Financial Markets

Audio

C. Peter McColough Series on International Economics: Fiscal Irresponsibility Clouds the Future of the United States (Audio)

Speaker: Richard A. Posner
Presider: Tim Ferguson

Listen to Richard A. Posner, judge for the U.S. Court of Appeals for the Seventh Circuit and senior lecturer at the University of Chicago Law School, analyze how past fiscal irresponsibility has led to challenges to the global standing of the U.S. financial markets.

See more in Financial Crises; Financial Markets; United States

Video

C. Peter McColough Series on International Economics: Fiscal Irresponsibility Clouds the Future of the United States

Speaker: Richard A. Posner
Presider: Tim Ferguson

Watch Richard A. Posner, judge for the U.S. Court of Appeals for the Seventh Circuit and senior lecturer at the University of Chicago Law School, analyze how past fiscal irresponsibility has led to challenges to the global standing of the U.S. financial markets.

See more in Financial Crises; Financial Markets; United States

Video

The Education of an American Dreamer

Speaker: Peter G. Peterson
Presider: Warren M. Hoge

Watch Peter G. Peterson, founder and chairman of the Peter G. Peterson Foundation and chairman emeritus of the Council on Foreign Relations, discuss his new book, The Education of an American Dreamer: How a Son of Greek Immigrants Learned His Way from a Nebraska Diner to Washington, Wall Street, and Beyond.

See more in Financial Markets; United States

Other Report

Credit Default Swaps, Clearinghouses, and Exchanges

Author: Squam Lake Working Group on Financial Regulation

Credit default swaps (CDS) are contracts that provide protection against the risk of default by borrowers. The failure of one important participant in the CDS market can destabilize the financial system by inflicting significant losses on many trading partners simultaneously. A clearinghouse could in theory reduce counterparty risk by standing between the buyer and seller of protection, insulating the counterparties’ exposure to each other’s default. This Working Paper, the fifth in the Squam Lake Working Group series distributed by the Center for Geoeconomic Studies, analyzes the market for credit default swaps and makes specific recommendations about appropriate roles for clearinghouses and about how they should be organized.

See more in United States; Financial Markets; Financial Regulation

Other Report

A Systemic Regulator for Financial Markets

Author: Squam Lake Working Group on Financial Regulation

Financial regulations in almost all countries are designed to ensure the soundness of individual institutions, principally commercial banks, against the risk of loss on their assets. This focus on individual firms ignores critical interactions between institutions and can also cause regulators to overlook important changes in the overall financial system. The solution: One regulatory organization in each country should be responsible for overseeing the health and stability of the overall financial system. This Working Paper, the fourth in the Squam Lake Working Group series distributed by the Center for Geoeconomic Studies, argues that the central bank should be charged with this important new responsibility.

See more in Financial Regulation; Financial Markets; Global

Other Report

Reforming Capital Requirements for Financial Institutions

Author: Squam Lake Working Group on Financial Regulation

This Working Paper, the second in a series from the Squam Lake Working Group distributed by the Center for Geoeconomic Studies, argues that regulators consider systemic effects when setting bank capital requirements. Everything else the same, capital requirements should be proportionately higher for larger banks, banks that hold more illiquid assets, and banks that finance more of their operations with short-term debt. But capital requirements are not free. When designing capital requirements that address systemic concerns, regulators must weigh the costs such requirements impose on banks during good times against the benefit of having more capital in the financial system when a crisis strikes.

See more in Global; Financial Markets; Financial Regulation

Other Report

A New Information Infrastructure for Financial Markets

Author: Squam Lake Working Group on Financial Regulation

Information about prices and quantities of assets lies at the heart of well-functioning capital markets. In the current financial crisis, it has become clear that many important actors—both firms and regulatory agencies—have not had sufficient information. Distributed by the Center for Geoeconomic Studies, this Working Paper proposes a new regulatory regime for gathering and disseminating financial market information. The authors argue that government regulators need a new infrastructure to collect and analyze adequate information from large (systemically important) financial institutions. This new information framework would bolster the government's ability to foresee, contain, and, ideally, prevent disruptions to the overall financial services industry.

See more in United States; Financial Markets; Digital Infrastructure