Tag: economics

economics

In the FICC of It

This week’s podcast kicks off with Colin Lambert discussing some of the feedback he received over his comments in the week’s column over the re-papering of trades post the SNB debacle in 2015. He does not, of course, miss the opportunity to drive home his argument that algos should have mandatory price limits, along the […]

Academics Sceptical on Economic Value of Cryptocurrencies

Academics speaking at CoinDesk’s Consensus event in New York today appeared doubtful about the economic value of cryptocurrencies. In a panel titled, From Digital Gold to Contract Theory: The Economics of Mainstream Adoption, Joshua Gans, professor of strategic management at Rotman School of Management, said that an economists job, when confronted by new and exciting […]

Markets, Ratings Agencies Divided Over “Too Big to Fail”

A new blog by economists at the Federal Reserve Bank of New York (NY Fed) shows that ratings agencies and financial markets are divided about whether the Dodd-Frank Act has significantly reduced the “too big to fail” problem.

Noting that one of the goals of Dodd-Frank was to end “too big to fail”, the blog points out that to this end, the Act required systemically important financial institutions to submit detailed plans for an orderly resolution (“living wills”) and authorised the Federal Deposit Insurance Corporation (FDIC) to create an alternative resolution procedure.

The response from the FDIC was to create a “single point of entry” (SPOE) strategy, announced in December 2013, in which healthy parent companies bear the losses of their failing subsidiaries.