Financial Markets

Financial Markets

Research

Jason E. Taylor, Andrea Castillo | Jan 13, 2015
A new study published by the Mercatus Center at George Mason University examines the use of expansionary fiscal policy to stimulate a contracting economy. The study concludes that attempts to use fiscal policy to solve broader economic troubles have failed even by the theory proponents’ own standards. In addition to being poorly timed and targeted, stimulus spending has led to permanent increases in the size and scope of government.
Hester Peirce | Jan 06, 2015
In a new paper for the Mercatus Center at George Mason University, senior research fellow Hester Peirce demonstrates that FINRA is not structured in a way to produce high-quality regulation and is not accountable to the government, the industry, or the public.
Alexander Salter | Dec 04, 2014
In a new study for the Mercatus Center at George Mason University, scholar Alexander William Salter examines several different proposed rules that the Fed could follow. Salter provides a framework to help policymakers better understand how incentives and information can affect monetary policy and discusses discretion-based and rule-based approaches to monetary policy.
Hester Peirce | Nov 07, 2014
In a new study for the Mercatus Center at George Mason University, scholar Hester Peirce shows that such methods undermine public confidence in the regulatory process and harm regulated industries’ compliance efforts due to uncertain requirements and an ever-changing regulatory landscape.
Jeffrey Rogers Hummel | Sep 16, 2014
Many economists and economic commentators fear that the Federal Reserve does not have an adequate exit strategy from the quantitative easing that took place during the financial crisis. Its bloated balance sheet has allegedly left a looming monetary overhang that the Fed will not be able to manage once the economy returns to normal.
David Beckworth | Jul 10, 2014
Inflation targeting emerged in the early 1990s and soon became the dominant monetary-policy regime. It provided a much-needed nominal anchor that had been missing since the collapse of the Bretton Woods system.

Testimony & Comments

Stephen Matteo Miller | Mar 12, 2015
The Bureau should employ its statutory authority to make exceptions to suspend the credit card database program so that it can inform Congress that the costs of such programs outweigh the benefits.
Hester Peirce, Kristine Johnson | Feb 04, 2015
This comment, which reiterates concerns laid out in the attached opinion piece, does not represent the views of any particular affected party or special interest group but is designed to assist FINRA as it considers implementing the Comprehensive Automated Risk Data System (CARDS).
Hester Peirce, Vera Soliman | Sep 10, 2014
The Bureau initiated its database without due consideration of the problem the Bureau was trying to solve or the costs and benefits of the database. Rather than expanding the database’s potential to cause unintended harm, the Bureau should return to the drawing board.
Jerry Brito, Eli Dourado | Aug 14, 2014
As the Treasury Department’s Financial Crimes Enforcement Network has found, certain virtual currency businesses are money service businesses. Typically such money service businesses engage in money transmission and as a result must acquire a money transmitter license in each state in which they do business.
Hester Peirce | Jul 10, 2014
As the Federal Reserve celebrates one hundred years, reform efforts are timely. Consideration of fundamental questions about the Federal Reserve’s role in the regulatory landscape and in the markets should accompany those efforts.
Hester Peirce | May 21, 2014
The flaws in the Bureau’s design impair its ability to operate effectively for consumers. Although more fundamental reforms are needed, incremental reforms will help the Bureau to set appropriate priorities and seek relevant comments before acting. Making the agency more accountable, more transparent, and more focused will also make it more effective at ensuring that the financial system is serving the needs of consumers.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Apr 07, 2015

Last week, the Wall Street Journal reported that bank regulators are spending lots of quality time with bank boards of directors. Bank supervisors engage in extended chats with independent directors, drop in on board meetings, and otherwise size up bank boards. As John Carney pointed out in a follow-up piece this week, the result of these activities is that shareholders are no longer boards' priority.
Mar 30, 2015

As the world looks back on Lee's legacy, we should pay special attention to his contributions on responsible and effective governance over a three-decade reign as the city-state's prime minister.
Mar 27, 2015

William Lewis, Founding Director of the McKinsey Global Institute, makes a clear case for what academic research has long suggested—that is, “the power of productivity” to expand economic opportunity.
Mar 25, 2015

The Consumer Financial Protection Bureau's decision to allow consumers to post narrative descriptions of their experiences with financial institutions is not surprising, however, publishing unverified consumer narratives is not helpful to consumers. When consumers are permitted to speak with their feet in the marketplace, their voices have much greater impact than the stories they tell the CFPB.
Mar 23, 2015

The dollar’s rise is evidence of the U.S. economy’s strength. But a strong dollar hurts U.S. exports and could be a problem for emerging market economies. Last week the Federal Reserve signaled that it might start raising interest rates later this year, a move that might further strengthen the dollar. Should the Fed be concerned that the strong dollar could slow down the domestic and international economic recovery? The New York Times Room for Debate posed this question, "Should the Fed be concerned that the strong dollar could slow down the domestic and international economic recovery?"
Mar 23, 2015

In a competitive market with free entry, bank size doesn't really matter, but regulations can distort firm size. At a recent Senate Banking Committee hearing on Federal Reserve reforms, Professor Allan Meltzer suggested that bank concentration is being driven by the new regulations that disproportionately affect small banks. New charts just released by the Mercatus Center show that the bank concentration trend did not begin with Dodd-Frank, but Dodd-Frank certainly won't halt that decline either.

Charts

This week’s chart series shows that the five largest banks (by assets) in Q4 2014 held 46 percent of US banking assets and 40 percent of domestic deposits. That’s up from 28 percent and 20 percent, respectively, in early Q1 2000.

Experts

Tyler Cowen is Holbert L. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center at George Mason University. With colleague Alex Tabarrok, Cowen is coauthor of the popular economics blog Marginal Revolution and cofounder of the online educational platform Marginal Revolution University.
Garett Jones is a senior scholar and BB&T Professor for the Study of Capitalism at the Mercatus Center and an associate professor of economics at George Mason University. He specializes in macroeconomics, monetary economics, and the microfoundations of economic growth.
Arnold Kling is a Mercatus Center–affiliated senior scholar at George Mason University and a member of the Financial Markets Working Group. He specializes in housing-finance policy, financial institutions, macroeconomics, and the inside workings of America’s federal financial institutions. He also is an adjunct scholar at the Cato Institute in Washington, DC.
Stephen Matteo Miller is a senior research fellow at the Mercatus Center.
Hester Peirce is a senior research fellow at the Mercatus Center at George Mason University and director for the Financial Markets Working Group. Her primary research interests relate to the regulation of the financial markets.

Podcasts

| March 23, 2015
Stephen Miller Discusses the Decline of Small Banks Post Dodd-Frank with Tim Farley of POTUS

Upcoming Events

Recent Events

The F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center invites you to a panel discussion featuring Todd Zywicki and his new co-authored book Consumer Credit and the American Economy.

Books

Jerry Brito, Andrea Castillo | Jan 23, 2014
Como la primera moneda digital descentralizada del mundo, Bitcoin tiene el potencial de revolucionar los sistemas de pago en línea de una manera que beneficia a los consumidores y las empresas. En lugar de utilizar un intermediario, como PayPal, o entregar información de tarjeta de crédito a un tercer partido para su verificación—ya que los dos incluyen cargos de transacción y otras restricciones— Bitcoin permite que los individuos paguen directamente entre sí para bienes o servicios.

Media Clippings

Hester Peirce | Nov 13, 2014
This excerpt originally appeared in Bloomberg.
Stephen Matteo Miller | Nov 03, 2014
This excerpt originally appeared in the Washington Examiner.
Todd Zywicki | Oct 20, 2014
This excerpt originally appeared in the Washington Examiner.
Jason J. Fichtner | Jul 24, 2014
This excerpt originally appeared in FOX Business.
Jason J. Fichtner | Jul 17, 2014
This excerpt originally appeared in FOX Business.
' '