The Contagion of Capital
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Explanatory Notes of Flow of Funds
Explanatory Notes of Flow of Funds 1. The Principle and Purpose of Compilation The principle of flow of funds statistics is to break down the economy into sectors, classify transactions, and compile sources and uses of funds for each sector based on double-entry bookkeeping. Finally, the sectoral data are consolidated to draw up flow of funds accounts for the economy as a whole. The purpose of flow of funds statistics is to make up for the lack of financial transactions in national income statistics. Through sectoral breakdown and transaction classification, the flows of funds among various sectors are observed and the relationships between the real and the financial aspects of the economy are understood. Hence, flow of funds accounts has become a fundamental part of the System of National Accounts and Monetary Financial Statistics. 2. Overview of the Contents Flow of funds statistics comprises three tables, "Flow of Funds Matrix," "Financial Assets and Liabilities of All Sectors" and "Year-end Amounts Outstanding of Financial Transaction Items." All the three tables only show financial transactions or outstanding financial assets and liabilities. "Flow of Funds Matrix" (1) The economy is divided into several sectors. Under each sector, two columns, "uses of funds" and "sources of funds," are listed. (2) The "uses of funds" and "sources of funds" are transaction flows that preclude valuation and other changes. Due to insufficient data, these are mostly recorded as changes in the outstanding amounts of financial assets and liabilities for each sector between two specific points in time. For those items, financial transactions reflect changes in financial assets and liabilities of each sector, which are recorded in "uses of funds" and "sources of funds," respectively. -
How Did Too Big to Fail Become Such a Problem for Broker-Dealers?
How did Too Big to Fail become such a problem for broker-dealers? Speculation by Andy Atkeson March 2014 Proximate Cause • By 2008, Broker Dealers had big balance sheets • Historical experience with rapid contraction of broker dealer balance sheets and bank runs raised unpleasant memories for central bankers • No satisfactory legal or administrative procedure for “resolving” failed broker dealers • So the Fed wrestled with the question of whether broker dealers were too big to fail Why do Central Bankers care? • Historically, deposit taking “Banks” held three main assets • Non-financial commercial paper • Government securities • Demandable collateralized loans to broker-dealers • Much like money market mutual funds (MMMF’s) today • Many historical (pre-Fed) banking crises (runs) associated with sharp changes in the volume and interest rates on loans to broker dealers • Similar to what happened with MMMF’s after Lehman? • Much discussion of directions for central bank policy and regulation • New York Clearing House 1873 • National Monetary Commission 1910 • Pecora Hearings 1933 • Friedman and Schwartz 1963 Questions I want to consider • How would you fit Broker Dealers into the growth model? • What economic function do they perform in facilitating trade of securities and financing margin and short positions in securities? • What would such a theory say about the size of broker dealer value added and balance sheets? • What would be lost (socially) if we dramatically reduced broker dealer balance sheets by regulation? • Are broker-dealer liabilities -
A Business Lawyer's Bibliography: Books Every Dealmaker Should Read
585 A Business Lawyer’s Bibliography: Books Every Dealmaker Should Read Robert C. Illig Introduction There exists today in America’s libraries and bookstores a superb if underappreciated resource for those interested in teaching or learning about business law. Academic historians and contemporary financial journalists have amassed a huge and varied collection of books that tell the story of how, why and for whom our modern business world operates. For those not currently on the front line of legal practice, these books offer a quick and meaningful way in. They help the reader obtain something not included in the typical three-year tour of the law school classroom—a sense of the context of our practice. Although the typical law school curriculum places an appropriately heavy emphasis on theory and doctrine, the importance of a solid grounding in context should not be underestimated. The best business lawyers provide not only legal analysis and deal execution. We offer wisdom and counsel. When we cast ourselves in the role of technocrats, as Ronald Gilson would have us do, we allow our advice to be defined downward and ultimately commoditized.1 Yet the best of us strive to be much more than legal engineers, and our advice much more than a mere commodity. When we master context, we rise to the level of counselors—purveyors of judgment, caution and insight. The question, then, for young attorneys or those who lack experience in a particular field is how best to attain the prudence and judgment that are the promise of our profession. For some, insight is gained through youthful immersion in a family business or other enterprise or experience. -
The Federal Reserve's Commercial Paper Funding Facility
Tobias Adrian, Karin Kimbrough, and Dina Marchioni The Federal Reserve’s Commercial Paper Funding Facility 1.Introduction October 7, 2008, with the aim of supporting the orderly functioning of the commercial paper market. Registration for he commercial paper market experienced considerable the CPFF began October 20, 2008, and the facility became Tstrain in the weeks following Lehman Brothers’ operational on October 27. The CPFF operated as a lender- bankruptcy on September 15, 2008. The Reserve Primary of-last-resort facility for the commercial paper market. It Fund—a prime money market mutual fund with $785 million effectively extended access to the Federal Reserve’s discount in exposure to Lehman Brothers—“broke the buck” on window to issuers of commercial paper, even if these issuers September 16, triggering an unprecedented flight to quality were not chartered as commercial banks. Unlike the discount from high-yielding to Treasury-only money market funds. window, the CPFF was a temporary liquidity facility that was These broad investor flows within the money market sector authorized under section 13(3) of the Federal Reserve Act in severely disrupted the ability of commercial paper issuers to the event of “unusual and exigent circumstances.” It expired roll over their short-term liabilities. February 1, 2010.1 As redemption demands accelerated, particularly in high- The goal of the CPFF was to address temporary liquidity yielding money market mutual funds, investors became distortions in the commercial paper market by providing a increasingly reluctant to purchase commercial paper, especially backstop to U.S. issuers of commercial paper. This liquidity for longer dated maturities. -
NASA's First A
NASA’s First A Aeronautics from 1958 to 2008 National Aeronautics and Space Administration Office of Communications Public Outreach Division History Program Office Washington, DC 2013 The NASA History Series NASA SP-2012-4412 NASA’s First A Aeronautics from 1958 to 2008 Robert G. Ferguson Library of Congress Cataloging-in-Publication Data Ferguson, Robert G. NASA’s first A : aeronautics from 1958 to 2008 / Robert G. Ferguson. p. cm. -- (The NASA history series) (NASA SP ; 2012-4412) 1. United States. National Aeronautics and Space Administration--History. 2. United States. National Advisory Committee for Aeronautics--History. I. Title. TL521.312.F47 2012 629.130973--dc23 2011029949 This publication is available as a free download at http://www.nasa.gov/ebooks. TABLE OF CONTENTS Acknowledgments vii Chapter 1: The First A: The Other NASA ..................................1 Chapter 2: NACA Research, 1945–58 .................................... 25 Chapter 3: Creating NASA and the Space Race ........................57 Chapter 4: Renovation and Revolution ................................... 93 Chapter 5: Cold War Revival and Ideological Muddle ............141 Chapter 6: The Icarus Decade ............................................... 175 Chapter 7: Caught in Irons ................................................... 203 Chapter 8: Conclusion .......................................................... 229 Appendix: Aeronautics Budget 235 The NASA History Series 241 Index 259 v ACKNOWLEDGMENTS Before naming individuals, I must express my gratitude to those who have labored, and continue to do so, to preserve and share NASA’s history. I came to this project after years of studying private industry, where sources are rare and often inaccessible. By contrast, NASA’s History Program Office and its peers at the laboratories have been toiling for five decades, archiving, cataloging, interviewing, supporting research, and underwriting authors. -
A Perspective on the South African Flow of Funds Compilation – Theory and Analysis
A perspective on the South African flow of funds compilation – theory and analysis Barend de Beer,1 Nonhlanhla Nhlapo2 and Zeph Nhleko3 1. Introduction The National Financial Account (NFA), also known as flow of funds (FoF), is a financial analysis system that shows the uses of savings and other sources of funds as well as borrowings of funds by institutions to finance real or financial investment through financial instruments. It represents the systematic recording of financial transactions between different sectors of the economy, with the aim of assisting policymakers in assessing the financial position of the national economy as well as subsectors of the economy. The NFA is an extension of the national income and production accounts, as it provides information on financial flows in addition to real economic activity. The South African Reserve Bank (SARB) is the official compiler of South Africa’s NFA. South Africa has a complex financial system4 that consists of several institutional sectors. For the purposes of compiling the FoF, economic activity and transactions between resident and non-resident units must be recorded. The rest of the world is defined as the foreign institutional sector while resident institutional units are grouped into the private sector and the public sector. The private sector consists of institutional units not controlled or owned by institutional units in the general government sector. The public sector consists of institutional units in the general government sector and corporate institutional units in the financial and non-financial sectors owned or controlled by units in the general government sector. The public sector therefore consists of the public financial business enterprises, public non- financial business enterprises and the general government. -
Thespectator N[ W S Present Pope Cuts Protested Turns Back the Clock - Lernoux Bybodettepenning Staff Reporter
Seattle nivU ersity ScholarWorks @ SeattleU The peS ctator 5-18-1989 Spectator 1989-05-18 Editors of The pS ectator Follow this and additional works at: http://scholarworks.seattleu.edu/spectator Recommended Citation Editors of The peS ctator, "Spectator 1989-05-18" (1989). The Spectator. 1833. http://scholarworks.seattleu.edu/spectator/1833 This Newspaper is brought to you for free and open access by ScholarWorks @ SeattleU. It has been accepted for inclusion in The peS ctator by an authorized administrator of ScholarWorks @ SeattleU. McGowan SU's year SU choir profiled in sports performs —p. 5 -pp. 6-7 -p. 8 Ml Non-Profit Org. 2 im U.S.POSTAGEPAID Seattle,WA the PermitNo.2783 Spectator May 18, 1989 SEATILEUN I V E I S I T V ASSUreviews this year's ups and downs TheRepresentativeCouncil ofASSU andorganizations, saidSteve Cummins, devoted a portion of its meeting last executive vicepresident,whonoted that Friday to reviewing its there were approximately 15 new orre- accomplishments andshortcomings this startup clubs this year. year. He expressed satisfaction with the In addition to theState of the Student accomplishment andsaida new funding process, which received high marks mechanism due tobe passed in the next from faculty,staff andadministrators for couple of weeks will allow even more Robert Heilbroner speaks to faculty members at a meeting Tuesday. the substantial documentation and groups to be funded by A.SSU next specific nature of its recommendations year. for student needs, thegroupas a whoJe "We've initiated a change in the expressed satisfaction with its work budgeting system so that we can allow Heilbroner visit drafting various codes and increasing for fund raising," Cummins said. -
Financialization Revisited: the Rise and Fall of Finance-Led Capitalism *
Original articles Economia e Sociedade, Campinas, Unicamp. IE. http://dx.doi.org/10.1590/1982-3533.2017v26n4art2 Financialization revisited: the rise and fall of finance-led capitalism Robert Guttmann ** Abstract Financialization, expressing the growing importance of finance in the modus operandi of our capitalist system, has emerged as a key concept in various heterodox approaches over the last dozen years – be they Post-Keynesians (E. Stockhammer, E. Hein), American Radicals (G. Epstein, G. Krippner), Marxists (J. Bellamy Foster, G. Dumenil) or French Régulationists (M. Aglietta, R. Boyer). But until now those various analysts have each looked at this very complex phenomenon from one or the other specific angle. In this article, I am trying to provide a more comprehensive analysis of financialization by tracing its two primary drivers – structural changes making non-financial actors more dependent on debt-financing as well as financial-income sources (“financial centralization”) while also giving increased weight to the financial sector in the economy (“financial concentration”). The complex interaction between financial centralization and financial concentration has yielded a financialized growth dynamic fueling consecutive debt-financed asset bubbles in the center, the United States, that spurs export-led growth in the periphery. Framing this financialized growth dynamic in the Régulationist context as a historically conditioned accumulation regime, finance-led capitalism, I analyze its rise (1982 – 2007) in the wake of key changes in finance and its subsequent structural crisis (2007-2012) to provide a more complete approach to the crucial phenomenon of financialization. Keywords: Financialization; Finance-led capitalism; Securitization; Shadow banking; US dollar as world money. -
Reducing Systemic Risk: the Role of Money Market Mutual Funds As Substitutes for Federally Insured Bank Deposits
Reducing Systemic Risk: The Role of Money Market Mutual Funds as Substitutes for Federally Insured Bank Deposits Jonathan Macey† Table of Contents I. Introduction……………...……………………………………………….………… 2 II. A Brief History of the Money Market Mutual Fund Industry………..………… 10 III. Money Market Mutual Funds and the Financial Crisis……………………… 18 IV. Advantages of Money Market Mutual Funds……………………………………. 29 V. The Current Regulation of Money Market Mutual Funds………….………….. 45 VI. Proposed Reforms To Money Market Mutual Fund Regulation……………… 52 VII. Conclusion……………………………………………………………...…………. 61 Abstract In the wake of the events of September 2008, money market mutual funds have made significant changes to the way they invest. Those changes have been driven by business and investment needs as well as by substantial revisions to the regulatory framework in which funds operate. Yet, some policymakers and market participants are calling for additional regulatory or legislative action. This paper lays out the important role that money market mutual funds play in the short-term capital markets, traces the successful regulatory history of money market mutual funds and argues that suggested reforms would create, rather than reduce, systemic risk. † Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School and Yale School of Management. The author thanks Fidelity Management & Research Company for data and research support. 1 I. Introduction In the wake of the 2008-2009 financial crisis regulators and market participants have been focused on the perceived vulnerability of money market mutual funds (MMFs) to systemic risk. The Securities and Exchange Commission has begun to reassess the riskiness of MMFs.2 More recently, the Treasury Department directed the President’s Working Group (PWG) on Financial Markets to analyze how further to reduce the systemic risk that MMFs may pose to the economy.3 The point of this Article is to analyze MMFs and to show that, viewed properly, such funds significantly reduce systemic risk. -
Baker Library Core Collection 2/15/07
Baker Library Core Collection 2/15/07 1 Baker Library Core Collection - 2/15/07 TITLE AUTHOR DISPLAY CALL_NO Advanced modelling in finance using Excel and VBA / Mary Jackson and Mike Staunton. Jackson, Mary, 1936- HG173 .J24 2001 "You can't enlarge the pie" : six barriers to effective government / Max H. Bazerman, Jonathan Baron, Katherine Shonk. Bazerman, Max H. JK468.P64 B39 2001 100 billion allowance : accessing the global teen market / Elissa Moses. Moses, Elissa. HF5415.32 .M673 2000 20/20 foresight : crafting strategy in an uncertain world / Hugh Courtney. Courtney, Hugh, 1963- HD30.28 .C6965 2001 21 irrefutable laws of leadership : follow them and people will follow you / John C. Maxwell. Maxwell, John C., 1947- HD57.7 .M3937 1998 22 immutable laws of branding : how to build a product or service into a world-class brand / Al Ries and Laura Ries. Ries, Al. HD69.B7 R537 1998 25 investment classics : insights from the greatest investment books of all time / Leo Gough. Gough, Leo. HG4521 .G663 1998 29 leadership secrets from Jack Welch / by Robert Slater. Slater, Robert, 1943- HD57.7 .S568 2003 3-D negotiation : powerful tools to change the game in your most important deals / David A. Lax and James K. Sebenius. Lax, David A. HD58.6 .L388 2006 360 degree brand in Asia : creating more effective marketing communications / by Mark Blair, Richard Armstrong, Mike Murphy. Blair, Mark. HF5415.123 .B555 2003 45 effective ways for hiring smart! : how to predict winners and losers in the incredibly expensive people-reading game / by Pierre Mornell ; designed by Kit Hinrichs ; illustrations by Regan Dunnick. -
2: International Flow of Funds
2: International Flow of Funds International business is facilitated by markets that al- even signal potential shifts in specifi c exchange low for the fl ow of funds between countries. The trans- rates. actions arising from international business cause money The specific objectives of this chapter are to: fl ows from one country to another. The balance of pay- I explain the key components of the balance of ments is a measure of international money fl ows and is payments, discussed in this chapter. I explain how international trade flows are influenced by Financial managers of MNCs monitor the balance of economic factors and other factors, and payments so that they can determine how the fl ow of I international transactions is changing over time. explain how international capital flows are influenced by country characteristics. The balance of payments can indicate the volume of transactions between specifi c countries and may Balance of Payments The balance of payments is a summary of transactions between domestic and foreign residents for a specifi c country over a specifi ed period of time. It represents an ac- counting of a country’s international transactions for a period, usually a quarter or a year. It accounts for transactions by businesses, individuals, and the government. A balance-of-payments statement can be broken down into various components. Those that receive the most attention are the current account and the capital account. The current account represents a summary of the fl ow of funds between one specifi ed country and all other countries due to purchases of goods or services, or the provision of income on fi nancial assets. -
Economists As Worldly Philosophers
December, 2010 Economists as Worldly Philosophers By ROBERT J. SHILLER AND VIRGINIA M. SHILLER1 In his influential 1953 book The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers, Robert Heilbroner gave an inspirational account of what economists do, an account that was assigned as supplemental reading to countless beginning economics students over decades. Heilbroner wrote that he chose the term “worldly philosophers” because of the breadth and moral depth of economists’ inquiry. The appellation stuck, and for many years it was common to refer to economists as worldly philosophers. The inspiration of that book has contributed to the desire for many to go on to become economists, and to productive lives as researchers. But, while the volume of research turned out by economists is most impressive, there are questions whether “worldly” and “philosophical” are represented as much as they should be in economic research. Has economics as a profession substantially lost sight of the idealism that existed in earlier decades? Has the strong impulse to pursue narrow specialization in order to propel research to the frontier led to some loss of moral perspective? The financial crisis that started in 2007 and that continues today is widely taken in the popular press as evidence of a lapse, moral or otherwise, in the wisdom and judgment of the economics profession. Why was it that the profession as a whole failed to anticipate and raise any warning about the biggest financial crisis in the better part of a century? Countless critics *Cowles Foundation for Research in Economics, Yale University, Box 208281 Yale Station, New Haven CT 06520 and NBER, Child Study Center, Yale University, 230 South Frontage Road New Haven, CT 06510 1 from outside the profession think the models that economists relied upon were too rarified or specialized to allow most economists to see the big picture and to sound the alarm about problems that were developing.