The introduction of the TMPG fails charge for U.S. Treasury securities

The TMPG fails charge for U.S. Treasury securities provides that a buyer of Treasury securities can claim monetary compensation from the seller if the seller fails to deliver the securities on a timely basis. The charge was introduced in May 2009 and replaced an existing market convention of simply postponing—without any explicit penalty and at an unchanged invoice price—a seller’s obligation to deliver Treasury securities if the seller fails to deliver the securities on a scheduled settlement date. This article explains how a proliferation of settlement fails following the insolvency of Lehman Brothers Holdings Inc. in September 2008 led the Treasury Market Practices Group (TMPG)—a group of market professionals committed to supporting the integrity and efficiency of the U.S. Treasury market—to promote a change in the existing market convention. The change—the introduction of the fails charge—was significant because it mitigated an important dysfunctionality in the secondary market for U.S. Treasury securities and because it stands as an example of the value of cooperation between the public and private sectors in responding to altered market conditions in a flexible, timely, and innovative fashion.Treasury bonds ; Government securities ; Clearing of securities ; Secondary markets

YPFS Lessons Learned Oral History Project: An Interview with Lorie Logan

Suggested Citation Form: Logan, Lorie, 2019. “Lessons Learned Interview. Interview by Mercedes Cardona. Yale Program on Financial Stability Lessons Learned Oral History Project. December 17, 2019. Transcript. https://ypfs.som.yale.edu/library/ypfs-lesson-learned-oral-history-project-interview-lorie-loga

Novel Lender of Last Resort Programs

Part of a multipart series, RESPONDING to the GLOBAL FINANCIAL CRISIS: What We Did and Why We Did I

Understanding Crime Control Theater: Do Sample Type, Gender, and Emotions Relate to Support for Crime Control Theater Policies?

Policies such as America’s Missing: Broadcast Emergency Response Alerts, safe haven laws, Megan’s law, and three-strikes laws have provided the public with a feeling of safety and security. However, research has provided evidence that disputes their effectiveness. These types of laws and policies have become known as “crime control theater” (CCT) because they appear to be effective, serve the public’s best interests, and provide a crime control purpose but are largely ineffective and have unintended negative consequences. Using self-affirmation and emotion theory, this study examines potential explanations as to why individuals might support CCT policies. It also investigates whether support differs based on relevant characteristics (e.g., gender, sample type, and preexisting beliefs about policy effectiveness). Results suggest that females and Amazon Mechanical Turk (MTurk) workers tend to support CCT policies more than males and college students. Further, the relationship between gender and support was mediated by anticipatory guilt, and this effect was stronger for individuals who did not believe in the effectiveness of the policy. Results suggest that individuals who believe the policy is effective will support it more than those who do not, regardless of their anticipated guilt. In contrast, those who doubt the policy only support it if they anticipate feeling guilty; this effect is stronger for women. Results can help explain why people support policies that are largely ineffective and suggest that relevance to the issue can help explain why some groups are more supportive than others

Foreign-Targeted Treasury Securities

• Prior to May 2009, market convention enabled a seller of Treasury securities to postpone