På nettsidene til Federal Reserve sin avdeling i Minneapolis ligger et intervju med Gary Gorton, professor i finans ved Yale.
Dette intervjuet er interessant fordi Gorton en gang var konsulent for AIG Financial Products og hans bok Slapped by the Invisible Hand inneholder mye om skyggebanksystemet og hvordan han mener det fungerer. Jeg legger ved noen paragrafer som jeg syntes er interessant lesing, hele intervjuet ligger her.
Before the Civil War, banking involved issuing private money—that is, banks issued their own currency or bank notes. And this system worked in the way economists would expect it to work. The private bank money did not trade at par when it circulated any significant distance from the issuing bank. Instead, it was subject to a discount, so that a bank note issued by a New Haven bank as a $10 note might only be worth $9.50 at a store in New York City, for example.
Such discounts from par reflected the risk that the issuing bank might not have the $10—redeemable in gold or silver coins—by the time the holder took the note back to New Haven from New York. The discounts from par were established in local markets. But you can see the problem of trying to buy your lunch when the cook has to figure out the discount. It was simply hard to buy and sell things in such a world.
A big innovation in that period was to back the money by collateral, by state bonds. It turned out that this didn’t always work very well because the bonds themselves were risky. The National Banking Act then corrects this by having the government take over money and issue greenbacks, or federal government notes backed by Treasuries. That was the first time in American history that money traded at par. That was 1863.
The National Banking Acts (there were two of them) are arguably the most important legislation in the financial sector in U.S. history. But what’s interesting, and the reason I bring this up, is that as that was going on, a shadow banking sector was developing. And this shadow banking sector first really makes itself felt in the Panic of 1857 when depositors run and demand currency from their checking accounts.
So, after the Civil War, there’s no problem with currency [because greenbacks were backed by the federal government], but we have this other form of bank money: checking accounts—which appears to be shadow banking.
It develops into something very large and repeatedly has crises. In the late 19th century, academics were literally writing articles with titles like “Are Checks Money?” in top economics journals. And in 1910, the National Monetary Commission, which is the precursor to the Federal Reserve System, commissions 30-some books, one of which is about the extent to which checks are used as currency for transactions. So they’re still studying it in 1910.
Let’s just review how repo operates. For repo to work, firms that want to borrow cash (to finance their activities) must hold a sufficient amount of bonds on their balance sheets to be used as collateral when depositors (effectively lenders: money market mutual funds, other institutional investors or corporations seeking a place to save large quantities of cash in the short term) arrive to put their money in the “bank”—the firm wanting to borrow cash. In the example I used earlier, the “bank” was Lehman Brothers, but most financial firms using repo didn’t collapse as dramatically as Lehman did.
So those bonds, if they’re securitization bonds, asset-backed securities, are linked to portfolios of bank loans. Because of this link, traditional banking and shadow banking are integrated. They’re part of the same system. Traditional banking funds itself in large part by selling loans to firms that use those loans for collateral for this other category of loans.
This is a crucial, crucial point. Because if you think about the current unemployment rate and wonder, “Well, banks aren’t lending. What could we do?” A very practical, constructive step would be to help the securitization market, which would at the same time help traditional banks.
The fact is that this market is broken. And shadow banking very importantly is not a separate system from traditional banking. These are all one banking system. It happened that repo was concentrated in certain firms, many of which were the old investment banks, but also in the large quasi-investment banks or commercial banks.
In summary, I would describe shadow banking as the rise to a significant extent of a very old form of bank money called repo, which largely uses securitized product as collateral and meets the needs of institutional investors, states and municipalities, nonfinancial firms for a short-term, safe banking product.
The way standard models deal with it is, I think, incorrect. A lot of macroeconomists think in terms of an amplification mechanism. So you imagine that a shock hits the economy. The question is: What magnifies that shock and makes it have a bigger effect than it would otherwise have? That way of thinking would suggest that we live in an economy where shocks hit regularly and they’re always amplified, but every once in a while, there’s a big enough shock … So, in this way of thinking, it’s the size of the shock that’s important. A “crisis” is a “big shock.”
I don’t think that’s what we observe in the world. We don’t see lots and lots of shocks being amplified. We see a few really big events in history: the recent crisis, the Great Depression, the panics of the 19th century. Those are more than a shock being amplified. There’s something else going on. I’d say it’s a regime switch—a dramatic change in the way the financial system is operating.
This notion of a kind of regime switch, which happens when you go from debt that is information-insensitive to information-sensitive is different conceptually than an amplification mechanism. So there’s a problem. Conceptually, the notion of adding things to existing models—a friction or an amplification mechanism—retains this overall paradigm in which financial intermediation generally has no role. I don’t think that is going to work.
Lovverk og måling
An oversight council like the FSOC has no chance of understanding anything if we don’t have better measurement systems. That’s why in Dodd-Frank, they set up the Office for Financial Research. And this goes to the roots of economics, right? Think of Burns and Mitchell on business cycles. Think of Kuznets on national income accounting. And there are economists who think about measuring productivity. Now it’s time for us to work on measuring risk.
Go back to macroeconomics. Macroeconomics as a paradigm in large part is determined by what is measured. If I told you that I had a 30-year panel data set of firms by sector and I had the deltas of the change in value with respect to certain systemic risks and idiosyncratic risks, people would calibrate models to measures of risk, right?
The way models are built, and the way people think, is determined in large part by what we measure. It’s determined by Kuznets, basically. So it’s hard to even imagine how you’re going to build models if we don’t measure things that are more directly associated with what we would like to know.
So we wrote this little paper about measurement—it’s really half a paper at the moment; it’s a draft. And my coauthors organized this NBER [National Bureau of Economic Research] conference a couple of weeks ago in New York. (I told them they should do it; they’re younger than me [laughs].) And it was a really interesting conference, I must say. But the reason it was so interesting is that everybody was totally confused. People had all kinds of interesting ideas, I thought, about what to measure.
Det er mer, mye mer av intervjuet på Minneapolis Fed sine sider.