NBFIs: Non-Bank Financial Intermediaries

A central issue confronting soon-to-retire workers (those aged 47–64) is whether they will have command over enough resources (both private and public) to maintain a decent standard of living in retirement. Typically, the adequacy of projected retirement income is judged in relation to some absolute standard (for example, the poverty threshold) and preretirement income (“replacement rate”). Using data from the Federal Reserve Board's Survey of Consumer Finances for 1983, 1989, and 2001, I find that expected retirement income grew robustly from 1989 to 2001 (by 38 percent in real terms) and the share with expected retirement income less than twice the poverty line fell by 5 percentage points. The percentage-point decline was even greater for minority households (11.6) and single females (5.7). The change in the share with replacement rates over 50 percent was 4.5 percentage points, though in this case much lower for minorities (0.9 percentage points) and single females (1.8 percentage points). However, percentage point changes for minorities and single females were much smaller, at 75 percent and a 100 percent replacement rates, respectively. Moreover, retirement wealth is very unevenly distributed. Whites and married couples had substantially larger wealth accumulations than their respective counterparts.

Some further information about the nonbank financial intermediarieslisted above:
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Using PSID data for the years 1984 to 1999, we estimate the level and severity of asset poverty. Our results indicate that the share of asset-poor households remained almost the same and the severity of poverty increased during this period, despite the growth in the economy and the financial markets. The race, age, education, and marital status of the household head, and homeownership, are important determinants of asset poverty. There seems to be a downward trend in the contribution to asset poverty of being a college graduate, a married elderly or a black head of household, a single mother, or a married person with children. The contributions of not having a college degree, being a 35-to-49 year-old household head, being a childless nonelderly couple, or being an unmarried elderly person seem to have increased. The contribution to net worth poverty of being a homeowner also went up. Descriptive statistics suggest that changes in the value of assets are more effective in transitions into and out of asset poverty than are changes in debt. Some lifetime events, such as changes in marital, homeownership, or business ownership status, are also correlated with the transitions.


Non Banking Financial Institutions – Part 1 – IASBakra

Types Of Financial Institutions And Their Roles
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What was different about the collapse of the Asian emerging markets in 1997? The free fallof the Mexican peso and the collapse of the Mexican Bolsa produced a "Tequila effect" that spreadthrough most of South America. But it did not create a sell-off in the global financial markets similarto that which occurred on 27 October 1997. Normally, sharp declines in prices in emerging equitymarkets produce a "flight to quality," in which international investors shift their funds back intodeveloped-country markets and local investors seek to protect their wealth by diversifying intodeveloped-country assets. Yet the collapse in the Asian emerging markets, that started in Thailand,spread to the other second-tier Newly Industrialising Economies (NIEs), and eventually extended tothe first-tier NIEs produced the largest absolute declines ever experienced in the major developed-country equity markets. If equity markets can suffer from what Alan Greenspan has called "irrationalexuberance," the Asian crisis suggests that they may also suffer from "irrational pessimism." Yetthere is much to indicate that in this case the financial markets in Japan, Europe, and the United States werequite rational in assessing the global implications of the financial crisis in Asia.


Economic analysis and research summaries for a general audience.

An assessment of the problem, and also the prescriptions for a cure, rely on the particular theoretical perspective of the observer. The Smithian view asserts that markets always lead to the promotion of public welfare, while Keynesian theory states that market processes may lead to malfunction of the capital development of the economy-that is, something other than the promotion of public welfare. For example, the crisis in finance during 1991 is largely a delayed response to the experiment in practical monetarism that occurred from 1979 to 1982. In typically simplistic fashion, monetarism suggests that inflation is always the result of too much money chasing too few goods: Hence, controlling inflation rests on controlling money supply.

Global Conference 2017 | Program Detail » Milken …

During the 1980s, there was a sharp increase in speculative financing resulting from the trend toward leveraged buyouts and the rising demand for short-term marketable corporate liabilities. A main characteristic of a capitalist economy that is stagnant or immersed in a depression is that the capital development of the economy is not progressing. The 1980s were filled with examples of financing inept investments, while the current climate is one of grossly inadequate investment levels to create a progressive full-employment economy.