NEW YORK (MNI) – The following is the seventh and final section
of Federal Reserve Chairman Ben Bernanke’s remarks titled “Rethinking
Finance: Perspectives on the Crisis” prepared for the Russell Sage
Foundation and The Century Foundation:
6 An empirical analysis of the run on ABCP is provided in Daniel
Covitz, Nellie Liang, and Gustavo Suarez (forthcoming), “The Evolution
of a Financial Crisis: Collapse of the Asset-Backed Commercial Paper
Market,” Journal of Finance.
7 For an analysis of the determinants of runs on money market
mutual funds during the crisis, see Patrick McCabe (2010), “The Cross
Section of Money Market Fund Risks and Financial Crises,” Finance and
Economics Discussion Series 2010-51 (Washington: Board of Governors of
the Federal Reserve System, September),
www.federalreserve.gov/pubs/feds/2010/201051.
8 Prime brokers provide a variety of services for hedge funds and
other sophisticated institutional investors. Their services include
clearing of trades, financing of long securities positions, and
borrowing of securities to facilitate the establishment of short
positions.
9 See Brian F. Madigan (2009), “Bagehot’s Dictum in Practice:
Formulating and Implementing Policies to Combat the Financial Crisis,”
speech delivered at “Financial Stability and Macroeconomic Policy,” a
symposium sponsored by the Federal Reserve Bank of Kansas City, held in
Jackson Hole, Wyo., August 20-22,
www.federalreserve.gov/newsevents/speech/madigan20090821a.htm.
10 Primary dealers are broker-dealers that are designated as
counterparties by the Federal Reserve Bank of New York for its conduct
of open market operations in the implementation of monetary policy.
(7 of 7)
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