Tarp

Breathtaking research from an ECB paper, stacking up the measures taken and bodies set up by central banks around the world. An invaluable resource – high praise to authors Stéphanie Marie Stolz and Michael Wedow.

For data junkies, see tables on pages: 25, 30, 37 and 58.

Simone Baribeau

Reuters has an interesting piece on critics of the Obama administration’s Christmas Eve plan to extend unlimited credit lines to Fannie and Freddie. Critics, including Dennis Kucinich,  the Ohio Democrat who is perhaps the most liberal member of the House, called the move a “backdoor Tarp”.

With no limit on the credit line, Fannie and Freddie would be free to buy toxic assets from banks, clearing their books and leaving US taxpayers with the bill, critics argue. Read more

Krishna Guha

Did you spot the big hole in the Obama speech on job creation today? Nothing new on small business access to credit – possibly the single biggest obstacle to job creation in the US. This is a huge issue for the economy, the White House and the Fed.

With the Fed rightly withdrawing from sectoral intervention via financial markets now the financial system has normalised, supporting small business access to finance is properly a job for the government.

On paper this is not difficult. The government could provide guarantees to limit losses on small business loans or create a funding vehicle to coinvest in such loans alongside banks (I prefer this route as the taxpayer and the bank would have the same economic interests). Read more