Monthly Archives: April, 2009
DOES GOOD FINANCIAL PERFORMANCE COME FROM LUCK OR SKILL?
Numerous studies have documented that, when it comes to equity and fixed-income mutual fund managers, there is little evidence of performance persistence, except in the case of particularly bad performance. These studies suggest good performance could be attributable to luck, rather than to skill, and bad performance can result from incompetence or excessive management fees. [...]
Lending to consumers and small businesses
In late November 2008, the Treasury and the Federal Reserve announced a facility to finance the issuance of non-mortgage asset-backed paper in order to support lending to consumers and small businesses. The consumer asset-backed securities market offers liquidity to lenders that provide loans to small businesses to consumers through auto loans, student loans and credit [...]
Troubled Asset Relief Program (TARP)
The most significant component of EESA is the Troubled Asset Relief Program (“TARP”). TARP permits the Treasury, through the new Office of Financial Stability, to use up to $700 billion to purchase troubled assets from financial institutions. The Act defines “troubled assets” and “financial institution” very broadly, allowing great flexibility for the Treasurer’s activities. The [...]
Federal efforts to calm the financial system
The federal government and its agencies have taken, and continue to take, a variety of steps to thaw credit markets, restore confidence in financial institutions, and stimulate the economy. Secretary of the Treasury Henry M. Paulson remarked that there is no “playbook” for responding to the turmoil in the economy. Federal actions are by no [...]
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Categories
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Recent Posts
- Credit informational asymmetries
- Adverse selection in a loan model
- Conditional credit expectation rule
- A credit discriminatory pricing rule
- Types of bank capital represent its own credit risk class
- Different degrees of loans subordination
- General fluctuations of credit spreads
- Investors require a premium for taking on credit risk
- Lagging indicators of credit quality
- Selection of your credit spread class

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