The hottest Financial Stability Substack posts right now

And their main takeaways
Category
Top Finance Topics

The Fed's New Rescue Mechanism

Concoda • 513 implied HN points • 13 Feb 24
💰 Finance Federal Reserve Banking System Monetary Policy Financial Stability
  1. The Federal Reserve's Bank Term Funding Program (BTFP) is expiring after being used to address financial panic and market stimulation caused by banks' underwater assets.
  2. Following a series of bank failures in the aftermath of COVID-19's speculative boom, the Fed introduced the BTFP to provide a confidence boost and stabilize markets.
  3. The BTFP evolved into a risk-free arbitrage opportunity for banks, leading to its rapid increase in volumes before its sudden discontinuation in March 2024.

The Fed's Global Dilemma

Concoda • 794 implied HN points • 01 May 23
💰 Finance Monetary Policy Global Finance Financial Stability Central Banking
  1. The banking system has evolved significantly post the 2007/08 Great Financial Crisis, leading to changes in global monetary standards and U.S. central bank's mechanisms.
  2. Regulatory standards like LCR, NSFR, and SLR have transformed major financial institutions into stable entities, impacting their ability to engage in certain financial activities.
  3. The Federal Reserve introduced new mechanisms like Jaws of the Fed™ to control money market rates and ensure financial stability, but faces a dilemma with vulnerabilities in its global lower jaws.
Get a weekly roundup of the best Substack posts, by hacker news affinity:

The Battle for the Treasury Market

Concoda • 502 implied HN points • 21 Mar 23
💰 Finance Market Regulation Monetary Policy Market structure Financial Stability Transparency
  1. There is a hidden battle within America's sovereign debt market that is about to transform.
  2. The regulatory focus is shifting towards increasing transparency in the Treasury market to subdue systemic risk.
  3. Implementing all-to-all trading in the Treasury market could democratize the market, enhance liquidity, and improve market resilience.

Eurodollar I: Origins

The Dollar Endgame • 139 implied HN points • 07 Oct 23
💰 Finance Banking Central Bank Financial Stability
  1. There exists a secret financial system, the Eurodollar System, that operates outside traditional financial regulations and could impact the global economy significantly.
  2. In the history of banking, innovations like private banks and clearing systems arose to address challenges like widely circulated banknotes and redemption issues.
  3. The Federal Reserve was created based on existing reserve bank systems, adding the revolutionary concept of the money printer and bank reserves, paving the way for expansion of credit creation.

Guan Tao on the yuan's exchange rate as an asset price

Pekingnology • 15 implied HN points • 13 Feb 24
💰 Finance Financial Stability Monetary Policy
  1. China's Renminbi exchange rate is now seen as an asset price, showing characteristics of asset pricing and requiring an understanding beyond traditional commodity money views.
  2. The flexibility of the Renminbi exchange rate helps release pressure, acts as a shock absorber, and ensures market resilience in the face of fluctuations.
  3. Maintaining a flexible exchange rate policy supports China's pursuit of institutional openness, providing coordination between development and security.

The Death of QT

The Last Bear Standing • 179 implied HN points • 17 Mar 23
💰 Finance Monetary Policy Banking Sector Market Analysis Financial Stability Central Banking
  1. The Federal Reserve struggled with liquidity tightening, leading to emergency measures and a new financial crisis.
  2. Understanding the monetary plumbing system is crucial to comprehending the impact of Quantitative Tightening (QT) on the banking sector.
  3. Quantitative Tightening (QT) may not continue for long, as challenges in the banking sector could be exacerbated without further accommodations from the Federal Reserve.

Hitting Pause

The Last Bear Standing • 152 implied HN points • 14 Apr 23
💰 Finance Inflation Financial Stability Implications
  1. The Federal Reserve is likely to pause interest rate hikes soon, signaling a shift in monetary policy.
  2. Inflation has been influenced by significant increases in money supply during the pandemic, impacting consumer behavior and economic growth.
  3. Financial stability is a top concern for the Fed, potentially outweighing traditional inflation targets and leading to a pause in rate hikes.

The Fed's $300B Emergency Response

Apricitas Economics • 57 implied HN points • 18 Mar 23
💰 Finance Emergency Response Banking System Financial Stability Market conditions Interest Rates
  1. The Federal Reserve lent over $300B in emergency funds to American banks to stabilize the financial system.
  2. Most of the emergency lending was short-term, with a majority of the funds coming from the discount window.
  3. Reforms to the discount window have helped reduce stigma around borrowing from the Fed during financial crises.

Exploring the Benefits of a Tax-Free Community in the 1880s

Wayne's Earth • 0 implied HN points • 22 Dec 22
💾 History Taxation Economy Society Government Financial Stability
  1. Living in a tax-free community in the 1880s provided financial stability for families, allowing them to save more and invest in land, businesses, and homes without the burden of taxation.
  2. In a tax-free community during the 1880s, businesses could expand faster and create jobs more quickly since they didn't have to worry about taxes on profits or investments, enabling greater economic growth.
  3. Citizens in a tax-free community had more control over their money, allowing them to directly support causes they cared about instead of having funds allocated by the government, providing greater autonomy.