Supervising bank safety and soundness: some open issues

Banks and banking ; Bank supervision

The Federal Home Loan Bank system : the "other" housing GSE.

Founded in 1932, the twelve Federal Home Loan Banks (FHLBs) have historically provided long-term funding to specialized mortgage lenders. But legislative changes in the wake of the 1980s’ thrift crises spurred the FHLBs to expand in both size and scope. For example, FHLB balance sheets now also include a substantial investment in mortgages and mortgage-backed securities, and the attendant interest rate risk has created financial and accounting difficulties at some of the FHLBs. ; Like Fannie Mae and Freddie Mac, the FHLB System is a government-sponsored enterprise that funds itself largely with federal agency debt obligations that investors perceive to be implicitly guaranteed by the U.S. government. This article identifies some differences in risk-taking incentives between the cooperatively owned FHLB System and investor-owned Fannie Mae and Freddie Mac. ; Cooperative ownership itself does not reduce FHLB risk-taking incentives because, unlike many mutuals, the FHLB System does not bundle its equity and debt claims. Also, the joint-and-several liability provision in the FHLBs’ consolidated debt obligations and a lack of equity market discipline may heighten FHLB risk-taking incentives. However, the FHLBs cannot avail themselves of equity-based managerial compensation, which create high-powered risk-taking incentives in investor-owned firms. Thus, it is unclear whether the FHLBs’ risk-taking incentives are necessarily weaker than Fannie Mae’s and Freddie Mac’s.Federal home loan banks

Feasibility test for a V-slit star mapper for pioneer spacecraft terminal navigation

A laboratory demonstration of the feasibility of using a V-slit star mapper to meet the sensitivity and accuracy of on-board navigational requirements for future Pioneer Missions to the outer planets was conducted by the Control and Sensors Laboratory of TRW. The breadboard was extremely simple in configuration, consisting of an end-on photomultiplier tube and a V-slit reticle located at the focal plane of the objective lens. In addition, a plano-convex lens was used between the reticle and the PMT in a Fabry-Perot configuration. The analytical effort indicated that the sensor should easily meet the requirements. The Pioneer SRA test set was examined to determine its basic accuracy and modify it where necessary to bring its accuracy into the 1-3 arc second range. The test results show that it is feasible to use this type of star mapper in the 10 arc second accuracy range. The test equipment accuracy (approximately 5 arc Sec) was sufficient to bound the sensor errors at less than 10 arc seconds

The 2007-09 financial crisis and bank opaqueness

Doubts about the accuracy with which outside investors can assess a banking firm’s value motivate many government interventions in the banking market. The recent financial crisis has reinforced concerns about the possibility that banks are unusually opaque. Yet the empirical evidence, thus far, is mixed. This paper examines the trading characteristics of bank shares over the period from January 1990 through September 2009. We find that bank share trading exhibits sharply different features before vs. during the crisis. Until mid-2007, large (NYSE-traded) banking firms appear to be no more opaque than a set of control firms, and smaller (NASD-traded) banks are, at most, slightly more opaque. During the crisis, however, both large and small banking firms exhibit a sharp increase in opacity, consistent with the policy interventions implemented at the time. Although portfolio composition is significantly related to market microstructure variables, no specific asset category(s) stand out as particularly important in determining bank opacity.Banks and banking ; Stock market ; Financial crises

Determination of molecular spectroscopic parameters and energy-transfer rates by double-resonance spectroscopy

The spectroscopy of small to medium-size polyatomic molecules can be extremely complex, especially in higher-lying overtone and combination vibrational levels. The high density of levels also complicates the understanding of inelastic collision processes, which is required to model energy transfer and collision broadening of spectral lines. Both of these problems can be addressed by double-resonance spectroscopy, i.e., time-resolved pump-probe measurements using microwave, infrared, near-infrared, and visible-wavelength sources. Information on excited-state spectroscopy, transition moments, inelastic energy transfer rates and propensity rules, and pressure-broadening parameters may be obtained from such experiments. Examples are given for several species of importance in planetary atmospheres, including ozone, silane, ethane, and ammonia