Fed policy may disproportionally affect largest banks – study
More leveraged US lenders experience sharper stock declines following rate hikes, Fed paper finds
Monetary policy shocks could have a disproportionate impact on systemically important banks, say researchers with the Federal Reserve Board.
The study, published on August 4, says large, more leveraged banks, and those that rely on wholesale funding and uninsured deposits, have sharper stock price declines than smaller lenders following steep hikes in the federal funds rate.
The authors – Paige Ehresmann, Juan Morelli and Jessie Jiaxu Wang – say severe tightening of monetary policy results in
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com test test test
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com test test test
More on Financial Stability
BoE stress test finds UK CCPs resilient to extreme shocks
Bank will skip next year’s exercise to develop internal capabilities and resume testing in 2027
Trump denies offering Orbán Argentina-style ‘financial shield’
US president says Hungarian PM ‘certainly asked for’ protection arrangement
Lesetja Kganyago on a 3% target and risks posed by rising debt in a fractured system
The Sarb governor speaks about a lower inflation target, the impact of high developed-world debt, the G20’s payments efforts and the fracturing of the multi-lateral system
BoE launches system-wide test on private markets
Second ever exploratory scenario to include major asset managers; results expected in early 2027
Bowman and Hill say stablecoin rules are on their way
FDIC acting chair says regulation to establish application framework should come this month
Alexandre Tombini on LatAm resilience and growth amid uncertainty
The BIS Americas head speaks about the impact of the US tariffs, building resilience and fostering inclusion via digital payments
Serbia says sanctions on Russia pose financial stability risks
Central bank sounds warning as government threatens to divest Russian stakes in domestic oil refiner
BIS chief calls for limits on NBFI leverage in bond markets
Use greater central clearing and minimum haircuts on repos to reduce risks, says Hernández de Cos