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Information Management in Times of Crisis [pdf]
- Animats 6y agoI thought this was going to be about how the FDIC closes a failed bank. They have a good procedure for that. When the FDIC takes over a failed bank, they do it at the close of business on a Friday. On Monday, the bank re-opens with FDIC employees at the teller windows, paying out amounts up to the FDIC insurance limit. But that's not it. Instead, it was about not disclosing the balance sheets of state banks during the Great Depression. The authors argue that a coverup of the condition of troubled banks helped to keep outflows down. It doesn't go into whether it minimized customer losses. The US is down to four big retail banks now. The big four (Chase, BofA, Citigroup, and Wells Fargo) are all above $1 trillion. The failure of any one of those would overwhelm the FDIC. So seeing this paper from the FDIC and New York Fed suggests this might be political cover for hushing up problems at one of the big banks. Here's are the author's CVs.[1][2] The author from the Fed is a nerd's nerd of finance. Check out his papers. The author from the FDIC is more policy-oriented. Her work revolves around what happens when the financial system is in trouble, which makes sense for someone at the FDIC. She's spoken at the Cato Institute and the American Enterprise Association, which are right-wing think tanks. Hm. [1] https://www.fdic.gov/analysis/cfr/researchers/andersoncv.pdf https://www.fdic.gov/analysis/cfr/researchers/andersoncv.pdf [2] https://www.newyorkfed.org/medialibrary/media/research/economists/copeland/copeland_cv.pdf https://www.newyorkfed.org/medialibrary/media/research/econo...