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1. Central Bank Digital Currency: The Risks and the Myths

Author:
Nicholas Anthony and Norbert Michel
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Central bank digital currencies (CBDCs) have the potential to radically transform the American financial system—ultimately usurping the private sector and endangering Americans’ core freedoms. Although CBDCs have gained the attention of politicians, central bankers, and the tech industry, this experiment should be left on the drawing board. This paper provides a summary of why Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC.
Topic:
Finance, Economy, Fiscal Policy, Banking, and Digital Currency
Political Geography:
North America and United States of America

2. Healthier Firms for a Stronger Recovery: Policies to Support Business and Jobs in Latin America and the Caribbean

Author:
Andrew Powell and Liliana Rojas-Suarez
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Center for Global Development (CGD)
Abstract:
This report—the product of a joint working group convened by the Center for Global Development and the Inter-American Development Bank—focuses on firms and labor markets in Latin America and the Caribbean during the COVID-19 crisis and the highly uncertain recovery phase now underway. The ongoing Russian war in Ukraine, volatility in international financial markets, and fears of global stagflation (low growth and high inflation) combine with the impacts of the pandemic to make the economic environment particularly challenging. Through a balance sheet analysis, the report describes how larger firms have navigated the crisis by cutting back on vari­able costs and investment. It also focuses on small and medi­um-size enterprises (SMEs), which appear to have suffered more in terms of closures and restrictions on credit access. The impacts on labor markets were unprecedented, with steep falls in employment and participation rates. A key question is whether the reallocation of resources, favor­ing firms in sectors that were hit less hard and able to take advantage of digital technologies, will persist. Key dangers are that informality is higher than ever, that productive resources remain trapped in small and less productive or ultimately unviable enterprises, and that firms are not rebuilding their capital stocks quickly. Drawing on an analysis of firms and labor markets, the report provides a set of recommendations for policymakers in the region and suggestions for international financial institutions to assist productive firms to invest, support the growth of new firms, and enhance labor market performance.
Topic:
Development, Economics, Finance, and Banking
Political Geography:
South America, Latin America, Caribbean, and North America

3. ABCs of the IFIs: Understanding IDA20

Author:
Jocilyn Estes and Erin Collinson
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
With the COVID-19 pandemic hitting government balance sheets especially hard in low-income countries, the World Bank’s shareholders—including the United States—agreed to an advance replenishment of its grant and low-interest loan window, the International Development Association (IDA). By holding a pledging session one year early, donors sought to ensure IDA, which serves the world’s poorest countries, would have the resources to provide financing where it was needed most. In December 2021, following the final meeting of the 20th replenishment of IDA (IDA20), the World Bank announced a $93 billion replenishment package, leveraging $23.5 billion in contributions from 48 high- and middle-income countries. The United States reclaimed its position as IDA’s top donor, pledging $3.5 billion over three years to support pandemic response and an economic rebound in the world’s poorest countries. The United States has long had a vested interest in the World Bank, and in IDA in particular, working to ensure it is well run and resourced appropriately, and that its policy agenda reflects US interests. The US Congress plays a pivotal role in overseeing US engagement with the institution—managed by the Treasury Department—and providing funding to enable the US to meet its commitments. Due to the acceleration of IDA19, the US has two IDA installments due this year. The president’s fiscal year 2023 (FY23) budget request includes funding for a final payment to deliver on its IDA19 commitment and a partial first installment toward the latest US pledge to IDA.
Topic:
Development, Multilateralism, Sustainability, and Banking
Political Geography:
North America and United States of America

4. Banking Bailout Law: A Comparative Study of the United States, United Kingdom and the European Union

Publication Date:
10-2021
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
Our expert panellists discussed Virág Blazsek’s book, Banking Bailout Law: A Comparative Study of the United States, United Kingdom and the European Union, which examines the different bank bailout and resolution techniques and tools through carefully selected case studies. The panel explored the pros and cons of the different legal and regulatory options identified by the book to reconstruct a regulatory framework that might better serve countries in future financial crises.
Topic:
Economics, European Union, Finance, Banking, and Bailout
Political Geography:
United Kingdom, Europe, North America, and United States of America

5. Book Talk. America Kleptocracy by Casey Michel

Publication Date:
12-2021
Content Type:
Video
Institution:
The Harriman Institute
Abstract:
Please join us for a discussion with Casey Michel, author of American Kleptocracy: How the U.S. Created the World's Greatest Money Laundering Scheme in History (St. Martin's Press, November 2021). Moderated by Alexander Cooley, Director of the Harriman Institute. A remarkable debut by one of America's premier young reporters on financial corruption, Casey Michel's American Kleptocracy offers an explosive investigation into how the United States of America built the largest illicit offshore finance system the world has ever known. An indefatigable young American journalist who has virtually cornered the international kleptocracy beat on the US end of the black aquifer. —The Los Angeles Review of Books For years, one country has acted as the greatest offshore haven in the world, attracting hundreds of billions of dollars in illicit finance tied directly to corrupt regimes, extremist networks, and the worst the world has to offer. But it hasn’t been the sand-splattered Caribbean islands, or even traditional financial secrecy havens like Switzerland or Panama, that have come to dominate the offshoring world. Instead, the country profiting the most also happens to be the one that still claims to be the moral leader of the free world, and the one that claims to be leading the fight against the crooked and the corrupt: the USA. American Kleptocracy examines just how the United States’ implosion into a center of global offshoring took place: how states like Delaware and Nevada perfected the art of the anonymous shell company, and how post-9/11 reformers watched their success usher in a new flood of illicit finance directly into the U.S.; how African despots and post-Soviet oligarchs came to dominate American coastlines, American industries, and entire cities and small towns across the American Midwest; how Nazi-era lobbyists birthed an entire industry of spin-men whitewashing trans-national crooks and despots, and how dirty money has now begun infiltrating America's universities and think tanks and cultural centers; and how those on the front-line are trying to restore America's legacy of anti-corruption leadership—and finally end this reign of American kleptocracy.
Topic:
Corruption, Finance, Kleptocracy, and Banking
Political Geography:
North America and United States of America

6. Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election

Author:
Thomas Ferguson, Paul Jorgensen, and Jie Chen
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The U.S. presidential election of 2016 featured frontal challenges to the political establishments of both parties and perhaps the most shocking election upset in American history. This paper analyzes patterns of industrial structure and party competition in both the major party primaries and the general election. It attempts to identify the genuinely new, historically specific factors that led to the upheavals, especially the steady growth of a “dual economy” that locks more and more Americans out of the middle class and into a life of unsteady, low wage employment and, all too often, steep debts. The paper draws extensively on a newly assembled, more comprehensive database of political contributions to identify the specific political forces that coalesced around each candidate. It considers in detail how different investor blocs related to the Republican Party and the Trump campaign as the campaign progressed and the role small contributors played in the various campaigns, especially that of Vermont Senator Bernie Sanders. It also critically evaluates claims about the final weeks of the election in the light of important overlooked evidence.
Topic:
Economics, Political Economy, Elections, Finance, Donald Trump, Political Parties, and Banking
Political Geography:
North America, Global Focus, and United States of America

7. Power and Crisis: Explaining Varieties of Commercial Banking Systems in Argentina, Brazil and Mexico

Author:
Sebastian Etchemendy and Puente Ignacio
Publication Date:
01-2017
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
In the early 1980s Argentina, Brazil, and Mexico had commer- cial banking sectors that were dominated by local banks. The largest countries in Latin America were subjected to common international economic pressures during both the neoliberal 1980s and 1990s – includ- ing the expansion of capital markets in the periphery and integration into the regional trade agreements NAFTA and Mercosur – and the post- 1998 financial turmoil. By 2015, however, the three countries had con- solidated alternative commercial banking systems: domestic private group dominated (Brazil), mixed (i.e., ownership more evenly divided among public, private domestic, and foreign banks (Argentina), and foreign bank dominated (Mexico). The article traces these alternative outcomes to the power of prereform private financial groups, the viru- lence of “twin crises” in the transition from fixed to floating exchange rates, and the (contingent) role played by government ideology.
Topic:
Regional Cooperation, Finance, Trade, and Banking
Political Geography:
Brazil, Argentina, South America, Latin America, North America, and Mexico

8. Ethics vs. Ethos in US and UK Megabanking

Author:
Edward J. Kane
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Company law in the US and UK fails to acknowledge that authorities’ propensity to rescue giant banks from the consequences of insolvency assigns taxpayers a coerced and badly structured equity stake in too-big-to-fail institutions. The entrenched managerial norm of maximizing stockholder value lends a misplaced legitimacy to efforts by TBTF managers to take on dangerous levels of tail risk because their bank’s deep downside is effectively eliminated by the prospect of unlimited taxpayer support. Conventional tools of prudential regulation constrain but do not de-legitimate this behavior. To accomplish that end, this paper calls for: (1) a formal recognition of the fiduciary duties that TBTF firms owe to taxpayers and (2) criminalizing aggressive pursuit of safety-net subsidies as “theft by safety net.”
Topic:
Finance, Ethics, Banks, Banking, and Ethos
Political Geography:
United Kingdom, Europe, North America, and United States of America

9. Mine the (Development) Gap? A Case Study

Author:
Lauren Konken and Geneva List
Publication Date:
01-2016
Content Type:
Policy Brief
Institution:
Institute for the Study of International Development, McGill University (ISID)
Abstract:
How can strategic partnerships shape the lives and economic opportunities of communities surrounding large-scale mining operations? The Inter-American Development Bank (IDB), Anglo American PLC, and TechnoServe have pioneered a pilot partnership to implement a regional development plan that leverages the resources and skills of each contributing partner. The project, Beyond Extraction: Economic Opportunities in Communities Hosting Mining Operations, develops a flexible multifaceted program based on three pillars – local procurement, workforce development, and local government capacity building. From this systemic approach, onthe-ground operations will be tailored to the needs of local municipalities surrounding select Anglo American mining operations in each participating country. Each initiative builds on nearly a decade of program conceptualization and implementation through a pre-existing partnership between Anglo American and TechnoServe, combining lessons learned and resources from four enterprise development programs that have been executed collaboratively since 2006. Overall this new strategic partnership serves to elevate and expand Anglo American’s core business practices with the goal of developing local mining communities in ways that ensure sustainability and productivity beyond the lifespan of their mining operations in the region. In this case study we discuss the development of this strategic partnership as well as the challenges it has faced prior to its approval by the IDB in the summer of 2016. Within the context of global mining operations and the subnational regions in which it plans to operate, we analyze how the program goes beyond corporate social responsibility (CSR) as a public private partnership for development (PPPD). As the IDB develops an agenda for work within the extractives sector, this pilot builds on major corporate-bank partnerships surrounding large scale mining operations with a regional focus. The project serves as a precedent and key learning exercise from a multinational perspective for all partners involved as to the challenges and opportunities of strategic partnerships in the extractive sector.
Topic:
Development, Natural Resources, Mining, and Banking
Political Geography:
South America, North America, and Global Focus

10. Political Lending

Author:
Ahmed Tahoun and Florin P. Vasvari
Publication Date:
08-2016
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using a unique dataset provided by the Center for Responsive Politics (CRP), we document a direct channel through which financial institutions contribute to the net worth of members of the U.S. Congress, particularly those sitting on the finance committees in the Senate and the House of Representatives. These individuals report greater levels of leverage and new liabilities as a proportion of their total net worth, relative to when they are not part of the finance committee or relative to other congressional members. Politicians increase new liabilities by over 30% of their net worth in the first year of their finance committee membership. We do not find similar patterns for members of non-finance powerful committees. We find no evidence that finance committee members arrange new personal liabilities ahead of their appointments to the committees. Finance committee members also report liabilities with lower interest rates and longer maturities. Finally, focusing on banks that lend to U.S. Congress members, we find that the weaker performing financial institutions lend to more finance committee members and provide more new debt to these politicians. Our findings suggest that lenders may create political connections with finance committee members in an attempt to obtain regulatory benefits. !
Topic:
Debt, Institutions, Fiscal Policy, Political Class, and Banking
Political Geography:
North America and United States of America