WSJ features Sandor on LIBOR Replacement…

Today, The Wall Street Journal published a wonderful article on CFS Advisory Board Member Richard Sandor and his company the American Financial Exchange (AFX). AFX developed a market-based LIBOR alternative, Ameribor. It now trades on an electronic platform and has over 700 institutional members in 49 states.

The article also nicely chronicles Richard’s prior successes as a perennial entrepreneur in the world of financial products – https://www.wsj.com/articles/futures-guru-targets-libor-replacement-11555410600.

Richard outlined thoughts on a LIBOR alternative at a CFS roundtable in 2012. He delved even more deeply and broadly at a roundtable discussion “Creation and Evolution of New Markets: The Case of Interest Rate Benchmarks” late last year – http://www.centerforfinancialstability.org/research/Sandor-11-16-18.pdf.

Novick on Financial Industry Transitions

Barbara Novick (BlackRock Vice Chairman and CFS Advisory Board Member) discussed financial industry transitions at the recent CFS Global Markets Workshop.

Presentation highlights include:

– Indexed equity strategies remain relatively small,
– Challenges of applying macroprudential tools to market finance,
– Potential risks to the US financial system from the future of Libor to bondholder rights to pension underfunding, among others.

For accompanying slides:
www.CenterforFinancialStability.org/research/BNovick-slides11-29-18.pdf

Sandor on “Creation and Evolution of New Markets: The Case of Interest Rate Benchmarks”

Dr. Richard Sandor – CFS Advisory Board Member and CEO of the American Financial Exchange (AFX) delivered remarks “Creation and Evolution of New Markets: The Case of Interest Rate Benchmarks” at a recent CFS roundtable.

Richard discussed the new Secured Overnight Financing Rate (SOFR) and American Interbank Offering Rate (Ameribor) – which is a new transaction-based interest rate based on actual overnight, unsecured transactions. As a perennial financial entrepreneur, his comments on LIBOR, financial innovation and the seven stages of market creation were especially noteworthy.

For the presentation: http://centerforfinancialstability.org/research/Sandor-11-16-18.pdf

For more on the AFX and Ameribor, please request a briefing pack from Rafael Marques at rmarques@theafex.com.

CFS Financial Crisis Timeline

As the 10-year anniversary of the global financial crisis approaches, assessment of key events before, during, and since is essential for understanding varying dimensions of the crisis.

The CFS Financial Timeline, created and managed by senior fellow Yubo Wang, seamlessly links financial markets, financial institutions, and public policies. It:

  • Covers more than 1,100 international events from early 2007 to the present.
  • Provides an actively maintained, free, and easy-to-use resource to help track developments in markets, the financial system, and forces that impact financial stability.
  • Curates essential inputs on a real time basis from established public sources.

Since 2010, the Timeline has become an integral part of the work done by scholars, students, government officials, and market analysts. View the Timeline.

We hope you find it of use and interest.

Fed Balance Sheet Since 1914

Kurt Schuler (CFS senior fellow in financial history) and students of Steve Hanke (CFS special counselor) converted the Fed’s weekly balance sheet from its beginning into spreadsheet form.

The data should prove useful for anyone concerned with the quantitative study of monetary policy in the United States over the last 100+ years.

Our joint Johns Hopkins / CFS working paper, “The Federal Reserve System’s Weekly Balance Sheet since 1914,” is available here.

Accompanying Spreadsheets

Similarly, Bank of England’s Ryland Thomas informs of an improved balance sheet dataset for the Bank and new paper “The Bank of England as lender of last resort: new historical evidence from daily transactional data.”

Bondi Testimony on SEC Seform

CFS senior fellow Bradley J. Bondi testified before the U.S. House of Representatives Subcommittee on Capital Markets, Securities, and Investment at a hearing entitled, “Ensuring Effectiveness, Fairness, and Transparency in Securities Law Enforcement” on June 13, 2018.

In his testimony and written statement, Brad advocated for transparency and reform from the SEC with respect to the imposition of issuer/shareholder penalties and disgorgement, advised against extending the statute of limitations for SEC enforcement actions, and discussed pending legislation to reform SEC administrative proceedings and to preempt enforcement of certain state securities laws.

Testimony and written statement
https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=403565

Bondi’s CFS Ten-Point Blueprint for SEC Reform
http://www.centerforfinancialstability.org/research/Bondi_8_17_17.pdf

Paul Tucker interview on central banking and “Unelected Power”…

The Center for Financial Stability (CFS) thanks Sir Paul Tucker – Former Deputy Governor, Bank of England and Chair, Systemic Risk Council, and Harvard Fellow – for “Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State.”  “Unelected Power” is broad and deep.  It is a joy to read – with priceless quotes and footnotes.

We are grateful to Paul for sitting down with CFS to discuss:

– Governance and central banking,
– A “Money – Credit Constitution” with emphasis on “inside” and “outside” money,
– Division between fiscal and monetary activities,
– Examples of central banking excellence,
– Prospect for normalizing monetary policy,
– Regulatory policy – ten years after the crisis,
– Surprises and motivation for writing “Unelected Power.”

The following are excerpts from the conversation.
http://centerforfinancialstability.org/research/Tucker_Unelected_Power.pdf

Barbara Novick Joins the Advisory Board of the Center for Financial Stability

New York, September 25, 2017/ The Center for Financial Stability (CFS) is honored to announce that Ms. Barbara G. Novick joins its Advisory Board.

Ms. Novick is the Vice Chairman of BlackRock, and a member of BlackRock’s Global Executive Committee, Corporate Risk Committee and Global Operating Committee. From the inception of the firm in 1988 to 2008, Ms. Novick headed the Global Client Group and oversaw global business development, marketing and client service across equity, fixed income, liquidity, alternative investment and real estate products for institutional and individual investors and their intermediaries worldwide. In her current role, Ms. Novick heads the firm’s efforts globally on government relations and public policy. In addition, she serves as a board member to the BlackRock Equity-Liquidity and BlackRock Closed End fund families, and is a member of the Executive Committee of the Investment Company Institute.

Prior to founding BlackRock in 1988, Ms. Novick was a Vice President in the Mortgage Products Group at The First Boston Corporation. Ms. Novick joined First Boston in 1985 where she became head of the Portfolio Products Team. From 1982 to 1985, Ms. Novick was with Morgan Stanley.

Ms. Novick has authored numerous articles on asset management and public policy issues. Ms. Novick is a member of CFA Institute’s Future of Finance Advisory Council and MSCI’s Editorial Advisory Board. She currently serves as a Trustee of Cornell University and the HCM Foundation. Ms. Novick previously served on the boards of Robert Toigo Foundation (2007 – 2010), UJA-Federation (2009 – 2015) and Westchester Day School (2000 – 2005), served as both Treasurer and Trustee of Westchester Jewish Center (1994 – 2012) and coached in the Westchester Youth Soccer League (1999 – 2015). Ms. Novick earned a BA degree, cum laude, in economics from Cornell University.

Ms. Novick joins the 11 distinguished members of the CFS Advisory Board: Eduardo Aninat, Ph.D; Senator Bill Bradley; The Honorable Carole L. Brookins; Peter Flocos, Esq.; Charles Goodhart, CBE, FBA; Henry Kaufman, Ph.D.; Guillermo Ortiz, Ph.D.; Judge Richard A. Posner; The Honorable Randal K. Quarles; Richard L. Sandor, Ph.D., Dr. Sc.h.c.; and Nobel Laureate Myron Scholes, Ph.D.

It is a great joy to welcome Barbara to our Board.

 

Senate Banking Committee Votes on Key Administration Nominees

The U.S. Senate Banking committee voted to advance the nominees for two prominent banking regulatory positions. The two nominations will now proceed to the Senate floor for a confirmation vote.

Joseph Otting was approved to serve as Comptroller of the Currency. Mr. Otting most recently was managing partner of Ocean Blvd LLC and Lake Blvd LLC. He previously held positions as President and CEO of OneWest Bank and Vice Chair of U.S. Bancorp. Keith Noreika has served as Acting Comptroller of the Currency since Thomas J. Curry stepped down in May 2017 (see previous coverage).

Randal Quarles was approved to serve as Vice Chair of the Board of Governors of the Federal Reserve System (“FRB”). Mr. Quarles had served as Under Secretary for Domestic Finance under President George W. Bush, Assistant Secretary of the Treasury for International Affairs and U.S. Executive Director of the International Monetary Fund. He is the founder and managing director of Cynosure, a private investment firm, and also was a partner at Davis Polk & Wardwell. Current FRB Vice Chair Stanley Fischer recently announced his intention to step down from his position in October 2017 (see previous coverage).

CFS Special Counselor Steve H. Hanke Honored by the University of Liechtenstein…

CFS congratulates Steve H. Hanke, CFS Special Counselor and Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore, on receiving a Doctorate Honoris Causa from the University of Liechtenstein.

At the University of Leichtenstein, located in Vaduz, Hanke was conferred the Doctorate by Rector Jürgen Brücker during a University Day ceremony. The ceremony concluded with a dinner hosted by H.S.H. Prince Phillip von und zu Leichtenstein and H.S.H. Prince Michael von und zu Leichtenstein.

Professor Hanke’s honor was in recognition of his standing as “one of the world’s leading authorities on currencies and alternative currency regimes” and as “the world’s authority on measuring and stopping hyperinflations.” This is Professor Hanke’s sixth Doctorate Honoris Causa.

For further detail: https://www.uni.li/en/news/a-festive-atmosphere-at-the-open-day