Dongkeun Choi

Not mincing words, @RiskDotNet's @wilkkes writes "US blows the floors off Basel III" risk.net/regulation/796… #bank #capital #regulation

(Basel III) "US Regulators Unveil Plans to Ease Big Bank Capital Rules; ... move could potentially unleash billions of dollars for lending, share buybacks and dividends." bloomberg.com/news/articles/…

R.I.P. Christopher Sims (21 Oct. 1942 - 14 March 2026) - a giant in macroeconomics and one of the finest human beings I have ever met -

Speech by Vice Chair for Supervision Bowman on Basel III and bank capital rules @catoinstitute: federalreserve.gov/newsevents/spe… Watch live: cato.org/events/basel-i… Learn more about Vice Chair for Supervision Bowman: federalreserve.gov/aboutthefed/bi…

Ed Leamer famously argued “Housing is the Business Cycle”. This paper adds color to that claim by showing monetary policy ⇒ mortgage rates ⇒ house prices ⇒ home equity borrowing ⇒ aggregate demand. Housing also affects fertility, as @JesusFerna7026 noted on the pod this week. Housing truly sits at the nexus of many macro dynamics.

🧑‍🔧Paper update (with David Bügel and Albert Hidalgo): Unconventional but Different After All? A Unified Series of Narrative Monetary Policy Shocks We construct the longest available narrative monetary policy shock series for the U.S. Paper + Codes 👇 ralphluetticke.com/files/BHL_2026…

Banking on nonbanks #NBFI #macroprudential cepr.org/voxeu/columns/… @voxeu @cepr_org

Interest rate hikes raise fragility unevenly via the interaction of bond losses and uninsured deposit funding. This paper models bank heterogeneity and run risk across banks, from @JulianeBegenau, @VadimElenev, and @TLandvoigt nber.org/papers/w34892

I am really not a big fan of the notion of showing how one’s model does on “untargeted moments.” Better to simply talk about how many things one’s model can fit. Distinction between “targeted” and “untargeted” moments is often dubious. 1/3

I want to take a moment to defend calibration. A common critique of macro by non-macro people centers on the supposed lack of scientific rigor associated with calibration of models. 1/10

New paper on bank runs with Correia and Luck: "Bank Runs With and Without Bank Failure" Questions: - What are the determinants of runs? - When do bank runs result in bank failure? - Can runs trigger the failure of healthy banks and amplify small shocks into large crises? - Are runs themselves the initial cause of financial distress or are they a symptom of deeper fundamental solvency problems in the financial system? What we do: - Apply LLMs to historical newspapers to uncover over 4,000 runs on individual banks in the pre-FDIC US banking system from 1863 to 1934. Capture the most famous runs (Bank of the US - Merge data on runs and other bank-level events discussed in newspapers (suspensions, failures) to bank-level fundamentals (harder than it sounds!) What we find: (1) Runs are considerably more likely in weak banks, but can also occur in strong banks, especially in response to negative news about the real economy or the broader banking system. (2) However, runs typically only result in failure for banks with weak fundamentals [see figure below]. Strong banks survive runs through various mechanisms, including interbank cooperation, equity injections, public signals of strength, and suspension of convertibility (3) At the local level, poor fundamentals necessary for runs to translate into large declines in lending. Moreover, bank failures (with and without runs) translate into substantially larger declines in deposits and lending than runs without failures. Overall takeaways: - Poor fundamentals are key for whether runs pass through into failure and have severe consequences for the broader economy. - The findings temper the view that small shocks can result in large jumps to bad equilibria via runs on demandable debt. Full paper here. Comments welcome. Given the methodology and evolving AI tools, we expect to make refinements to the runs database over time. Any input is welcome. static1.squarespace.com/static/58f6b1c…

In response to the many requests, we have compiled most of the data from our paper into clean, easily accessible files so others can explore and build on our work. 👉dropbox.com/scl/fo/u1en2c9… If you use the data for research or reports, please cite our paper! @XinchengQiu

"This paper uses data on banks' private risk assessments to show that banks produce more information in bad times" New paper by @GregWeitzner & Howes: restud.com/bank-informati… #REStud #EconX #EconTwitter

New post : Can a Transformer “Learn” Economic Relationships? Revisiting the Lucas Critique in the age of Transformers. with @arpitrage We simulated data from an NK model, fit a transformer, and tested out of sample fit How did it do? Pretty well! Link and thread in reply:

🚨New dataset🚨 Time-consistent balance sheets and income statements for commercial banks in the United States from *1959* to 2025. newyorkfed.org/research/banki… 1/

How can we leverage existing results that use cross-sectional identification to estimate aggregate effects? Felipe Schwartzman (@MacroInPieces), Naoya Nagasaka, and I address this problem in our new paper “Estimating the Missing Intercept”. cm1518.github.io/files/MNS.pdf

‼️💥 The USMPD is now out 💥‼️ High-frequency monetary policy surprises for all official FOMC comms 👇 sffed.us/usmpd 🔸 Since 1994 🔸 Regularly updated 🔸 FREE! Paper 👉 frbsf.org/wp-content/upl… w\ @migacosta A. Ajello @michaelbauer_hh & F. Loria #EconTwitter

🚨Now publicly available: New monetary policy shock series Download link: matthias-meier-econ.github.io/files/HackIstr… A brief 🧵: 1/4

Excellent post about the mystique of banks creating money by Guido! I also discuss this issue at some length in section 7 of my Money and Banking chapter: eml.berkeley.edu/~jsteinsson/te…

SF Fed study examines 150 years of U.S. tariffs and find that they lead to lower inflation and weaker aggregate demand (which raises unemployment) frbsf.org/wp-content/upl…