February 5th noon seminar

Macro and Banking

Friday Virtual Seminar Series

Friday February 5, 2021

12:00 p.m. to 1:45 p.m.

This seminar is free.  Pre-registration is required. Register in advance at this Zoom link. Maximum capacity is 100 participants.

This session features two research papers on how information informs risk estimates and policies. The first one examines the trade-offs between target fund levels and insurer insolvency risk faced by deposit insurer. The authors develop a model and estimate the sizable gap between an optimal target fund level for the FDIC (as an example) and the official FDIC target fund. The paper also explores funding strategies to achieve alternative target fund levels.  The second paper uses a new approach to estimate and decompose the weight forecasters place on past predictions in expectation formation process. Forecasters put a weight on past predictions and the persistence of old information is affected by the size of new economic shocks. The author compares the optimal weight placed on past predictions to information frictions over time for US professional forecasters and find that explore the relationship between the optimal weights the magnitude of shocks.

Chair: Wenhua Di (Federal Reserve Bank of Dallas)

Bridging the Gap between the Deposit Insurance Fund Target Level and the Current Fund Level
Alexander B. Ufier (FDIC), Charles Kusaya (Zimbabwe Deposit Protection Corporation), John P. O’Keefe (Independent Consultant)

Expectation Formation and the Persistence of Shocks
Constantin Burgi (St. Mary’s College of Maryland)

Discussants: Kathleen McDill (FDIC); Chad Fulton, (Federal Reserve Board)