The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
The Outreach & Education function engages, empowers and educates the public in the Second District. Our outreach mission furthers the Bank’s commitment to the region by listening to the communities we serve and developing programs, analysis and sponsored conferences and clinics to help meet their needs. Our education mission aims to advance public knowledge about the Federal Reserve System and its role in the economy.
We document that financial intermediary balance sheet aggregates contain strong predictive power for excess returns on a broad set of equity, corporate, and Treasury bond portfolios. Our results provide support to the hypothesis that financial intermediary balance sheet quantities matter in the determination of risk premia. We also explore the extent to which the intermediary variables that predict excess returns impact real economic activity. Our findings point to the importance of financing frictions in macroeconomic dynamics and asset pricing.