Financial system regulation and policies

• Stress Relief? Funding Structures and Resilience to the Covid Shock

  Staff Working Paper 2023-7 Kristin Forbes, Christian Friedrich, Dennis Reinhardt

  Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.

  Content Type(s): Staff research, Staff working papers Topic(s): Coronavirus disease (COVID-19), Exchange rates, Financial institutions, Financial stability, Financial system regulation and policies, International topics JEL Code(s): E, E4, E44, E6, E65, F, F3, F31, F36, F4, F42, G, G1, G18, G2, G23, G3, G38

• Mandatory Retention Rules and Bank Risk

  Staff Working Paper 2023-3 Yuteng Cheng

  This paper studies, theoretically and empirically, the unintended consequences of mandatory retention rules in securitization. It proposes a novel model showing that while retention strengthens monitoring, it may also encourage banks to shift risk.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit risk management, Financial institutions, Financial system regulation and policies JEL Code(s): G, G2, G21, G28