Robert Solow on 'Why Economies Grow'

Published by Anonymous (not verified) on Sun, 10/05/2020 - 9:32pm in

As a follow-up and companion piece to my previous post, I decided to publish a transcription of a lecture on economic growth by Robert Solow that I transcribed originally as an aid for friends and colleagues who were studying economics. Although the lecture was given by Prof. Solow a few years ago during the height of the financial crisis, it contains loads of timeless insights, some of which is useful to be reminded of in the current situation, as discussions about the output gap resume in the next few years (see chart).

However, it's extremely important to keep in mind that in our current predicament as a result of covid potential GDP will also likely take a huge hit, as businesses and employees require some catching up in terms of business practices (misaligned with changing consumer preferences) and job training (due to skills entropy from employees being on furlough), to name only a few aspects that are likely to be impacted. In many ways, the post-covid period will bring us back to the type of economic analysis that used to occur a long time ago when natural catastrophes had significant and frequent impacts on economies' productive capacities.

The video of the lecture is included down below, though the sound quality is very bad, which is why I recommend reading the transcription instead (and you'll get through the transcript much faster by reading it).

Key insights are highlighted in bold font. Enjoy!

The business of this course is the long run. What are the sources of economic growth in the national economy or in the larger economy? Where does growth come from? And the policy implication – well, not implication, but policy question – is ‘How do you get an economy to grow rapidly and to have that growth widely shared in the nation?’
But there is a problem – it is a problem that appeared in the slides that Prof Newstone showed. It is a problem about getting there from here. So I’m going to start by talking a little bit about right now – this is not going to be the usual stuff about the financial crisis and all that – I have something else in mind.

There is something very odd about our economic situation in the US today. I read just recently an estimate from the Federal Reserve that about $7 trillion worth of wealth has been destroyed in the last year or year in a half (in 2008-2009). The country, so to speak, is $7 trillion poorer than it was.

When I wasn’t having a conversation with Cathy in the car, I was trying to divide 7 trillion by 300 million--the population of the US--in my head. It comes to about $23,000 for every man, woman and child in the country. Some, of course, have lost more, some have lost less.

What I want to point out is how strange that is: $7 trillion of wealth has gone down the drain but the productive capacity of the US economy – the capacity of our system to produce goods and service for its people – hasn’t diminished at all. In fact, it is undoubtedly higher than it was a year ago or 18 months ago: the labour force is a couple percent larger, the skills and education and training of the population is certainly not deteriorating and have probably gained. The net investment in capital has been positive – it’s been declining – but has been positive.

So we have a bigger stock of productive capital in the economy now than we did a year ago or 18 months ago. So the productive capacity of this economy is bigger than it was, despite of this $7 trillion of disappearance of wealth. If you are thinking of buying the US economy as a gift for your boyfriend or girlfriend, it would be worth just as much as it was worth – you know, like a used car – it would be worth just about as much as it was worth a year ago.

So in that sense we haven’t lost anything at all. But, of course, the point is we are in a recession. It is one year old according to pundits. And according to other pundits, or the same pundits, it’ll continue for at least until the second half of this year and maybe beyond. And the point is we are not using the productive capacity that we have.

You saw the unemployment numbers that Professor Newstone showed you. It is a lot harder to measure excess capacity in industry than it is to measure unemployment, but there are such figures, and they show an increase in unused capacity. So we have this machine for producing the goods and services for the population and we are not making full use of it. And that under-use of economic capacity, of productive capacity will go on for a long time. Even if the economy turns up in the second half of this year we will undoubtedly finish 2010 still with some slack in the economy because the slack disappears only gradually. 

So if you are interested – now, this is the point, this is why I started this way – if we are thinking about the long run growth of the economy (which means the long run growth of its capacity to produce), it’s not a separate but it’s an analytically slightly different problem to make sure that that capacity is used.

As long as we are not using all of the capacity that we have, the economy and the decision-makers in the economy are not likely to be motivated to do the things that increase potential output, that increase the productive capacity very rapidly.

So the short-run order of business – policy business – for us and every other rich country in Europe or Asia right now is to close that gap or narrow that gap between productive capacity and actual output, which means fundamentally trying to increase the demand for goods and services. And to do that in a way that at least doesn’t create obstacles to the long-run growth of the economy once the gap is closed, and maybe does some things that will help it.

So, imagine it is now January 2011 and the American economy and the economies of the other rich countries – developed countries of the world – are prospering reasonably well, are using their capacity, have closed that gap. Then the question is: What makes them grow? What economic activities that take place have the effect of increasing the capacity of the economy to produce useful goods and services? 

Now, you won’t be surprised – in fact, I’m staring at this monitor here and it says: so what determines the rate of economic growth in the economy? And that’s the question that I want to come to now, and it becomes relevant after we have done the short run task of closing that gap. There isn’t any one word or two word answer to that question. 

And I should make it explicit that I am thinking now about what determines the rate of economic growth in a rich economy, in an advanced industrial economy. I am not thinking about developing economies where the answers are related but the answers are somewhat different.

And the truth is that for an advanced economy the answers to that question – what are the sources of growth of national output, of productive capacity – are really the usual suspects. They are things we have known about now for quite a long time. And basically, what matters is what you might describe as investment in a very broad sense. I have to emphasize “in a very broad sense”.

What increases the productive of an economy like ours is investment in physical capital, in machinery, in computers and all the rest of that, investment in what economists call human capital, meaning skills and capacities of workers and people who work in the economy, and investment in new technology.

And here there is a slight difference between the US and even most of the countries in Europe. Not quite across the board but in most branches of industry the US is the technological leader. The gap was very big at the end of the Second World War and has closed considerably. But still, if you look at sector by sector, with some exceptions, the US is the technological leader.

Other countries of the world, that were even fairly rich countries have the luxury of being able to acquire technology by innovation, essentially by adopting, using what is already known. This country (i.e., the US) is in the position of having – so to speak – to invent its own future.

So basically, if we are looking now at the US, the things we have to look after in order to have a successful fairly high rate of growth (we can talk about the equity issues later) are a high rate of savings and investment in plant and equipment. I’d rather have the saving done here than abroad so that, in effect, the capital equipment that is built by investment in this country is owned in this country, and the returns to it stay in this country. It’s not necessary but it’s probably desirable. 

We need an extraordinary amount of emphasis – and we’ll talk more about this later – on investment in human capital, on producing the labour force that has the skills that are necessary to successfully operate that plant and equipment. And that is especially important because a country like this also has to invest in new technology. There is no place it can copy from – it has to in most cases create it itself.

Now, when I say new technology, the phrase tends to have a “high tech” air about it. But I don’t mean it that way.  New technology needn’t be high tech. It turns out that – in many ways – the most important contributors to productivity in the US over the last decade or two have been the application of information technology to wholesale trade, retail trade and financial services.

In fact, there are studies trying to understand why the major, big European economies, Germany, France, UK and Italy have lagged behind the US in productivity terms, general productivity terms. And the common answer seems to be that they have been slow to adapt the information technology to the service sectors. In manufacturing, there is very little gap, if any. But the gap is in the service sectors. 

So, this is extremely important. And I want to emphasize it, even at the risk of some repetition. One of the standard, valid, almost universal generalizations about the way people behave economically is that technically the income elasticity of the demand for services is high. All over the world, as incomes rise, personal incomes rise, people want to spend, [and] choose to spend a larger fraction of that income on services rather than goods. And you can understand why that should be so.

So this means that most of the rapidly growing advanced economies grow more rapidly in the service-producing sectors than in the goods-producing sector. There are exceptions to that. A country like Germany – to a lesser extent Japan, or formally Japan, not so much anymore – has a strong bias toward trying to make its living from simply exporting high quality manufactured goods. You notice I said exporting because the population of Germany, like the population of anywhere else, wants to consume services as it gets rich, not goods.

So those are the things, the essentially important things that a country like the US needs to do to generate long-run growth of productive capacity. 

I should say, in terms of policy, that you should beware of any universal advice like “well, the market will take care of that”. You know, if the alternative to the free-market economy is some kind of central planning, there is no question to where the advantage lies. But there is absolutely no evidence in the historical record of the advanced economies that zero regulation or weak regulation of industry is somehow conducive to rapid growth, or that minimal involvement of the government in the economy is conducive to rapid growth.

The functions of the government in terms of long run growth are just what you would deduce from what I have already said: promoting research and development, providing incentives for investment when they are lacking, taking care of education, and looking after mobility. By the way, it is probably also true that a country – there is less evidence for this generalization, but it’s probably also true – that business cycle instability is bad for economic growth.

For countries that are given to wide fluctuations like the ones we were looking at a few minutes ago, that’s not helpful for long-run growth because it adds to uncertainty. The likelihood of broad fluctuations adds to uncertainty is bad for all forward looking activities, like investment, like mobility, like education.

I wanted to say one more thing about the issue of mobility. When I say mobility, I mean industrial mobility and occupational mobility. In a rapidly growing, technologically-based economy, people have to change the nature of their jobs frequently and capital has to flow freely from obsolescent industries to new industries.

It is very important when you come in this course to talk about issues of equity. I think it is very important to find ways so that the burdens that are associated with necessary mobility don’t fall on workers and other people who are ill-equipped to prepare them [for that eventuality].

Dislocation and sometimes dislocation is probably an inevitable part of fast, mainly technologically-based growth. But it is the task of economic policy to find ways of combining that with income security, up to now, where it’s mostly below the median for incomes.

What things shouldn’t we be wasting this crisis on?

Published by Anonymous (not verified) on Fri, 27/03/2020 - 2:00pm in

Not sure Winston ever said that, but it sounds like the kind of thing he might have said. Quote investigator doesn’t tell me sadly. Grateful for any others’ researches in comments below.

The subject of this post has been a theme of some conversations I’ve had with some people in Canberra. What things should we have been doing before the crisis that the crisis concentrates the mind sufficiently to try to do now? And what things should we have been thinking of, but weren’t till the crisis arrived?

Though lots of things need to be done quickly and needn’t have some long-term game plan attached, it’s worth thinking about what long-term benefits might come. Doubling the dole, I’m hoping will make it more likely that when the payment is ‘normalised’ it goes back to a more humane level than it was at. There will be little need for the government to be stingy with it when it’s trying to engineer a recovery in six or more months time.

The Commonwealth being the government with the big tax base and a central bank sitting behind it should be offering broad underwriting of State schemes of tax relief. It might hopefully use that to bring about some rationalisation of state and federal taxes at the end of the process – and closer cooperation between states and the feds – for instance allowing the Commonwealth to collect tax for the states to simplify administration for businesses.

Then there’s regulation.

For instance, there’s a venture to develop a coronavirus vaccine at UQ (which as Paul Frijters can attest is notorious for its unethical experiments on innocent – but slightly racist – bus drivers). Others will know the details better than me but I’ve always been struck by the way in which safety and efficacy seem to be far entangled with each other in regulatory approval of pharmaceuticals than they need to be. I’d expect there are large and now urgently needed and easily understood gains to be made in that regard.

An example of the kind of thing I’m talking about is the taking of Hydroxy Chloroquinine. We have decades of experience of this as an anti-malarial drug. In fact, while we were getting the experience, so were the mosquitoes and they’re pretty much over it by now. There are only a few places where the drug actually works against malaria. But we’ve got lots of experience with it so we can prescribe it and supervise the safety of using it.

If it’s promising there should be field trials of it right now. We can run a randomised controlled trial inside a hospital giving the drug to one large group of medical professionals and a placebo to another large group. We’d learn lots and fast. There are lots of other sensible experiments that could be run.

In such circumstances, with proper communication, there should not be strong resistance to any of this – as it will enhance and be seen to enhance saftey. There’s the additional issue of the extent to which one should trade off the safety of some treatment – in this case a vaccine or other treatments of COVID-19 – with the lives that are lost from delay in releasing/adopting it. These decisions are made now. And it’s easy to say that the medical regulators are risk-averse. Generally speaking, they should be. But right now it doesn’t take a genius to work out whose risk they’re minimising. Their own, that’s who.

Regulators have careers and over an appreciable period of time, their skin in the game gradually comes to dominate that of others. Decisions get made for them, and not the people for whose benefit they’re regulating. To get round this, I’d identify a class of medically trained people (specialists, doctors and nurses) and informed people from the community from whom I’d choose at random a board of decision-makers. I’d go with any decision for which there was a strong majority of say 2/3rds or more – or perhaps a weaker majority subject to an appeal to another similar body in the event of any strong dissent. Anyway, I’m just sketching things here.

In any event, it seems to me that now might be a time when governments might be prepared to actually try to think about regulating safety from the wider perspective of maximising the lives saved and minimising suffering.

If medical staff become overwhelmed, or even just seriously stretched, there’s a need to consider how one trains people to help them out. There are lots of things nurses do that could be done by people quickly trained to do those things – taking temperatures, giving injections. They might also be trained to administer complex machines in fairly routine ways whilst being trained in detecting things that need escalation. Often these things simply go by the board for lack of staff resourcing now.

Those nurses who were up to it could also have expanded duties. There’s been skirmishing between nurses and doctors for decades with functions kept off nurses for no better reason than to protect the doctors union and prop up demand for their services. As I understand it, some mild progress has been made over the last decade or so, but I expect plenty more could be done.

I’d like to take the high ground here. Currently, the rules get haggled over, but there’s not much regard for independent or evidence-based decisions. There could be better and worse ways of operationalising this. As an illustration, I’d suggest this:  For the duration of the crisis some independent arrangement would be put in place to oversee improvisation at the hospital level. That is, as the need arose, doctors, nurses and hospital administrators could work out any arrangement they considered was appropriate in the circumstances. (One might want a board of the kind I sketched out above).

Leglisation would be passed protecting all participants from any negligence claims arising from any changes to the demarcations in the division of medical labour where those changes were agreed in a way that complied with the method that had been agreed upon the accepted way of making them. These changes and how they were made would be registered in some national database to ensure transparency and the ability of different institutions to learn from one another. Efforts should be made to measure the safety of the resulting system.

Something similar should happen regarding the division of labour in nursing homes, not just of the medical staff, but also of other staff. Changes should only be made if there is competent monitoring of outcomes and an independent body judges that it is in the interests of the patients all things considered.

Another area in which progress has always been much slower than people expected – like regulation review – has been teleworking. Since the telephone people have predicted a surge in work from home, but it’s amazing how slowly it’s happened. The same is true of distance education – and the replacement of universities by MOOCs.

If I seem fairly vague about what the answers are here – that’s because I am. But these are areas in which we need to discover more answers than we have. I doubt they can be solved using top-down approaches so we should be funding experiments. Since we don’t have any choice but to ramp up these activities very aggressively, we should be making funding available for a lot of human-centred design activity to try to figure out how we can make these systems more human, improve feedback over them, and community building over them. As with the more streamlined regulation discussed above, having some national clearinghouse of successful and less successful experience in an attempt to seed a national knowledge commons on these things could be helpful. Governments could also negotiate with the providers of software as a service in ways that could improve the power of such a knowledge commons as I sketched out here.

Anyway … In those areas I’ve identified there must be lots of other good ideas. Any ideas? And what other areas should we be looking at?




6 post-Corona Institutional questions

Published by Anonymous (not verified) on Thu, 26/03/2020 - 11:34pm in

The mass hysteria of the corona crisis is raging, with the resulting self-isolation of whole economies and populations. The loss seems greater with every new forecast on the economic collapse than I initially thought, and the benefit of imprisoning and terrorizing the population smaller than I initially thought, leading courageous little Sweden to forego these options. High-level media and calm commentators are waking up to the longer-term implications, though the population is still too overcome by fear.

I want to share 6 areas where we should think of international institutional reform to prevent another hysteria like the one we are going through now. I don’t want to presume any answers but simply want to hear your thoughts and suggestions, so am merely laying out the challenges.

They are: i) How to diminish the normality of apocalyptic thinking, ii) How to read China better, iii) How to prevent international contagion of panic through social and regular media better, iv) How to reduce the fragility of international supply chains, v) How to foster better cooperation between countries in the EU, and vi) How to regain our lost freedom and reason.

Over the fold I explain them in more detail.


  1. The cult of the apocalypse. This crisis laid bare that large parts of the population and the scientific community, not just epidemiologists, have really bought into some notion of extreme emergencies for which a totalitarian response is needed. Via petitions and the media have these people loudly called for draconian measures, based on little evidence that this would work or no evidence that it would do more good than bad. The world has up till now shrugged its shoulders over the various doom scenarios dreamed up by scientists, including “extinction due to climate change”, “killer asteroids”, “nuclear devastation”, “run-away robots”, and a whole host of other scenarios you might recognise from disaster movies. This time the population went along with one such story, leading to devastating losses as the ‘cure’ turned out to be far more deadly and destructive than ‘the problem’. How do we reduce the prevalence and growth of these doomsday cults?
  2. Understanding China. The Chinese government showed the world the example of how to be totalitarian about a disease, and their example proved infectious. Understanding in the West as to why the Chinese did this was extremely limited, but we looked up to them anyway and several governments simply followed their example. We need to learn how China truly operates and stop imagining they are like us. The Chinese have a long history of disastrous totalitarian projects, like the Great Leap Forward or the Cultural Revolution, and we should learn why they do this, in order to avoid following their example, not copy them.
  3. Contagion of panics via social media and the regular media. This was first and foremost the biggest mass hysteria event in history, fed by a connected media. Even in India, which is far too warm for this virus to do much damage and where there are hence almost no recorded cases, the population has become scared enough to loudly call for draconian measures, leading to the madness of locking down hundreds of millions of extremely poor people who have no savings and no income to buy food. We need to think hard about how to make contagion of these panics harder and slower, not just for pandemics but also the many other global fears (financial, military, ethnic, religious). This will require thinking about the architecture of media, the internet, mobile telephony, etc. It is not easy to see what can be done.
  4. The fragility of international supply chains. The huge recessions of 1929 in the West, and 1990 in Eastern Europe taught us that broken supply chains are very hard to rebuild in a hurry. Companies and industries make very particular investments that form a link, and if some of the pieces in the chain break, the whole chain cannot function, disbands, and very quickly loses the knowledge to re-form as parts go their separate ways[1]. We should think of what we could do to make the supply chains less fragile to disruption: how do we build more slack into the system?
  5. International cooperation. As Harari pointed out in the Financial Times, international cooperation has broken down during this crisis. Even in the EU, countries went their own way, not caring about the disruption to partners of their own actions. This is also what happened in 1929 and in Eastern Europe in 1990, to the loss of all. We have learned again that only nation states remain cohesive and take collective decisions. What to do about it?
  6. How to regain respect for freedom, privacy, own reason, the fallability of expert advice, etc.? This hysteria has cost the West, which is the audience we on this blog overwhelmingly belong to, much of the best we had to offer the world. For the sake of fear have we loudly demanded totalitarianism, invasive top-down monitoring, top-down rules on who is important and who should do what, and adopted the fantasies of experts who had no more idea about the balance of the effects of what they proposed than anyone else. How to regain and more stringently hold on to our ideals and our reason?

I have preliminary suggestions on these but want to hear your thoughts. Also importantly, what other international institutional challenges do you see needing to be addressed once this hysteria passes and the West wakes up to the loss it has inflicted on itself?

[1Because this stuff is too hard to put in an easy macro-model (though you can do it in micro models, see here), mainstream economics hasnt managed to incorporate these lessons into its canon and has thus once again missed the importance of this when the crisis hit.]

Have the Risk Profiles of Large U.S. Bank Holding Companies Changed?

Published by Anonymous (not verified) on Mon, 03/02/2020 - 11:00pm in


banks, Regulation

Ricardo Correa, Linda Goldberg, and Kevin Lai

Have the Risk Profiles of Large U.S. Bank Holding Companies Changed?

After the global financial crisis, regulatory changes were implemented to support financial stability, with some changes directly addressing capital and liquidity in bank holding companies (BHCs) and others targeting BHC size and complexity. Although the overall size of the largest U.S. BHCs has not decreased since the crisis, the organizational complexity of these same organizations has declined, with less notable changes being observed in their range of businesses and geographic scope (Goldberg and Meehl, forthcoming). In this post, we explore how different types of BHC risks—risks that can influence the probability that a BHC is stressed, as well as the chance of systemic implications—have changed over time. The results are mixed: Levels of most BHC risks tend to be higher than in the years immediately preceding the crisis, but are markedly lower than the levels seen during and immediately following the crisis.

Types of BHC Risks

We focus on BHCs with more than $25 billion in assets and consider the evolution of risks from the first quarter of 2000 to the second quarter of 2018. The specific sample of BHCs included in this analysis varies over time and consists of about thirty-five BHCs at most dates, although fewer in the early 2000s. We highlight four types of contributions of BHC risk measures:

  • BHC idiosyncratic risk, as measured by the z-score and defined as the ratio of the BHC’s return on assets plus the average equity ratio relative to the standard deviation of return on assets calculated over a twelve-quarter period;
  • BHC liquidity risk exposure, as proxied by the correlation between BHC equity returns and a funding cost spread, the LIBOR-OIS spread (multiplied by minus one), over a six-month rolling period; a larger correlation reflects higher levels of liquidity risk, capturing the sensitivity of BHC stock returns to liquidity strains;
  • Systematic risk, which is that component of total risk that is not diversifiable relative to the overall stock market and is measured by using the dynamic market beta from Engle (2016), which shows the covariance between BHC and S&P 500 returns; and
  • Systemic risk, as measured by SRISK of Brownlees and Engle (2017), which captures the expected capital shortfall of a bank conditional on a decline of 40 percent in the stock market index.

How Risky Are U.S. BHCs Now?

For stock-taking purposes, we group the large U.S. BHCs into size bins by assets, either between $25 billion and $250 billion, or over $250 billion. The larger-size BHCs have to comply with more stringent capital and liquidity requirements, extensive stress testing, and detailed resolution planning, including living will plans, in accordance with the Dodd-Frank Act.

The evidence is presented in two ways. First, time series visualizations show the evolution of risk for the average BHC in each size bin at each date (see the four panels below). While overall trends are reported, this approach mixes changes in risk features with changes in the composition of BHCs in each bin at each date. The second set of visualizations (see the four box-and-whisker panels further down in the post) isolates the change in BHC risk features by capturing the evolution of the risk measures for the BHCs that are in the sample in both the pre- and post-crisis periods.

Have the Risk Profiles of Large U.S. Bank Holding Companies Changed?

On average, BHC risk metrics increased sharply during and in the years immediately after the crisis, before trending down for both size buckets after passage of the Dodd-Frank Act in 2010 and the phase-in of related regulatory changes. The idiosyncratic risk of BHCs, captured by the z-score, has trended downward since the financial crisis, albeit more rapidly for smaller BHCs. Liquidity risks have, on average, been similar across BHCs of both size buckets.

Systematic risk, the market beta for BHCs, was close to one in the period prior to the crisis, but then rose sharply and became more volatile during and in the years after the crisis. As with idiosyncratic risk, systematic risk declined after 2012, with a more moderate uptick in 2015. In the most recent years, systematic risk trended back toward one across all banks, reflecting weaker co-movements between BHC equity returns and market returns.

Systemic risk at BHCs, as captured by SRISK, was assessed, on average, as relatively low in the pre-crisis period. The average SRISK of BHCs spiked around the crisis for institutions with assets above $250 billion, but the measures have fallen since then, implying that the expected capital shortfall (conditional on a large market downturn) decreased during the post-crisis period. By 2019, systemic risk returned to pre-crisis levels. BHCs below $250 billion in assets have, as expected, smaller systemic risks.

These general trends by asset category combine risk changes at the institution level with the potential entrance of new BHCs in each size bucket. The panels below disentangle these two effects, by reporting the distribution of the differences in risk metrics between the pre-crisis (2000-07), crisis (2008-12), and post-crisis (2013-18) periods for each individual BHC, by asset size group (calculated using data from 2013-18). The differences in the BHC risk measures between the post-crisis and pre-crisis periods are shown in blue, while the differences between the post-crisis and crisis periods are shown in red.

Have the Risk Profiles of Large U.S. Bank Holding Companies Changed?

Among BHCs with greater than $250 billion in assets, idiosyncratic risk has been lower in the post-crisis period relative to both the pre-crisis and crisis periods, as shown by the placement of the boxes for these banks below the zero line. BHC equity returns in the post-crisis period, however, have generally become more sensitive to movements in funding conditions relative to the pre-crisis period, as reflected by the market betas summarized in the blue boxes, which lie above the zero line. Systematic risk has increased from the pre- to the post-crisis periods, especially for BHCs with assets between $25 billion and $250 billion. Finally, BHCs with assets above $250 billion have lower SRISK than in the crisis period and their systemic risk is close to the levels observed prior to the crisis. Throughout, the differences between post-crisis and pre-crisis or post-crisis and crisis levels are statistically significant.

Summing Up

The largest BHCs experienced notable declines in idiosyncratic, systematic, and systemic risks after the global financial crisis. However, BHCs appear to be more sensitive to liquidity risks triggered by general stress in funding markets.

Ricardo CorreaRicardo Correa is an assistant director at the Federal Reserve Board.

Linda GoldbergLinda Goldberg is a senior vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Kevin LaiKevin Lai is a senior research analyst in the Bank’s Research and Statistics Group.

How to cite this post:

Ricardo Correa, Linda Goldberg, and Kevin Lai, “Have the Risk Profiles of Large U.S. Bank Holding Companies Changed?,” Federal Reserve Bank of New York Liberty Street Economics, February 3, 2020,


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Is there still a role for validation?

Published by Anonymous (not verified) on Thu, 21/09/2017 - 9:02am in



Yes, answers the OU's Phil Berry, who argues that a validation arrangement can benefit alternative HE and established universities - serving to build a better quality sector.

The post Is there still a role for validation? appeared first on Wonkhe.

Time to open the door on sector diversity

Published by Anonymous (not verified) on Tue, 19/09/2017 - 9:04am in



The sector is diverse, but it could offer more choices of delivery methods to support the needs of a wider range of learners. Paul Feldman of Jisc, a member of the Higher Education Commission, introduces their recent report.

The post Time to open the door on sector diversity appeared first on Wonkhe.

On senior pay, the ball is in the sector’s court

Published by Anonymous (not verified) on Mon, 18/09/2017 - 9:03am in



OfS Chair Sir Michael Barber encourages the sector to get their house in order regarding value for money, as he looks towards the formal existence of the new sector regulator in the new year.

The post On senior pay, the ball is in the sector’s court appeared first on Wonkhe.

Can one size fit all? OfS and the future of regulation

Published by Anonymous (not verified) on Fri, 15/09/2017 - 3:07am in



The Higher Education Commission has launched a new report on the challenges facing the OfS in fostering a diverse higher education sector. Wonkhe's Arthi Nachiappan and Catherine Boyd digest the key findings.

The post Can one size fit all? OfS and the future of regulation appeared first on Wonkhe.

The OfS should make university governance a top priority

Published by Anonymous (not verified) on Thu, 31/08/2017 - 9:01am in

Many of the criticism's recently levelled at universities could be fixed with improved governance, but will the new regulator be sufficiently ambitious to ensure reform? Jim Dickinson suggests some ways forward.

The post The OfS should make university governance a top priority appeared first on Wonkhe.

Contracts, complaints and unintended consequences

Published by Anonymous (not verified) on Mon, 07/08/2017 - 4:47pm in

Jim Dickinson reflects on former OIA chief Rob Behrens' new book, in the context of Jo Johnson's latest pledge to further students' rights.

The post Contracts, complaints and unintended consequences appeared first on Wonkhe.