Fed changes money; New CFS Divisia Monetary and Financial Measures

On February 23, 2021, the Federal Reserve Board implemented major changes to “streamline” the H.6 statistical releases.  The depth and timeliness of available monetary data diminished significantly.  For instance:

– The publication frequency of the release will change from weekly to monthly.
– Institutional money market funds will be discontinued this year.
– The release will contain only monthly average data – weekly average, seasonally adjusted data will no longer be provided.
– Monetary aggregates will no longer provide a breakdown of components by banks and thrifts.

A series of papers commenting more deeply on these changes as well as implications for financial markets and the economy will be forthcoming.

We apologize for any inconvenience related to the delayed distribution of CFS monetary and financial measures.  A recalibrated and fortified Advances in Monetary and Financial Measurement (AMFM) data set and release is available below.

A hearty thanks to Jeff van den Noort, Ryan Mattson, Liting Su, and especially Professor William A. Barnett – CFS Director of AMFM.

We look forward to any comments you might have.

Today we release CFS monetary and financial measures for February and January 2021.  CFS Divisia M4, which is the broadest and most important measure of money, grew by 28.1% in February 2021 on a year-over-year basis versus 28.5% in January.

For Monetary and Financial Data Release Report:

March 2021 data will be released on May 03, 2021 at 9:00 AM ET.

Bloomberg terminal users can access our monetary and financial statistics by any of the four options:

3) ECST <GO> –> ‘Monetary Sector’ –> ‘Money Supply’ –> Change Source in top right to ‘Center for Financial Stability’
4) ECST S US MONEY SUPPLY <GO> –> From source list on left, select ‘Center for Financial Stability’

Charles Goodhart: lifetime achievement award

Congratulations to Professor Charles Goodhart for earning Central Banking’s lifetime achievement award.  Central Banking chronicles many of Charles’ monetary policy and financial stability achievements and work on:

– Monetary frameworks,
– Risk management,
– Hong Kong peg,
– Independence of RBNZ,
– FX research,
– “The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival” with Manoj Pradhan and
– Goodhart’s law.

CFS is grateful to Charles for serving as a senior distinguished Advisory Board member since inception, engaging in roundtable discussions, as well as actively guiding CFS Bretton Woods working conferences over the years.

To view the full article:

Rhodes on Debt for Vaccines program

CFS Chairman of the Advisory Board William R. Rhodes and World Health Organization epidemiologist Cristina Valencia offer an intriguing idea to help ameliorate the COVID-19 pandemic in Latin America… debt for vaccine swaps.

Bill pioneered the use of debt for equity swaps throughout the Emerging world, as head of many advisory committees of international banks. The present idea builds on debt for nature swaps – integrating pharmaceutical companies.

We look forward to any comments you might have.

To view the full article:

Post BREXIT Risk Conference / Call for Papers

An important United Kingdom economics conference “Post BREXIT: Uncertainty, Risk Measurement and COVID-19 Challenges” is being held online on June 22-23.  Call for Papers information is below.

CFS Director of Advances in Monetary and Financial Measurement (AMFM) Professor William A. Barnett will be delivering a keynote lecture “Is the BREXIT Bifurcation Causing Chaos in the United Kingdom?”

Other keynotes include:

David Aikman: Professor of Finance and Director of the Qatar Centre for Global Banking and Finance, King’s Business School, King’s College.
Patrick Minford: Professor of Applied Macroeconomics at Cardiff University.
Professor Jagjit Chadha: Director of the National Institute of Economic and Social Research (NIESR).
Professor Costas Milas: Professor of Finance at the Management School, University of Liverpool.

The Call for Papers at the U. of Birmingham is at:

If you would like to submit a paper, the Call for Papers contains a link to another online page providing more details about the conference and instructions about deadlines and how to submit.  The conference will produce special issues of two journals (Economic Modeling, and European Journal of Finance).

The conference is open to the public with no registration fee.  The Call for Papers contains a link to the registration page.

Harvard Law School Forum publishes CFS analysis of Robinhood and GameStop

The Harvard Law School Forum on Corporate Governance published CFS analysis of Robinhood and GameStop.

Events surrounding GameStop and Robinhood signal future issues that financial market participants are destined to confront and regulators are eager to confront.

Steven Lofchie, Robin L. Lumsdaine, John D. Feldmann, Diane Glossman, Jack Malvey, Yubo Wang, and I,

1) examine essential issues as well as
2) propose next steps.

As these are complex and multipronged issues, we look forward to any comments you might have.

To view the full article:

The Future of Risk Management

CFS special counselor David X Martin and David R. Koenig, founder of the Directors and Chief Risk Officers group (DCRO) opine on “The Future of Risk Management.”  Risk management and crisis prevention are longstanding core objectives and activities at CFS.

David and David offer perspective on how boards and organizations can foster a positive embrace of risk taking. Topics include:

– Translating the new risks
– Resiliency planning
– Risk any unanticipated impact of efficiency
– Forward facing techniques
– Professionalizing risk management
– The future of risk governance at the board level

To view the full article:

Bubbles, Quantities and Short Sales podcast

My friend and former Salomon Brothers colleague, Larry Bernstein hosts an engaging “What Happens Next?” weekly podcast.

We spoke about bubbles, monetary quantities and short sales – covering:

– future implications for financial markets… why it’s a bubble and
– public policy, regulatory risks, and what to do.

To listen to the podcast:

To view the remarks:

Thanks To A New Way Of Counting Money… This Is The Best Outlook For GDP In Years

My friend and former colleague, Raul Elizalde wrote a thoughtful piece for Forbes – “This Is The Best Outlook For GDP In Years, And We Know It Thanks To A New Way Of Counting Money.”

Raul nicely frames CFS Divisia and key issues in plain and direct language. He then offers his perspective on financial markets by incorporating CFS Divisia.

Raul is the founder, president, and CIO at Path Financial.

To view the full article:

Robinhood and GameStop: Essential issues and next steps for regulators and investors

The hullabaloo surrounding the run up in the price of GameStop (GME) and the activities of Robinhood have generated front page news, calls for action, and allegations of wrongdoing.

However, lost in the headlines and struggles between good and bad or big and little is the issue of greatest concern to all – financial stability.

A group of Center for Financial Stability (CFS) experts
1) examine essential issues as well as
2) propose next steps.

As these are complex and multipronged challenges, we look forward to any comments you might have.

To view the full article:

Today’s WSJ: “Corporate Debt ‘Relief’ Is an Economic Dud”

Today, The Wall Street Journal published an op-ed titled “Corporate Debt ‘Relief’ Is an Economic Dud.

CFS Board Member and former FDIC Chair Sheila Bair and I note how:

Conservatives accuse progressives of wanting to destroy capitalism. Yet a greater threat than Bernie Sanders is the prospect of serial market bailouts by monetary authorities.

The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt. The plan went far beyond previous quantitative easing.

– There is not much evidence that all of that cash went toward creating and preserving jobs in the U.S.
– Corporate facilities merely intensified the damage that monetary interventions had already dealt to U.S. capital allocation.

Capitalism doesn’t work unless capital costs something and markets don’t work unless they are allowed to rise and fall.  Corporate facilities should not become part of the Fed’s standard tool kit. Let them die.

We look forward to any comments you might have.

To view the full article: