monetary policy is most effective when it is formulated in a systematic manner, following a clearly communicated monetary policy rule,” Orphanides explains.
Research by Prof. Athanasios Orphanides examines the Federal Reserve’s efforts to improve communications, reports Nick Timiraos for The Wall Street Journal. Orphanides found “the quarterly summary of economic projections from Fed officials and its accompanying interest-rate projections, sometimes referred to as a ‘dot plot,’ would be more valuable if it expressed changes in officials’ uncertainty or confidence in their projections.”
Writing for the Financial Times, graduate student Daniel Aronoff examines the impact of the FedNow banking service, which aims to process and settle individual payments within seconds. FedNow will have a “revolutionary impact on the banking industry and monetary policy,” writes Aronoff. “When depositors are able to move funds costlessly and instantaneously between accounts, it will become feasible to arbitrage between banks in real time.”
Wall Street Journal reporter Chris Gay profiles several books examining the financial crisis, highlighting Prof. Simon Johnson’s book “13 Bankers.” In the book Johnson and his co-author, “trace two centuries of government attempts to grapple with the power of big finance,” Gay writes.