by Summary:
This article continues the previous discussion of bank net interest margins. In it, I discussed how changes in the yield curve changed the net interest margin (NIM) for banks. This showed up historically — when bank balance sheets were shattered by the combination of holding long-dated mortgages with low fixed coupons versus having a sky-high short-term rate imposed by deranged Monetarists. In this article, I address a common macroeconomic story: yield curve inversions cause recessions by the alleged effect on NIM. As a spoiler, I do not think that story holds water in “modern” banking systems..…Bond EconomicsYield Curve Inversions And RecessionsBrian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
This article continues the previous discussion of bank net interest margins. In it, I discussed how changes in the yield curve changed the net interest margin (NIM) for banks. This showed up historically — when bank balance sheets were shattered by the combination of holding long-dated mortgages with low fixed coupons versus having a sky-high short-term rate imposed by deranged Monetarists. In this article, I address a common macroeconomic story: yield curve inversions cause recessions by the alleged effect on NIM. As a spoiler, I do not think that story holds water in “modern” banking systems..…Bond EconomicsYield Curve Inversions And RecessionsBrian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
New Economics Foundation writes Is the Labour government delivering on its promises?
John Quiggin writes Dispensing with the US-centric financial system
New Economics Foundation writes Whose growth is it anyway?
Matias Vernengo writes What is heterodox economics?
This article continues the previous discussion of bank net interest margins. In it, I discussed how changes in the yield curve changed the net interest margin (NIM) for banks. This showed up historically — when bank balance sheets were shattered by the combination of holding long-dated mortgages with low fixed coupons versus having a sky-high short-term rate imposed by deranged Monetarists. In this article, I address a common macroeconomic story: yield curve inversions cause recessions by the alleged effect on NIM. As a spoiler, I do not think that story holds water in “modern” banking systems..…Bond Economics
Yield Curve Inversions And Recessions
Brian Romanchuk