Working Papers
Here are some of our research reports, commentaries and working papers. We welcome your comments and questions.
Settlement Failures in Bond Markets (PDF)
In this study, we estimate the value of settlement failures in the US bond markets, including trades in US Treasury, federal agency, mortgage-backed, corporate and municipal bonds. The market for US Treasury securities offers an opportunity to refute one possible explanation for settlement failures in bond markets: the limited supply of shares available for lending. The US Treasury issued additional bonds in September 2001 in an attempt to alleviate settlement failures by increasing the pool of available bonds. FRB research, however, indicates that settlement failures were not corrected as quickly as this theory would suggest. Analyzing data from multiple sources, we estimate the total value of settlement failures in US bond markets to have been $424 billion in bonds as of December 27, 2005. On average, nearly 8% of bond trades failed to settle on time in 2005.
Commentary on Trade with China (PDF)
Most economists today blame America's trade deficit on either a lack of domestic savings or a trade imbalance with China. For starters, America just isn’t a country of savers. In the post-war period, especially since the 1960s when average Americans discovered the stock market, and now wildly so since the proliferation of on-line brokerage services, America is a country of investors.
Commentary on Interest Rates (PDF)
In my June 2004 column for USBanker I noted that cash balances in the financial sector were rising faster than those in corporate coffers. Based on that fact, I predicted there would be a surge in mergers and acquisitions. That prediction came true in spades.
