WIFPR Blog

The WIFPR Blog highlights important research in finance and examines current policy issues. Posts include book reviews, policy briefs, and expert analysis from WIFPR affiliates.

Research Spotlight: Will ETFs Drive Mutual Funds Extinct?

The WIFPR Blog publishes posts spotlighting research by members of the Wharton community. In this post, Anna Helmke, PhD candidate in Finance, discusses her work on ETFs and mutual funds. By Anna Helmke The rise of passive investing has been nothing short of revolutionary. At the heart of this phenomenon lies the idea that the average investor ...Read More

Research Spotlight: Instant Payment Systems and Competition for Deposits

The WIFPR Blog publishes posts spotlighting research by members of the Wharton community. In this post, Sergey Sarkisyan, PhD candidate in Finance, discusses his work on instant payments and the competition for deposits. By Sergey Sarkisyan The banking industry is highly concentrated. Despite the fact that there are 4,200 banks...Read More

Crypto, Digital Currency, and Interoperability Roundtable

September 18, 2023 This post summarizes key takeaways from a September roundtable on digital currencies. Chair Sarah Hammer, Executive Director at the Wharton School and Adjunct Professor at the University of Pennsylvania Law School Speakers Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore Tara Rice, Head of Secretariat, Committee on Payments and Market Infrastructures, BIS Piero Cipollone, Executive Board of the ...Read More

A Few Thoughts on Basel III Endgame

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By David Zaring On November 7, 2023, the Wharton Initiative on Financial Policy and Regulation (WIFPR) convened a number of academics, lawyers, economists, and bankers ...Read More

The Real Endgame: Addressing the Challenges of Modern-Day Bank Runs

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By Sarah Hammer The endgame is here.  The denouement of Basel III arrives over a decade since its introduction, signifying a pivotal moment in global ...Read More

Rethinking Banking Regulation and the Basel III Endgame

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By Tomasz Piskorski Summary The 2023 bank failures underscore the fundamental issue of banking vulnerability rooted in the extensive financial leverage employed by banks and their ...Read More

WIFPR Roundtable on Basel III Endgame

On Tuesday, November 7, 2024, the Wharton Initiative on Financial Policy and Regulation (WIFPR) hosted a roundtable on Basel III Endgame. The roundtable convened two dozen academic, industry, and policy experts to discuss the proposed rule by the federal banking agencies (Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency) ...Read More

Review of What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All by Hal Weitzman

By Sean Vanatta For 36 years, Joe Biden represented Delaware in the United States Senate. Critics, uncharitably, accused him of representing MBNA, a credit card issuer based in Wilmington (acquired by Bank of America in 2005). Biden’s reputation stemmed from his defense of card issuers specifically—notably through the 2005 Bankruptcy Reform Act—and corporate America more generally. ...Read More

Breaking Down Bank Runs with Itay Goldstein

From Bailey Building and Loan in It's a Wonderful Life to Silicon Valley Bank in real life – bank runs are a familiar story throughout history. In the latest edition of Wharton Magazine, Wharton professor and WIFPR Director Itay Goldstein gives a Whiteboard lesson all about bank runs. Learn what...Read More

Review of The Ruble: A Political History by Ekaterina Pravilova

By Alex Royt On March 8, 2022, the Central Bank of Russia (CBR) decided to stop exchanging rubles for foreign currencies. Russia’s invasion of Ukraine the previous month led to sanctions—including the freezing of a majority of CBR reserves— that had made the defense of the ruble’s exchange rate impossible, with the value of the ruble ...Read More

Review of Banking on Slavery: Financing Southern Expansion in the Antebellum United States by Sharon Ann Murphy

By Sean Vanatta In 2005, J.P. Morgan Chase revealed that two of its predecessor banks—legacies of earlier acquisitions and reorganizations—had been complicit in financing American slavery. Together, the banks had “accepted approximately 13,000 slaves as collateral for loans,” the bank explained, “and ended up owning approximately 1,250 of them” when borrowers failed to repay their debts. ...Read More

Swing Pricing: A Tool in the Fight against Financial Fragility

By Itay Goldstein and Yao Zeng Last year’s Nobel Prize in Economics went to Douglas Diamond and Philip Dybvig for their pioneering illustration of bank runs. In a nutshell, banks use investors’ liquid deposit money to invest in illiquid projects like factories and houses. If depositors expect other depositors to take their money out, they want ...Read More

Principles for Regulation in Crypto

By Peter Conti-Brown The collapse of Sam Bankman-Fried’s FTX empire – and his subsequent arrest in the Bahamas in response to a request from the US Department of Justice – has dominated regulatory discussions about crypto, finance, and much else. But as tumultuous and distracting as the FTX drama has been – and the sex, drugs, ...Read More

Research Spotlight: The Value of Undiversified Shareholder Engagement

By Felix Nockher The separation of ownership and control allows shareholders to diversify their portfolios and firms to undertake value generating projects regardless of their level of idiosyncratic risk. However, the universal push for diversification often means that shareholders do not bear sufficient risk to incentivize them to monitor the firms in their portfolios. As a ...Read More

Book Review: Two Biographies of Janet Yellen

By Kaleb Nygaard From evenings as the haute cuisine home chef, to the extra early arrival time at the airport, to the three days dedicated to drilling before each FOMC press conference, Janet Yellen is, at heart, an eager and anxious preparer. Her time management and attention to detail manifested in her college days with a ...Read More

Book Review: The Long Shadow of Default: Britain’s Unpaid War Debts to the United States, 1917-2020 by David James Gill

By Max Harris In 2014, during the centenary of the First World War, Her Majesty’s Treasury announced that Britain would repay its outstanding debts from that tragic conflict. The Allies had long since defeated the Kaiser, but Britain was still spending millions of pounds in interest every year on those age-old borrowings. Repaying (more accurately, refinancing) ...Read More

Research Spotlight: Payment for Order Flow and Price Improvement

By Bradford (Lynch) Levy By most accounts, the past decade has heralded a new age in retail investing—by eliminating commissions retail brokers have “democratized finance.” In place of commissions, retail brokers now rely on payment for order flow (PFOF) to drive revenue. While the elimination of commissions sounds great, there is ongoing debate as to whether ...Read More

Book Review: An Exchange Rate History of the United Kingdom, 1945-1992 by Alain Naef

By Max Harris Exchange rate management is once again in the headlines. The dollar is strong, inflation is rampant, and policymakers around the world are trying to get a grip. Emerging market economies have spent billions to curb depreciation. Advanced economies are feeling the heat as well. In September, Japan’s finance ministry intervened in foreign exchange ...Read More

Welcome to the WIFPR Blog

Welcome to the blog of the Wharton Initiative on Financial Policy and Regulation (WIFPR). This post will introduce you to WIFPR, its mission, its staff, and will explain the blog’s purpose and range. WIFPR was founded by Peter Conti-Brown and Itay Goldstein in 2021 to serve as the leading forum for financial policy discussion at The ...Read More