Center for Financial Stability

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

Latest Research

CFS Divisia M4, which is the broadest and most important measure of money, grew by 1.8% in June 2022 on a year-over-year basis versus 2.1% in May.   June Data Release

The Fed Must Emulate the Tactics of Volcker's Fight Against inflation

CFS Advisory Board Member and Senior Fellow Sheila Bair writes in the Financial Times that for many years, the Fed has unwisely paid little attention to the huge volume of money its accommodative polices have created. It now needs to follow Volcker's example and attack excess money supply head-on. More

The Ponzi Bubble in China's Property Market is Deflating

Robert Z. Aliber offers his latest thoughts on China's property market, Evergrande, and future economic prospects more broadly. He first discussed these dynamics in the epilogue of the seventh edition of Manias, Panics and Crashes: A History of Financial Crises.  More

Regulators Must Act to Rein in Wall Street Risks as Rates Rise

CFS Advisory Board Member and Senior Fellow Sheila Bair writes in the Financial Times that the Fed has an even greater challenge in its role as a regulator to maintain financial stability as it raises interest rates. If there is another crisis, we cannot afford to prioritise Wall Street over Main Street.
More

How the Fed Rigs the Bond Market: Sales by "vigilantes" used to serve as a warning of inflationary policies. The signal has been muted.

The Wall Street Journal published an op-ed by Lawrence Goodman that offers specific actions for Congress, Treasury, and the Fed to defuse imbalances and gradually restore market dynamics to the determination of bond yields.   More

Two Measures for the Fed and Investors

With inflation in excess of 5% in each of the last 5 months, two measures should influence Fed and investor decisions going forward.  More

Is the BREXIT Bifurcation Causing Chaos in the United Kingdom?

CFS Director of Advances in Monetary and Financial Measurement (AMFM) Professor William A. Barnett delivered the keynote lecture at the UK Conference, "Post BREXIT: Uncertainty, Risk Measurement, and COVID-19 Challenges."   More

New Report Highlights Rising Sovereign Credit Risks

CFS Senior Fellow David Beers and co-authors Elliot Jones, Zacharie Quiviger and John Fraser Walsh update the BoC-BoE sovereign default database and related research. They highlight that globally, the value of sovereign defaults reached an estimated US$443 billion last year, up from US$300 billion in 2019. The authors expect defaults to continue to grow this decade and strain the ad hoc multilateral framework for resolving them.  More

Now, Inflation is Clear and Global

Across the board higher consumer price inflation in the United States removes any ambiguity or doubt regarding the existence of price pressures beyond transitory or base effects. The phenomenon also extends well beyond simply the United States. It is global.   More

New Money Growth and Inflation

Charts highlight how 1) broad money growth is beginning to accelerate and 2) Inflation will likely stretch beyond the Fed’s comfort zone.   More

Post-Pandemic Economic Risks

Professor William A. Barnett - Director of Advances in Monetary and Financial Measurement at CFS - highlights how the post-pandemic period could see a conflict between Treasury's desire to minimize the cost of government debt finance and the Fed's need to moderate inflation.  More


 
 
Events
 
Discussion with Patrick Harker, President of the FRB of Philadelphia

The Center for Financial Stability (CFS) hosted remarks and a discussion with Patrick Harker, President of the FRB of Philadelphia on the economic outlook, monetary policy, and financial stability.   View the video.

 
Discussion with Fed Gov Waller on Economic and Monetary Outlook

The Center for Financial Stability (CFS) hosted remarks and a discussion with Federal Reserve Board Governor Christopher J. Waller. Governor Waller on the economic and monetary outlook. View the video.

 
Future of the Global Monetary and Financial System:
75 years after Bretton Woods

Bretton Woods 2019 Conference Image
Bretton Woods 2019 Conference Image
Bretton Woods 2019 Conference Image
Bretton Woods 2019 Conference Image
Bretton Woods 2019 Conference Image

The conference commemorated the 75th anniversary of the Bretton Woods agreement by gathering high-level thinkers from all over the world to evaluate extraordinary monetary policies, spillovers, financial innovation, and the IMF.

Please see more about the roundtable agenda or summary.

 
The Global Financial Crisis: Lessons for the Future

This conference, co-sponsored by CFS, the Central Bank of Iceland and the University of Iceland, examined the causes of the 2008 crisis, regulatory responses, and lessons for the future.

Please see more about the conference including program and presentations.

 
Bank of England Conference in Honor of William A. Barnett

Discussions at the “Financial Services Indices, Liquidity and Economic Activity” conference focused on understanding and assessing the macroeconomic implications of liquidity, the liquidity creation process, and the impacts of liquidity on financial markets and economic activity.

Please see more about the conference including program and presentations.

 
Bretton Woods 2014 Conference Image

Bretton Woods 2014 gathered prominent leaders from government, business, and academia in a working-group environment to focus on the future of finance and the international monetary system. Please see more about the conference to see other remarks, presentations, and photos from the conference.

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News & Views

Friday, August 12, 2022

Highlights

Peter Coy in The New York Times quoted Lawrence Goodman and charted CFS Divisia DM4 growth in “Is the U.S. Economy Growing or Not?.”

Inflation is a political challenge as well as an economic one” - Martin Wolf of the Financial Times charted CFS Divisia DM4 growth in his discussion about the importance of money.

Russian Debt Default Could Become the Ukraine Conflict's Next Bargaining Chip” - CFS senior fellow David Beers discussed the Russian debt crisis in his guest commentary in Barrons.

Professor William A. Barnett – CFS director of Advances in Financial and Monetary Measurement (AMFM) – questions “Why were the Fed's inflation forecasts so wrong?” in his guest commentary in The Kansas City Star.

As inflation rises, the monetarist dog is having its day. Economists are being forced to relearn lessons about the importance of the money supply. Martin Wolf of the Financial Times cites CFS Divisia in his piece discussing the importance of money.

Inflation has Fed critics pointing to spike in money supply” - In his piece at The Washington Post, David J. Lynch asks the question “why does the Fed ignore the money supply”? It covers much ground, references Bill Barnett's work as CFS director of Advances in Monetary and Financial Measurement (AMFM), and quotes Steve Hanke, CFS special counsellor and Johns Hopkins professor.

Investors: beware liquidity holes - Markets could soon see a shortage of buyers for some assets relative to supply” Gillian Tett of the Financial Times quotes CFS President Lawrence Goodman.

How the Fed Rigs the Bond Market: Sales by 'vigilantes' used to serve as a warning of inflationary policies. The signal has been muted.The Wall Street Journal published an op-ed by Lawrence Goodman that offers specific actions for Congress, Treasury, and the Fed to defuse imbalances and gradually restore market dynamics to the determination of bond yields.

Special Consellor Jack Malvey was quoted in “Markets Bet Inflation Is Hot Enough to Spur Reluctant Rate Hikes” by Liz McCormick and Garfield Reynolds of Bloomberg.

Congratulations to William R. Rhodes - CFS Advisory Board Chairman - for his promotion to the rank of Commander in the Legion of Honor by France. Read his remarks at the ceremony.

CFS IN THE NEWS

Discussion with President Patrick T. Harker of the Federal Reserve Bank of Philadelphia
President Harker focussed on the economic outlook, monetary policy, and financial stability.  View video

Private Roundtable: The Chinese Communist Party and the financial deterioration of China
Author and scholar, Carl E. Walter discussed his forthcoming book The Red Dream: the Chinese Communist Party and the financial deterioration of China. View the slides.

Discussion with Fed Gov Waller
Federal Reserve Board Governor Christopher J. Waller offered remarks and discussed Economic and Monetary Policy with CFS on November 19.  View video

Private Roundtable: CFTC Giancarlo on the Future of Cryptocurrencies
The Honorable J. Christopher Giancarlo discussed the rise of cryptocurrencies, Bitcoin, central bank digital currency, as well as his forthcoming book "CryptoDad: the Fight for the Future of Money."

Private Virtual Roundtable: Time Diversification: Dynamic Risk Management - CFS hosted a private virtual roundtable with Myron Scholes.