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Banking and finance

 

  • Surveys

    Banking Conditions Survey

    Credit standards continued to tighten, and loan pricing continued to rise at an above-average pace this period.

  • Research Department Working Papers

    Deposit Convexity, Monetary Policy and Financial Stability

    Banks and researchers conventionally model the response of deposit interest rates to market interest rates as constant, implying that deposits have nearly constant duration. Contrary to this standard assumption, this paper shows empirically that the “beta” of deposit rates to market rates increases as market rates rise, causing the duration of deposits to fall.

  • Surveys

    Banking Conditions Survey

    Loan demand has been declining for a year, and the pace accelerated this period.

  • Bankers, regulators absorb lessons of Silicon Valley Bank failure as new tests emerge

    Ben Munyan, director of supervisory policy in the Banking Supervision Department at the Federal Reserve Bank of Dallas, discusses the challenges the banking industry faces in an era of rapidly rising interest rates and how Texas institutions have fared.

  • Mexican peso strength noteworthy among emerging markets during Fed tightening

    Many emerging-market currencies have depreciated modestly during the Federal Reserve’s tightening cycle that began in March 2022. The Mexican peso, however, outperformed the group during the period.

  • Research Department Working Papers

    High-Yield Debt Covenants and Their Real Effects

    Contrary to the prevailing belief that incurrence covenants offer limited protection for creditors, this paper reveals a significant and sudden decline in investment upon triggering these covenants.

  • Policy impact of unexpected Fed rate movements blurred by key information cues

    Unexpected Federal Reserve monetary policy moves can profoundly affect market participants, investors and the economy. The impact of policy stems not only from its direct effects—the traditional focus for economists—but also from the new information revealed about the Fed’s economic outlook.

  • Surveys

    Banking Conditions Survey

    Loan demand declined for the eighth period in a row, though the rate of decline eased somewhat.

  • Location, location, location: Mortgage rate impact varies by metro

    The role of individual housing markets and their sensitivity to mortgage rate changes play an important part in understanding the impact of higher rates.

  • Research Department Working Papers

    Financial Shocks in an Uncertain Economy

    This paper focuses on some of the lessons we have learned over the years: (i) uncertainty and tail risk have cyclical variation; (ii) financial shocks can have a significant effect on macroeconomic outcomes; (iii) the impact of shocks is stronger in periods of high volatility.