microfoundations.org

The need for reform after the demise of Credit Suisse

ylemaster — Fri, 01 Sep 2023 08:30:50 +0000

In mid-March 2023, Credit Suisse ceased to exist as an independent bank. This was preceded by many scandals and two massive “bank runs”. The bank was then merged with UBS with government support. Subsequently, the Federal Council appointed a group of experts to deal with strategic issues of financial stability and the problem of “too big to fail” banks. On too-big-to-fail.ch you will find the…

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Collateral Framework: Liquidity Premia and Multiple Equilibria

ylemaster — Wed, 22 Mar 2023 07:00:06 +0000

Yvan Lengwiler and Athanasios Orphanides (2023). Journal of Money, Credit, and Banking, 56 (2-3), 489-516. Central banks normally accept debt of their own governments as collateral in liquidity operations without reservations. This gives rise to a valuable liquidity premium that reduces the cost of government finance. The ECB is an interesting exception in this respect.… Read More »

Climate Protection versus Economic Convergence?

ylemaster — Sat, 04 Dec 2021 11:00:06 +0000

Yvan Lengwiler (2021). WWZ Working Paper No. 2021-12. Global economic convergence and protection of the climate are both worthwhile goals. Yet, there is an inherent tension between them. Greenhouse gases are a waste product that is often emitted in the production process. Limiting such emissions therefore hampers the accumulation of income and capital. I expand… Read More »

The SNB Observatory

ylemaster — Wed, 16 Dec 2020 07:30:00 +0000

Monetary policy is important. It has broad effects across the economy, affecting young and old, poor and rich, savers, home buyers, firms and workers, profits and wages, the business cycle, and the long-term prosperity of the country. Public debate about monetary policy is vital not only for basic democratic reasons, but also for the SNB to explain its views, and to listen to the views of the…

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Contributions to the Matlab File Exchange

ylemaster — Tue, 08 Dec 2020 18:07:06 +0000

I sometimes post code that I have found useful in my work on the file exchange website of Mathworks. My programs include a simple copy/paste function, a shell for the X-13 seasonal adjustment to be used in Matlab, a Gini coefficient and Lorenz curve function, programs for importing some popular economic databases, etc. To see… Read More »

Options for the ECB’s monetary policy strategy review

ylemaster — Wed, 30 Sep 2020 06:00:01 +0000

Lengwiler, Yvan und Orphanides, Athanasios. (2020) European Parliament, ECON Committee (Study). The ECB is the most important institution for the success of the EMU. It started successfully but the crisis revealed weaknesses related to the incomplete nature of the EMU.The ECB was too timid in using its power, which deepened the euro crisis and led… Read More »

Blacking Out

ylemaster — Wed, 06 May 2020 06:00:56 +0000

Yvan Lengwiler (2020). Swiss Journal of Economics and Statistics. Springer, 156(7), 1-10. The partial shutdown of the economy following the outbreak of the COVID-19 pandemic has highlighted the lack of measurements of economic activity that are available with a short lag and at high frequency. The consumption of electricity turns out to be a valuable… Read More »

US-Bussen gegen Schweizer Banken: Wie viel kostete der Ablass?

ylemaster — Mon, 24 Jun 2019 06:00:46 +0000

Die Volkswirtschaft, 2010-04-01 Das Schweizer Bankgeheimnis war jahrzehntelang ein wichtiger Bestandteil des rechtlichen Rahmens, in dem Banken in der Schweiz operierten. Mit einer geschickten Strategie gelang dem amerikanischen Justizministerium, woran die EU und die OECD scheiterten: die Schweiz zur Aufgabe des Bankgeheimnisses zu zwingen. Wir haben untersucht, wie dies vonstattenging und welche Faktoren die Höhe… Read More »

The U.S. tax program for Swiss banks: What determined the penalties?

ylemaster — Mon, 17 Dec 2018 20:31:22 +0000

Yvan Lengwiler und Albana Saljihaj (2018). Swiss Journal of Economics and Statistics, Springer Verlag, 154(23), 1-12. The U.S. Tax Program for Swiss banks is a very significant part of the recent history of the Swiss financial industry. It has accelerated the transformation of the Swiss banking industry from a system that relied on bank secrecy… Read More »

Credit from the monopoly bank

ylemaster — Wed, 02 Aug 2017 06:00:57 +0000

Yvan Lengwiler and Kumar Rishabh (2017). WWZ Working Paper No. 2017/15. We establish that a monopoly bank never uses collateral as a screening device. A pooling equilibrium always exists in which all borrowers pay the same interest rate and put zero collateral. Absence of screening leads to socially inefficient lending in the sense that some… Read More »