Financial Markets

Financial Markets

Research

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.
Jason J. Fichtner, Jacob Feldman | Jun 19, 2014
The $69 billion mortgage interest deduction (MID) is often viewed as an element of the tax code that promotes middle-class prosperity. However, 64 percent of the benefits, as measured by effective tax reduction, goes to households earning more than $100,000 per year. The large variation in nominal benefits is one of the reasons why many economists state that the MID is regressive.
James K. Glassman, Hester Peirce | Jun 18, 2014
This policy brief outlines the regulations that give PAs their power and the nature and adverse consequences of that power, and offers suggestions for reforms.

Testimony & Comments

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.
Lawrence H. White | Mar 12, 2014
So long as monetary policy is conducted in a discretionary manner, it is important to maintain the independent input of the Reserve Bank presidents on the FOMC. The Reserve Banks should therefore not become mere outposts of the Federal Reserve Board in order to eliminate commercial bankers’ representation on their boards of directors. A better way to remove the potential for conflicts of interest is to require the Federal Reserve System to leave the formation of fiscal and credit-allocation policies to Congress and their execution to the US Treasury.
Holly A. Bell | Dec 13, 2013
Enabling traders and exchanges to continue to work with regulators in a cooperative environment that recognizes the significant market incentives shared by all stakeholders to ensure trading system and market integrity is the best approach as we transition to technology-based markets.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Dec 18, 2014

How should monetary policy be conducted? What previously was a question of interest only for a subset of economists has exploded into popular debate since the 2008 financial crisis. This, no doubt, is due to the Federal Reserve's unprecedented activities during the crisis.
Dec 17, 2014

When Dodd-Frank became law more than four years ago, even its proponents acknowledged that the law needed some tweaks. After all, remaking the financial markets in the wee hours of the night fueled by cold pizza and too much caffeine is a risky undertaking. Despite acknowledged problems, the law has remained largely untouched until this month. Fixes look like capitulation to Wall Street.
Dec 09, 2014

Were we to let the financial industry make its own way during ordinary times — a way that certainly would not be without shareholder and creditor losses and firm failures — the industry would be much better equipped to handle crises on its own.
Dec 08, 2014

The gulf remains wide between Wallison and his opponents, who refuse to ascribe any blame for the crisis to Freddie Mac, Fannie Mae and other misguided government interventions in mortgage lending. A fair-minded person should at least read Wallison's book before committing wholeheartedly to an opposing narrative.
Dec 03, 2014

At a November 19 meeting, the Securities and Exchange Commission adopted Regulation Systems Compliance and Integrity (Reg SCI). The new rule requires stock exchanges and other market infrastructure providers to keep their technology functioning properly.
Nov 24, 2014

Bank overdraft protection has come under close scrutiny from the Consumer Financial Protection Bureau. This summer, several researchers at the CFPB released a study that provides information about the patterns of overdraft protection use by consumers at several large banks, focusing particularly on use by the small category of consumers who use overdraft protection regularly.

Charts

This chart depicts two data series from RegData 2.0—word counts and restriction counts. Each series contains aggregated statistics for all federal regulatory agencies that were required to engage in rulemaking by the Dodd-Frank Act of 2010.

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 program director for the Financial Markets Working Group. Her primary research interests relate to the regulation of the financial markets.

Podcasts

Hester Peirce | September 10, 2014
Hester Peirce Discusses Her Public Interest Comment on the CFPB’s Proposal to Expand Its Consumer Complaint Database

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.
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