FEDS Paper: Trademarks in Banking

Ryuichiro Izumi, Antonis Kotidis, and Paul E. SotoOne in five banks in the United States share a similar name. This can increase the likelihood of confusion among customers in the event of an idiosyncratic shock to a similarly named bank. We find that banks that share their name with a failed bank experience a half percent drop in transaction deposits relative to banks with similar characteristics but different name.

FEDS Paper: Demand Uncertainty, Selection, and Trade

Erick Sager and Olga A. TimoshenkoThis paper examines the role of uncertainty on elasticities of trade flows with respect to variable trade costs in a canonical model of trade with monopolistic competition and heterogeneous firms. We identify two channels through which uncertainty impacts trade: through export participation thresholds (the selection effect) and the distribution of shocks governing export selection (the dispersion effect).

FEDS Paper: Information Friction in OTC Interdealer Markets

Benjamin Gardner and Yesol HuhIn over-the-counter (OTC) securities markets, interdealer markets are an important venue through which dealers can offload positions and share risk amongst themselves. Contrary to the popular conception that search frictions matter the most in OTC markets, we find that in the interdealer market for U.S. corporate bonds, information frictions are most relevant.

The Lib Dems want to tax the banks more – is this a good idea?

Banks would pay more tax under the Lib Dems Anton_AVThe Liberal Democrats were the first party to unveil their manifesto and the first party to break ranks and declare increases in tax, or sort of. Ed Davey announced that they would reverse tax cuts to banks and introduce a windfall tax on profits. Obviously, the Liberal Democrats can do this as they have little chance of gaining a majority. But does it make sense?

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