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Financial Crisis and Information Gaps. Michael Gibson Federal Reserve Board July 8, 2009. This presentation represents the views of the author and should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

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Financial crisis and information gaps

Financial Crisis and Information Gaps

Michael Gibson

Federal Reserve Board

July 8, 2009


This presentation represents the views of the author and should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.


3 stages of crisis
3 stages of crisis should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • Subprime

  • Liquidity and deleveraging

  • Global shock to confidence


Information gaps where to focus
Information gaps: where to focus? should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • Subprime

  • Liquidity and deleveraging

  • Global shock to confidence


Liquidity and leverage where were the data gaps
Liquidity and leverage: where were the data gaps? should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • “Shadow banking system”

    • Maturity transformation and credit-risk-taking off the balance sheets of banks


Elements of shadow banking system
Elements of shadow banking system should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • ABCP ($1.2 trillion)

  • Money market mutual funds ($3 trillion)

  • SIVs ($400 billion)

  • Repo markets ($5 trillion)

  • GSEs ($1.7 trillion)

  • Auction-rate securities ($300 billion)


Shadow banking system in stress
Shadow banking system in stress should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • Maturity mismatch led to runs

  • Some elements disappeared

    • SIVs

    • Auction-rate securities

  • Some received extraordinary support

    • ABCP

    • MMMF

    • Repo

    • GSEs


How to close the data gaps
How to close the data gaps? should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or other members of its staff.

  • Improve statistics on intermediation outside the banking system

    • Shadow banking system

    • Securitization

    • Hedge funds

  • Goal: track broad trends


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