The Center for Financial Stability is an independent, nonpartisan, and nonprofit think tank dedicated to financial markets for the benefit of investors, officials, and the public.  More

New Policy Library

The CFS Policy Library features descriptions of central financial policy topics. The summaries and materials present all sides of policy issues in a neutral and non-partisan fashion. Visit the Library

Highlights

In a letter to the WSJ titled “Argentina Could Halt Capital Flight Easily,” CFS President Lawrence Goodman highlights how emerging economies can reverse capital flight via investment-promoting policies. See capital flight chart.

In Getting it Wrong: How Faulty Monetary Statistics Undermine the Fed, the Financial System, and the Economy, CFS Director William A. Barnett details why simple sum monetary-aggregation formulas are obsolete and why best-practice economic measurement is needed today.

CFS Special Counselor Steve H. Hanke proposes the Hanke-Henry Permanent Calendar, which has big implications for financial instruments.

Fixed Income Securities: Tools for Today‘s Markets, third edition, by CFS Director of Financial Markets Research Bruce Tuckman provides the conceptual frameworks, quantitative tool-kit, and cash-flow and pricing conventions for fixed-income practitioners.

CFS in the News

Upcoming

CFS will be hosting a roundtable on sovereign challenges, country risk and ratings for members on January 31st, featuring John Chambers, Chairman of S&P's Sovereign Ratings Committee; Bart Oosterveld, Global Managing Director of Sovereign Risk at Moody's; and David Riley, Managing Director - Sovereign & Supranational Ratings at Fitch Ratings.

Advances in Monetary and Financial Measurement, headed by CFS Director William A. Barnett, will release the most sophisticated measures of US money supply available today. Releases will be monthly.

Federal Liquidity Options: Containing Runs on Deposit-Like Assets without Bailouts and Moral Hazard

Rescuing nonbanks at the risk or expense of the public is still the fallback policy for containing runs on money market funds and repo, and moral hazard remains a problem. To transform this policy regime, Bruce Tuckman proposes that the Fed auction Federal Liquidity Options (FLOs) as the exclusive means of providing liquidity to nonbanks in a crisis... More

Some Observations About Basel II/III

In her lead-off piece as Bank Capital and Liquidity Rules Forum Moderator, CFS Senior Fellow Robin L. Lumsdaine provides a starting point for forum discussion by considering a number of aspects of the current debate on capital regulations and posing questions for participants...
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Rule of Law Index (RLI)

The strength of sovereign institutions is vital for attracting and maintaining foreign and domestic capital alike. Fragile institutions coupled with faulty fundamentals present a recipe for volatile growth or excessively deep recessions. CFS introduces a powerful web-based educational tool to evaluate the “Rule of Law” across countries... More

Does Math Support Euro Survival?

A quantitative approach to evaluate the relative competitiveness of nations participating in the euro is essential for gauging whether the unified currency can survive. Based on CFS currency valuation models for eleven of the legacy currencies of nations that joined the euro, our view is... More

Urgent Course Correction: Lessons for Argentina and the US

Unfortunately, there are many parallels between the US and Argentina. Each nation confronts a serious growth challenge. Fortunately, examination of history over a nearly four decade period offers actionable solutions to the growth quandary for each nation... More

Update: The Clearing Mandate in Dodd-Frank, Systemic Risk, and Competition

Regulatory rule making is often poised on a knife-edge: insufficiently restrictive rules do not fully fulfill the intent of underlying legislation, while overly-restrictive rules spawn a host of unintended consequences. Implementation of the clearing mandate in Dodd-Frank (DF) is no exception...  More