Monetary Policy

As banks grow, tiered regulation places them in stricter categories to address their greater risks. In new research, Pedro M. Batista finds that transition periods between tiers might delay when some higher standards become mandatory, potentially leaving growing banks exposed while known risks remain unresolved, as happened with Silicon Valley Bank. Federal Reserve reforms should address this gap between growing risks and delayed safeguards.

In new analysis, Madhav Parikh examines how competition among banks in the United States shapes the way monetary policy reaches depositors. Tracking U.S. banks from late 2021 through mid-2026, he finds that banks in more concentrated local markets repriced their deposit interest rates less than banks in competitive markets, both as the Fed raised rates and as it cut them.

The global economy is in the early stages of a second China shock as the Chinese economy moves up the manufacturing value chain to produce advanced technology for export. China’s advantage lies in government subsidies and an artificially suppressed exchange rate. If advanced economies in the West are to avoid the repetition of job loss and continued trade deficits witnessed over the last two decades, or the pyrrhic policies like tariffs implemented to address these harms, they must pursue institutional change, writes Joshua Banerjee.

2026 marks the fiftieth anniversary of University of Chicago professor Milton Friedman’s Nobel Memorial Prize in Economic Sciences. Michael D Bordo reflects on how Milton Friedman’s legacy has developed in this time. While Friedman’s revolutionary idea of monetarism has been superseded in some ways, his contributions have played a key role in the evolution of monetary policy and remain critical to contemporary macroeconomic research and central bank policy.

The European Union can pursue financial sovereignty through the digital euro, but sovereignty over money doesn't mean sovereignty over the markets that form around it, writes Jeff Alvares.

If confirmed, Kevin Warsh would be the latest Federal Reserve chair whose career took place primarily on Wall Street rather than in academia. The ascent of Wall Street veterans in the Fed risks skewing monetary policy to favor large investors and the wealthiest, writes Franny Philos Sophia.

Countries representing 98% of global GDP are exploring central bank digital currencies. They must devise digital infrastructure to maximize competition, writes Jeff Alvares.

The following is an excerpt from "Private Finance, Public Power: A History of Bank Supervision in America" by Peter Conti-Brown and Sean H. Vanatta, now out at Princeton University Press. 

Stigler Center Assistant Director Matt Lucky reviews Kenneth Rogoff’s new book, Our Dollar, Your Problem: An Insider’s View of Seven Turbulent Decades of Global Finance, and the Road Ahead, which reflects on the rise and ongoing fall of the American dollar’s global dominance. Rogoff discusses his book with Bethany McLean and Luigi Zingales on this week’s Capitalisn’t episode, which you can listen to here.

The United States President has halted plans for a central bank digital currency: a mere show of strength to undermine the Fed’s independence, writes...