The Community Reinvestment Act at 30 years

Community Reinvestment Act of 1977

To lend or not to lend, that is the question – Economic considerations for Malaysian bankers

The research aims to see if a few macroeconomic indicators can provide a broader perspective to Malaysian bankers & help sharpen one of thecriteria of the 7 C’s of Credit – Conditions – by pin-pointing which economic indicators that can be most helpful to bankers. Statistical analysis was conducted using SPSS: Correlation. The results show that there is a strong correlation between the chosen Macro economic factors that allows for a good indication of “Conditions”. The conclusion is that bankers could use them as indicators when considering “Conditions”

Inflation Forecast Contracts

We introduce a new type of incentive contract for central bankers: inflation forecast contracts, which make central bankers’ remunerations contingent on the precision of their inflation forecasts. We show that such contracts enable central bankers to influence inflation expectations more effectively, thus facilitating more successful stabilization of current inflation. Inflation forecast contracts improve the accuracy of inflation forecasts, but have adverse consequences for output. On balance, paying central bankers according to their forecasting performance improves welfare.central banks, incentive contracts, transparency, inflation targeting, inflation forecast targeting, intermediate targets

Why did the bankers behave so badly?

It is widely believed that bankers played an important role in causing the financial crisis that began in August 2007. In this paper we demonstrate that the compensation system in the financial services industry which rewards perceived talents, rather than long-term performance, leads rational bankers to exhibit belief persistence, overconfidence and confirmation bias

Destructive Effects of Constructive Ambiguity in Risky Times

Unclear bailout policy, underinvestment and calls for bankers? responsibility are some of the observations from the recent financial crisis. The paper explains underinvestment as an inefficient equilibrium. Under ambiguous bailout policy agents suffer from a lack of information with regards to the insolvency resolution methods. Beliefs of bankers regarding whether an insolvent bank is liquidated, may differ from those of depositors even if bankers and depositors possess absolutely symmetric information about the economy. It is shown that such an asymmetry in beliefs results in underinvestment if the investment climate is characterized by high aggregate risk. The paper suggests policy implications aimed at the reduction of anxiety of agents and at aligning their beliefs to restore efficiency

The institutional paradoxes of monetary orthodoxy: reflections on the political economy of central bank independence

There can be no doubting the increasing importance of central banks to processes of international economic management.1 Whilst the names of prominent central bankers may be less well known than those of politicians, and whilst the functions their banks perform receive scant public recognition, the decisions taken by central bankers have a significant bearing on the conduct of everyday life

Bankers acceptances

Acceptances ; Money market

Should the Individual Voting Records of Central Bankers be Published?

We examine whether it is socially beneficial for the individual voting records of central bank council members to be published when the general public is unsure about central bankers' efficiency and central bankers are aiming for re-election. We show that publication is initially harmful since somewhat less efficient central bankers attempt to imitate highly efficient central bankers in their bid to get re-elected. After re-election, however, losses will be lower when voting records are published since the government is more easily able to distinguish highly efficient from less efficient central bankers and can make central bankers individually accountable. Nevertheless, the negative effects of voting transparency predominate and expected overall losses are always larger when voting records are published. -- Wir untersuchen, ob die Veröffentlichung über das individuelle Abstimmungsverhalten von Zentralbankratsmitgliedern gesamtwirtschaftlich nützlich ist, wenn in der Öffentlichkeit Unsicherheit über die Effizienz von Mitgliedern des Zentralbankrats besteht und sich diese um eine Wiederwahl bemühen. Wir weisen nach, dass eine Veröffentlichung zunächst Schaden anrichtet, weil etwas weniger effiziente Mitglieder des Zentralbankrats versuchen, hocheffiziente Zentralbankratsmitglieder in ihren Bemühungen um eine Wiederwahl nachzuahmen. Nach der Wiederwahl sind die Verluste aber geringer, wenn die Abstimmung veröffentlicht wird, weil die Regierung hocheffiziente von weniger effizienten Zentralbankratsmitgliedern leichter unterscheiden und sie einzeln zur Rechenschaft ziehen kann. Die negativen Auswirkungen einer Transparenz des Abstimmungsverhaltens überwiegen aber, und die Nachteile sind insgesamt immer größer, wenn die Abstimmung veröffentlicht wird.

RURAL ECONOMIC DEVELOPMENT: NEW OPPORTUNITIES AND CHALLENGES FOR COMMERCIAL BANKERS

The report discusses commercial banks' role in supporting economic development in rural America. It details demographic and economic trends in rural America. It discusses a number of economic development programs available to commercial bankers and to private sector/public sector partnerships. Finally, the report proposes a set of new tools for commercial bankers to further strengthen their participation in rural community economic development. Note: Figures are not included in the machine readable copy--contact the authors for more information.demographic trends, economic trends, rural America, role of commercial banks, economic development programs, new tools for bankers, Community/Rural/Urban Development, Financial Economics,

Can the Federal Reserve Bank’s Survey of Agricultural Credit Conditions Forecast Land Values?

The value of land dominates the financial structure of most American agricultural production firms, and land values are an important factor in long-term agricultural planning and risk management. As the primary source of collateral for farm loans, farmland values have significant implications for both producers as well as bankers financing agricultural loans. The Federal Reserve Bank of Kansas City’s Survey of Agricultural Credit Conditions is an expert opinion survey in which agricultural bankers provide land value forecasts. As the survey has drawn increased attention, the survey has drawn criticism regarding its use qualitative data to forecast land values. Our research examines the value of the survey data with respect to its ability to forecast movement in land values. Three techniques are used in the analysis. Interpreting the aggregate forecasts as probability estimates, Brier’s probability scores are used to evaluate aggregate bankers’ predictions. Next, turning points are evaluated using contingency tables. Finally, Granger causality tests are used to determine the dynamic relationship between land value predictions and actual land value changes reported by bankers. Bankers’ forecasts predict land values for irrigated and ranchland well, but non-irrigated forecasts were only marginally helpful in prediction non-irrigated farmland values. Forecasts provided in the survey may be beneficial, especially considering the scarcity of other publicly available data.farmland, forecasting, land values, Federal Reserve Bank, Agribusiness, Financial Economics,