NEW YORK—The Federal Reserve Bank of New York today released “Review of New York Fed Studies on the Effects of Post-Crisis Banking Reforms,” a new article in the latest issue of the Economic Policy Review, the New York Fed’s policy-oriented journal focused on macroeconomic, banking and financial market topics.
In 2017, the New York Fed initiated a project to examine the effects of regulatory reforms since the 2007-08 financial crisis. The primary focus of the project, which was completed in June 2018, was how post-crisis regulatory changes affected the risk taking, funding costs, and profitability of banks, as well as their impact on liquidity. The Economic Policy Review article released today surveys the twelve studies that make up the project and places their main results in the context of the current academic and policymaking debate on the effects of post-crisis changes to financial regulation.
The article concludes that many of the findings aligned with theoretical predictions or results of earlier studies of the reforms, yet some studies produced results that contrast with evidence in the academic literature. Overall, the studies showed that banks did respond actively to the new regulations, suggesting that broadening the research to assess additional outcomes would be fruitful.
The twelve studies are also the subject of a just completed blog series on Liberty Street Economics.
This article is written by Richard K. Crump and João A. C. Santos. Crump is an assistant vice president and head of the New York Fed’s Capital Markets Function. Santos is a senior vice president and policy leader for microprudential supervision in the New York Fed’s Financial Intermediation Function.