Issue #9 | November 28, 2017
Recently, from the Cleveland Fed
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Minority-owned firms experience challenges getting credit
Researchers from the Cleveland and Atlanta Feds find minority-owned firms reported feeling discouraged about applying for new funding at much higher rates than nonminority-owned firms. Read the 3rd report on data from the Fed’s 2016 Small Business Credit Survey.
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What history can teach us about “too big to fail”
The first bailout of a too-big-to-fail bank was that of the Bank of the Commonwealth in 1972. Cleveland Fed researchers explore this and subsequent bailouts to draw lessons about too-big-to-fail policy and conclude that the same issues that motivated earlier bailouts—particularly worries about banking concentration—are relevant today. Dive into the Economic Commentary.
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What do birth rates and life expectancy have to do with interest rates?
At a recent conference, Cleveland Fed President Loretta J. Mester highlighted the ways a slower-growing and older US population could affect the natural rate of unemployment and other key metrics that are considered by Fed officials when setting monetary policy. Read her keynote address from the Cato Institute’s annual monetary conference or listen to the Institute’s Daily Podcast from November 17, 2017.
By the Numbers
Question:
In what ways do the Cleveland Fed directors inform the Cleveland Reserve Bank and the Federal Reserve System?
Toby:
Cleveland Fed directors hail from large businesses and small businesses and represent the community, labor interests, consumers, and banks. We have 3 boards: our main board in Cleveland and our branch boards in Pittsburgh and Cincinnati. In total, it’s 23 people, each of whom has a different background and perspective. When we put these all together, like the old adage, the sum is greater than its parts.
During monthly board meetings, directors contribute to the Federal Reserve’s understanding of the economy by giving perspectives on economic conditions. Everyone participates. It’s a respectful environment, and no one hesitates to challenge someone’s point of view. It’s a robust conversation.
As a participant on the Federal Open Market Committee (FOMC), our president, Loretta Mester, takes these perspectives along with insights gathered through our other advisory councils to the FOMC meetings in DC 8 times a year, where she shares our region’s experience of the economy (the Cleveland Fed’s District comprises Ohio, western Pennsylvania, the northern panhandle of West Virginia, and eastern Kentucky). By virtue of the diverse backgrounds and perspectives of our directors and other business contacts across the Federal Reserve System, the discussions at the FOMC meetings contain a mosaic of economic information and analysis from all parts of the country.
All of this information is going to be used to help formulate monetary policy, so that range of views is very important.
Toby Trocchio
is an assistant vice president and corporate secretary at the Cleveland Fed. He is the liaison between the Bank’s executive leaders and the directors of the Bank’s 3 boards—its main board in Cleveland and its branch boards in Pittsburgh and Cincinnati.
On the Calendar
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November 30-December 1
2017 Financial Stability and Fintech Conference (Washington DC)
From around the Federal Reserve System
What makes an employment opportunity a “quality job”?
According to workers interviewed by researchers at the Federal Reserve Bank of Boston, it’s a broad set of features that starts with wages and includes access to affordable and quality benefits, predictability of work schedules, a safe and fair work environment, and income stability.
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