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F e d e r a l R e s e r v e B a n k o f N e w Yo r k

Number 2

2009

ResearchUpdate
Research and Statistics Group

www.newyorkfed.org/research

Study Finds Important Similarities among Nonprime
Mortgage Borrowers
he U.S. boom in nonprime mortgage
Authors Andrew F. Haughwout and
lending between 2004 and 2006 was
Ebiere Okah estimate negative equity as
quickly followed by a swift rise in
of December 2008, describe the sources
delinquencies and defaults on the loans.
of negative equity, and summarize the
Evidence from the current downturn sugcharacteristics of borrowers below the
gests that reductions in borrower equity
equity line. Combining information from
are major contributors to delinquencies
house price indexes with data on indiand defaults. Accordingly, policymakers
vidual loans, the authors gauge the
with their eyes on the foreclosure crisis
prevalence and magnitude of negative
are crafting policies that rely to some
equity across a range of dimensions,
extent on measures of negative equity, in
such as the location of the property and
which the value of a property is below the
the year the mortgage originated.
mortgage balance.
The study finds that nonprime borA new study of the nonprime mortgage
rowers who are “below the line” share
market supports earlier findings on the
several traits. These borrowers took out
relationship between negative equity—
loans near the housing market peak and
which is affected by the time and place
had mortgages with high loan-to-value
of mortgage origination and the existence
ratios, usually achieved with subordinate
of subordinate liens on the
property—and default
Also in this issue…
(“Below the Line:
Estimates of Negative
New timelines document policy responses
Equity among Nonprime
to global financial crisis . . . . . . . . . . . . . . . . . . . . . . . 3
Mortgage Borrowers,”
Most downloaded publications . . . . . . . . . . . . . . . . . . . 3
Economic Policy Review,
Staff Reports: New titles. . . . . . . . . . . . . . . . . . . . . . . . . 4
forthcoming).
Papers recently published
by Research Group economists . . . . . . . . . . . . . . . . . 7
Papers presented at conferences . . . . . . . . . . . . . . . . . . 8
Publications and papers: April-June . . . . . . . . . . . . . . 10

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RV oe ls ue ma rec h9 , U Np du amtbee r■ 4N, u 2m0b0e 6r 2 , 2 0 0 9

2

liens. The authors also find that borrowers with a mortgage exceeding the value
of their house are twice as likely as positive equity borrowers to be seriously
delinquent on their first-lien mortgage.
Haughwout and Okah show that while
negative equity loans exist in most U.S.
metro areas, they are disproportionately
concentrated in housing markets that
experienced especially large swings in
house price appreciation, particularly in
California. They estimate that three
California metro areas account for more
than a quarter of the negative equity
mortgages in their sample. Moreover,
“because of the higher balances on these

mortgages, the loans account for nearly
half of the overall difference between
house values and mortgage balances.”
In addition, the authors use information from housing price futures contracts
to estimate the path of negative equity
beyond 2009. Their results suggest that if
house prices fall an additional 10 percent
from December 2008 levels, “approximately
1.5 million new nonprime borrowers would
see their house value fall below their current mortgage balance” and the aggregate
value of negative equity among nonprime
borrowers could reach $135 billion.
The article is available at www.newyorkfed
.org/research/epr/09v15n1/0907haug.html.

Publications and Papers
The Research and Statistics Group produces a wide range of publications:
■

The Economic Policy Review—a policy-oriented journal focusing on economic
and financial market issues.

■

EPR Executive Summaries—online versions of selected Economic Policy Review
articles, in abridged form.

■

Current Issues in Economics and Finance—concise studies of topical economic
and financial issues.

■

Second District Highlights—a regional supplement to Current Issues.

■

Staff Reports—technical papers intended for publication in leading economic
and finance journals, available only online.

■

Publications and Other Research—an annual catalogue of our research output.

F e d e r a l R e s e r v e B a n k o f N e w Yo r k

www.newyorkfed.org/research

New Timelines Document Policy Responses to Global Financial Crisis
ince mid-2007, policymakers have
put forth a range of initiatives to
address the global financial crisis. To
illustrate the unfolding of events and the
various policy responses, the Research
Group has introduced a website featuring
domestic and international timelines of
the crisis. The timelines catalogue the key
announcements of the Federal Reserve,
foreign central banks, and other domestic
and foreign government agencies.
The timelines represent a unique central repository of value to economists,
analysts, policymakers, educators, and

S

others wishing to track the progress of
the crisis. The domestic timeline begins
in June 2007, showing the lead-up to and
development of events in the United
States as well as the government responses;
the international timeline focuses on the
G-7 responses since the intensification of
the crisis in the fall of 2008. The event
entries in the timelines link to documents
offering more information.
The timelines are available at www
.newyorkfed.org/research/global_economy/
policyresponses.html and will be updated
at the beginning of each month. ■

Most Downloaded Publications
isted below are the most sought after
Research Group articles and papers
from the New York Fed’s website and
from the Bank’s page on the Social
Science Research Network site
(www.ssrn.com/link/FRB-New-York.html).

L

New York Fed, second-quarter 2009:
■

“Understanding the Securitization of
Subprime Mortgage Credit,” by Adam
B. Ashcraft and Til Schuermann (Staff
Reports, no. 318, March 2008) –
3,626 downloads

■

“The Yield Curve as a Predictor of U.S.
Recessions,” by Arturo Estrella and
Frederic S. Mishkin (Current Issues in
Economics and Finance, vol. 2, no. 7,
June 1996) – 2,796 downloads

■

“The Yield Curve as a Leading
Indicator: Some Practical Issues,” by
Arturo Estrella and Mary R. Trubin
(Current Issues in Economics and
Finance, vol. 12, no. 5, July/August
2006) – 1,401 downloads

■

SSRN, second-quarter 2009:
“Understanding the Securitization of
Subprime Mortgage Credit,” by Adam
B. Ashcraft and Til Schuermann (Staff
Reports, no. 318, March 2008) –
1,219 downloads

■

“Pass-Through of Exchange Rates and
Import Prices to Domestic Inflation in
Some Industrialized Economies,”
by Jonathan McCarthy (Staff Reports,
no. 111, September 2000) –
239 downloads

■

“Portfolio Credit Risk,” by Thomas
C. Wilson (Economic Policy Review,
vol. 4, no. 3, October 1998) –
202 downloads

For lists of the top-ten downloads,
visit www.newyorkfed.org/research/
top_downloaded/index.html.

Research and Statistics Group

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Research Update

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Number 2, 2009

New Titles in the Staff Reports Series
The following new staff reports are available at www.newyorkfed.org/research/
staff_reports.

MACROECONOMICS
AND GROWTH
No. 375, June 2009
Credit Quantity and Credit Quality: Bank
Competition and Capital Accumulation
Nicola Cetorelli and Pietro F. Peretto

4

This paper shows that bank competition
has an intrinsically ambiguous effect on
capital accumulation and economic growth.
It further demonstrates that banking market structure can be responsible for the
emergence of development traps in
economies that would otherwise be characterized by unique steady-state equilibria.
These predictions explain the conflicting
evidence gathered from recent empirical
studies of how bank competition affects the
real economy. Cetorelli and Peretto’s results
were obtained by developing a dynamic
general-equilibrium model of capital accumulation in which banks operate in a
Cournot oligopoly. The presence of more
banks leads to a higher quantity of credit
available to entrepreneurs, but also to
diminished incentives to screen loan applicants and thus to poorer capital allocation.
The authors also show that conditioning on
economic parameters describing the quality
of the entrepreneurial population resolves
the theoretical ambiguity.

MICROECONOMICS
No. 373, May 2009
Barriers to Household Risk Management:
Evidence from India
Shawn Cole, Xavier Giné, Jeremy Tobacman,
Petia Topalova, Robert Townsend,
and James Vickery
Financial engineering offers the potential
to significantly reduce the consumption
fluctuations faced by individuals, house-

F e d e r a l R e s e r v e B a n k o f N e w Yo r k

holds, and firms. Yet much of this potential
remains unfulfilled. This paper studies the
adoption of an innovative rainfall insurance
product designed to compensate lowincome Indian farmers in the event of
insufficient rainfall during the primary
monsoon season. Cole et al. first document
that only 5-10 percent of households purchase the insurance, even though they
overwhelmingly cite rainfall variability as
their most significant risk. They then conduct a series of randomized field experiments to test theories of low product adoption. Insurance purchase is sensitive to
price, with an estimated extensive price
elasticity of demand ranging between -0.66
and -0.88. Credit constraints are a key barrier to participation, a result also consistent
with household self-reports. The authors
find mixed evidence that subtle psychological manipulations affect purchases and no
evidence that modest attempts at financial
education affect household participation.

BANKING AND FINANCE
No. 368, April 2009
Subprime Mortgage Pricing: The Impact
of Race, Ethnicity, and Gender on
the Cost of Borrowing
Andrew Haughwout, Christopher Mayer,
and Joseph Tracy
Some observers have argued that minority
borrowers and neighborhoods were targeted
for expensive credit in 2004-06, the peak
period for subprime lending. To investigate
this claim, the authors use a new data set
that merges demographic information on
subprime borrowers with information on
their mortgages. They find no evidence of
adverse pricing by race, ethnicity, or gender
in either the initial rate or the reset margin. Indeed, minority borrowers appear to
pay slightly lower rates, as do borrowers in
Zip codes with a larger percentage of black
or Hispanic residents or higher unemployment. Mortgage rates are also lower in

www.newyorkfed.org/research

locations with higher rates of house price
appreciation. Although these results suggest some economies of scale in subprime
lending, the authors caution that they are
unable to measure points and fees at loan
origination, and the data do not indicate
whether borrowers might have qualified for
less expensive conforming mortgages.

No. 369, April 2009
The Impact of Tax Law Changes on Bank
Dividend Policy, Sell-offs, Organizational
Form, and Industry Structure
Hamid Mehran and Michael Suher

This paper investigates the effect of a 1996
tax law change allowing commercial banks
to elect S-corporation status. By the end of
2007, roughly one in three banks had
opted for or converted to S status. The
authors analyze the effect on bank dividend payouts. They also examine the effect
S-corporation status has on a community
bank’s likelihood of sell-off and measure a
firm’s sensitivity to tax rates based on its
choice of organizational form. Mehran and
Suher document that dividend payouts
increase substantially after a bank’s conversion to S status. Moreover, community
banks that convert are significantly less
likely to be sold than their C-corporation
peers. The study estimates a tax rate elasticity of conversion in the range of 2 to
3 percent for every 1-percentage-point
change in relative tax rates. Overall,
Subchapter S status is shown to have
significant effects on bank conduct and
industry structure.
No. 370, May 2009
Precautionary Reserves and
the Interbank Market
Adam Ashcraft, James McAndrews,
and David Skeie
Liquidity hoarding by banks and extreme
volatility of the fed funds rate have been
widely seen as severely disrupting the
interbank market and the broader financial

system during the 2007-08 financial crisis.
Using data on intraday account balances
held by banks at the Federal Reserve and
Fedwire interbank transactions to estimate
all overnight fed funds trades, the authors
present empirical evidence on banks’ precautionary hoarding of reserves, their
reluctance to lend, and extreme fed funds
rate volatility. They develop a model with
credit and liquidity frictions in the interbank market consistent with the empirical
results. Their theoretical results show that
banks rationally hold excess reserves intraday and overnight as a precautionary measure against liquidity shocks. Moreover, the
intraday fed funds rate can spike above the
discount rate and crash to near zero.
Apparent anomalies during the financial
crisis may be seen as stark but natural outcomes of the model of the interbank market.
No. 371, May 2009
Bank Liquidity, Interbank Markets,
and Monetary Policy
Xavier Freixas, Antoine Martin,
and David Skeie
A major lesson of the recent financial crisis
is that the ability of banks to withstand liquidity shocks and to provide lending to one
another is crucial for financial stability.
This paper studies the functioning of the
interbank lending market and the optimal
policy of a central bank in response to
both idiosyncratic and aggregate shocks. In
particular, it considers how the interbank
market affects a bank’s choice between
holding liquid assets ex ante and acquiring
such assets in the market ex post. The
authors show that a central bank should
use different tools to manage different
types of shocks. Specifically, it should
respond to idiosyncratic shocks by lowering
the interest rate in the interbank market
and address aggregate shocks by injecting
liquid assets into the banking system. They
also show that failure to adopt the optimal
policy can lead to financial fragility.

Research and Statistics Group

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Research Update

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Number 2, 2009

No. 372, May 2009
Credit Default Swap Auctions
Jean Helwege, Samuel Maurer, Asani Sarkar,
and Yuan Wang

6

The rapid growth of the credit default swap
(CDS) market and the increased number of
defaults in recent years have led to major
changes in the way CDS contracts are settled when default occurs. Auctions are
increasingly the mechanism used to settle
these contracts, replacing physical transfers
of defaulted bonds between CDS sellers
and buyers. Indeed, auctions will now
become a standard feature of recent CDS
contracts. This paper examines all CDS
auctions conducted to date and evaluates
their efficacy by comparing the auction
outcomes with the underlying bond prices
in the secondary market. The auctions
appear to have served their purpose, as the
authors find no evidence of inefficiency:
Participation is high, open interest is low,
and auction prices are close to prices
observed in the bond market before and
after each auction. The authors qualify
their conclusions by noting that relatively
few auctions have taken place thus far.
No. 374, May 2009
The Persistent Effects of a False News Shock
Carlos Carvalho, Nicholas Klagge,
and Emanuel Moench
In September 2008, a six-year-old article
about the 2002 bankruptcy of United
Airlines’ parent company resurfaced on the
Internet and was mistakenly believed to be
reporting a new bankruptcy filing by the
company. The parent company’s stock price
dropped by as much as 76 percent in just a
few minutes, before NASDAQ halted trading. After the “news” had been identified
as false, the price rebounded, but still

F e d e r a l R e s e r v e B a n k o f N e w Yo r k

ended the day 11.2 percent below the previous close. The authors use this natural
experiment and a simple asset-pricing
model to study the aftermath of this false
news shock. They find that, after three
trading sessions, the company’s stock was
still trading below the two-standard-deviation
confidence band implied by the model and
that it returned to within one standard
deviation only during the sixth session. On
the seventh day after the episode, the stock
was trading at exactly the level predicted
by the model.
No. 376, June 2009
Financial Visibility and the Decision
to Go Private
Hamid Mehran and Stavros Peristiani
Many companies that privatized between
1990 and 2007 were fairly young public
firms, often with the same management
team making the crucial restructuring decisions both at the time of the initial public
offering (IPO) and the buyout. Mehran and
Peristiani investigate the determinants of
the decision to go private over a firm’s
public life cycle. Their evidence reveals
that firms with declining growth in analyst
coverage, falling institutional ownership,
and low stock turnover were more likely to
go private and opted to do so sooner. The
authors argue that a primary reason behind
the decision of IPO firms to abandon their
public listing was a failure to attract a critical mass of financial visibility and investor
interest. Consistent with earlier literature,
they also find strong support for Jensen’s
free-cash-flow hypothesis, which argues
that these corporate restructurings are a
useful tool in capital markets for mitigating
agency problems between insiders and outside shareholders.

www.newyorkfed.org/research

No. 377, June 2009
Globalized Banks: Lending to Emerging
Markets in the Crisis
Nicola Cetorelli and Linda S. Goldberg
Global banks played a significant role in
the transmission of the current crisis to
emerging-market economies. Flows
between global banks and emerging markets include both cross-border lending,
which has long been recognized as
responding significantly to shocks at home
or abroad, and internal capital-market
lending, which is the internal flow of funds
within a banking organization (such as
between the organization’s headquarters

and its offices in foreign locations). Adverse
liquidity shocks to developed-country
banking, such as those that occurred in the
United States in 2007 and 2008, have
reduced lending in local markets through
contractions in cross-border lending to
banks and private agents and also through
contractions in parent banks’ support of
foreign affiliates. Because all these forms of
transmission impinge on the lending channel in recipient markets, the ownership
structure of emerging-market banks does
not by itself provide sufficient basis for
identifying the degree of shock transmission from abroad. ■

Recently Published
Tobias Adrian. 2009. “Money, Liquidity,
and Monetary Policy,” with Hyun Song
Shin. American Economic Review 99, no. 2
(May): 600-5. Papers and Proceedings of
the 121st Annual Meeting of the American
Economic Association.
Linda Goldberg. 2009. “Understanding
Banking Sector Globalization.” IMF Staff
Papers 56, no. 1 (April): 171-97.

Beverly Hirtle. 2009. “Credit Derivatives
and Bank Credit Supply.” Journal of
Financial Intermediation 18, no. 2
(April):125-50.
Tanju Yorulmazer. 2009. “On the Dynamics
and Severity of Bank Runs: An Experimental
Study,” with Andrew Schotter. Journal of
Financial Intermediation 18, no. 2 (April):
217-41. ■

Research and Statistics Group

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Research Update

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Number 2, 2009

Papers Presented by Economists in the Research and Statistics Group
“Liquidity and Congestion,” Gara Afonso.
Centro de Estudios Monetarios y
Financieros seminar, Madrid, Spain, May 12.
Also presented at a Universidad Carlos III
de Madrid seminar, Madrid, Spain, May 18,
and a Universitat Pompeu Fabra seminar,
Barcelona, Spain, May 22.

8

“Systemic Risk and Liquidity in Payment
Systems,” Gara Afonso. Bank of Spain seminar, Madrid, Spain, May 14. With Hyun
Song Shin. Also presented at an IESE
Business School–Universidad de Navarra
seminar, Barcelona, Spain, May 25; the
Financial Intermediation Research Society
Conference on Banking, Corporate Finance,
and Intermediation, Prague, the Czech
Republic, May 28; and the Tenth Annual
Conference of the Association for Public
Economic Theory, Galway, Ireland, June 19.
“Competition and Quality Upgrading,”
Mary Amiti. Centre for Economic Policy
Research, European Research Workshop in
International Trade, Madrid, Spain, June 1.
With Amit Khandelwal.
“Aggregation and the PPP Puzzle in a
Sticky-Price Model,” Carlos Carvalho.
Central Bank of Brazil Eleventh Annual
Inflation Targeting Seminar, Rio de Janeiro,
Brazil, May 15. With Fernanda Nechio.
“Estimating the Cross-Sectional
Distribution of Price Stickiness from
Aggregate Data,” Carlos Carvalho. Bank of
Canada seminar, Ottawa, Ontario, Canada,
June 1. With Niels Dam. Also presented at
the 2009 North American Summer
Meeting of the Econometric Society,
Boston, Massachusetts, June 7.

F e d e r a l R e s e r v e B a n k o f N e w Yo r k

“Credit Market Competition and the
Nature of Firms,” Nicola Cetorelli. Brown
University Department of Economics seminar, Providence, Rhode Island, April 15.
Also presented at the Federal Reserve
Bank of Chicago Forty-fifth Annual
Conference on Bank Structure and
Competition, Chicago, Illinois, May 6.
“Credit Frictions and Optimal Monetary
Policy,” Vasco Cúrdia. Bank of Canada
seminar, Ottawa, Ontario, Canada, April 21.
With Michael Woodford.
“The Dynamics of International Trade
Invoicing,” Linda Goldberg. European
Central Bank–Bank of Canada seminar,
Frankfurt, Germany, June 5. With Cédric Tille.
“Globalized Banks: Lending to Emerging
Markets in the Crisis,” Linda Goldberg.
Banco de la República–National Deposit
Institute of Colombia seminar, Bogotà.
Colombia, May 29. With Nicola Cetorelli.
“Are Expectations about Economic Activity
Self-Fulfilling? An Empirical Test,”
Christian Grisse. Thirteenth Annual
International Conference on
Macroeconomic Analysis and International
Finance, held at the University of Crete,
Rethymno, Crete, Greece, May 29.
“Higher Order Beliefs and the
Comovement of Asset Prices,” Christian
Grisse. New York University International
Economics Seminar, New York City, April 21.
“International Financial Transmission:
Emerging and Mature Markets,” Christian
Grisse. Seventh INFINITI Conference on
International Finance, held at Trinity
College Dublin, Dublin, Ireland, June 9.
With Guillermo Felices and Jing Yang.

www.newyorkfed.org/research

“Fundamentals-Based Exchange Rate
Prediction Revisited,” Jan Groen. 2009
North American Summer Meeting of
the Econometric Society, Boston,
Massachusetts, June 6.
“Commodity Prices, Commodity
Currencies, and Global Economic
Developments,” Jan Groen and Paolo
Pesenti. NBER Twentieth Annual East
Asian Seminar on Economics, Hong Kong,
June 26.
“Unemployment Dynamics in the OECD,”
Ay egül ahin. 2009 Midwest
Macroeconomics Meetings, Indiana
University, Bloomington, Indiana, May 16.
With Michael Elsby and Bart Hobijn. Also
presented at a Yonsei University seminar,
Seoul, Korea, June 5.
“Credit Default Swap Auctions,” Asani
Sarkar. World Research Group conference,
New York City, April 20. With Jean
Helwege, Samuel Maurer, and Yuan Wang.
“Evolution of Risk and the Federal
Reserve’s Responses to the Crisis,” Asani
Sarkar. Bank of England Seminar Series,
London, United Kingdom, May 19. Also
presented at a University of Leicester
annual workshop, Leicester, United
Kingdom, May 21.
“Exchange Rate Risk, Transaction Costs,
and the Forward-Bias Puzzle,” Asani
Sarkar. Seventh INFINITI Conference
on International Finance, held at Trinity
College Dublin, Dublin, Ireland, June 8.
With Angelo Ranaldo.
“Bank Liquidity, Interbank Markets, and
Monetary Policy,” David Skeie. Universitat
Pompeu Fabra seminar, Barcelona, Spain,
June 3. With Xavier Freixas and Antoine
Martin. Also presented at the 2009 Western
Finance Association Annual Meetings,
San Diego, California, June 19.

“CONDI: A Cost-of-Nominal-Distortions
Index,” Andrea Tambalotti. University of
Pavia seminar, Pavia, Italy, April 7. With
Stefano Eusepi and Bart Hobijn. Also presented at seminars at Goethe University,
Frankfurt, Germany, April 21; the European
Central Bank, Frankfurt, Germany, April 22;
Bocconi University, Milan, Italy, April 30;
Einaudi Institute for Economics and
Finance, Rome, Italy, May 4; the Bank of
Italy, Rome, Italy, May 6; LUISS (Libera
Università Internazionale degli Studi
Sociali) Guido Carli, Rome, Italy, May 7;
Bilkent University, Ankara, Turkey, May 15;
and Sveriges Riksbank, Stockholm,
Sweden, May 27.
“Rethinking the Measurement of
Household Inflation Expectations:
Preliminary Findings,” Wilbert van der
Klaauw. Laval University seminar, Québec
City, Québec, Canada, April 25. With
Wändi Bruine de Bruin, Michael Bryan,
Simon Potter, and Giorgio Topa.
“Rollover Risk and Market Freezes,” Tanju
Yorulmazer. Financial Intermediation
Research Society Conference on Banking,
Corporate Finance, and Intermediation,
Prague, the Czech Republic, May 28. With
Viral Acharya and Douglas Gale. Also
presented at the 2009 Western Finance
Association Annual Meetings, San Diego,
California, June 18.
“College Major Choice and the Gender
Gap,” Basit Zafar. Fourteenth Annual
Meetings of the Society of Labor
Economists, Boston, Massachusetts, May 9.
“How Do College Students Form
Expectations?” Basit Zafar. CIRPÉE (Centre
Interuniversitaire sur le Risque, les Politiques
Économiques, et l’Emploi) Workshop on
Subjective Beliefs in Econometric Models,
Laval University, Québec City, Québec,
Canada, April 25. Also presented at the
2009 North American Summer Meeting
of the Econometric Society, Boston,
Massachusetts, June 7. ■

Research and Statistics Group

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Research Update

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Number 2, 2009

Research and Statistics Group
Publications and Papers:
April-June 2009
Publications are available at
www.newyorkfed.org/research/
publication_annuals/index.html.

ECONOMIC POLICY REVIEW
Forthcoming
Why Did FDR’s Bank Holiday Succeed?
William L. Silber

10

Below the Line: Estimates of Negative
Equity among Nonprime Mortgage
Borrowers
Andrew F. Haughwout and Ebiere Okah

STAFF REPORTS
No. 368, April 2009
Subprime Mortgage Pricing: The Impact
of Race, Ethnicity, and Gender on
the Cost of Borrowing
Andrew Haughwout, Christopher Mayer,
and Joseph Tracy

No. 369, April 2009
The Impact of Tax Law Changes on Bank
Dividend Policy, Sell-offs, Organizational
Form, and Industry Structure
Hamid Mehran and Michael Suher
No. 370, May 2009
Precautionary Reserves and
the Interbank Market
Adam Ashcraft, James McAndrews,
and David Skeie

No. 371, May 2009
Bank Liquidity, Interbank Markets,
and Monetary Policy
Xavier Freixas, Antoine Martin,
and David Skeie
No. 372, May 2009
Credit Default Swap Auctions
Jean Helwege, Samuel Maurer, Asani Sarkar,
and Yuan Wang
No. 373, May 2009
Barriers to Household Risk Management:
Evidence from India
Shawn Cole, Xavier Giné, Jeremy Tobacman,
Petia Topalova, Robert Townsend,
and James Vickery
No. 374, May 2009
The Persistent Effects of a False
News Shock
Carlos Carvalho, Nicholas Klagge,
and Emanuel Moench

No. 375, June 2009
Credit Quantity and Credit Quality: Bank
Competition and Capital Accumulation
Nicola Cetorelli and Pietro F. Peretto

No. 376, June 2009
Financial Visibility and the Decision
to Go Private
Hamid Mehran and Stavros Peristiani
No. 377, June 2009
Globalized Banks: Lending to Emerging
Markets in the Crisis
Nicola Cetorelli and Linda S. Goldberg

The views expressed in the publications and papers summarized in Research Update are those of the authors and
do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.

F e d e r a l R e s e r v e B a n k o f N e w Yo r k