Finance Panel

The Clark Center for Global Markets explores finance professors’ views on vital policy issues via our Finance Panel.  We regularly poll over 40 individuals on a range of timely and relevant topics.  Panelists not only have the opportunity to respond to a poll’s statements, but an opportunity to comment and provide additional resources, if they wish. The Clark Center then shares the results with the public in a straightforward and concise format.

Please note that from September 2022, the language in our polls will use just two modifiers to refer to the size of an effect:

  • ‘Substantial’: when an effect is large enough that it would make a difference that matters for the behavior involved.
  • ‘Measurable’: when the direction of the effect is clear, but perhaps experts would differ as to whether it is substantial.
Finance

New Money Market Fund Rules

Question A:

New Money Market Fund (MMF) Rules: The SEC adopted amendments to the MMF rules, including a new mandatory liquidity fee for institutional prime and tax-exempt funds. The liquidity fee would trigger when daily net redemptions exceed five percent and when the costs associated with such redemptions are more than de minimus. https://www.sec.gov/news/press-release/2023-129

The new liquidity fee will substantially reduce the likelihood of runs on MMFs.

Responses

Source: Clark Center Economic Experts Panel
Methodology
Question B:

The new liquidity fee will cause a substantial shift of assets under management from institutional prime and tax-exempt funds to government MMFs (which are exempt from the fees).

Responses

Source: Clark Center Economic Experts Panel
Methodology
 
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Financial Regulation
Finance

Commercial Real Estate

Question A:

The impact of the Covid-19 pandemic on working and shopping habits has not been fully priced into current private valuations of downtown commercial properties in major cities.

Responses

Source: Clark Center Economic Experts Panel
Methodology
Question B:

A continued fall in commercial real estate valuations would trigger another round of banking panic.

Responses

Source: Clark Center Economic Experts Panel
Methodology
 
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Banking
Finance

ESG Factors

This Finance survey examines (a) Regulation that allows state pension funds to consider environmental, social, and governance factors in investment decisions only if these factors are material for risk and expected return would make retirees measurably worse off; (b) Regulation that prevents state pension funds from considering environmental, social, and governance factors in investment decisions even if these factors are material for risk and expected return would make retirees measurably worse off 
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Financial Regulation
Finance

Banks’ Business Model

This Finance survey examines (a) Since maturity transformation is an inherent feature of commercial banks' business model, some duration mismatch between assets and liabilities is unavoidable; (b) For the purposes of capital regulation, banks should be required to mark their holdings of Treasury and Agency securities to market at all times (even though their loans are not marked to market)

 

  
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Banking
Finance

Discount Rates

This Finance survey examines (a) Despite the empirical failures of the Capital Asset Pricing Model (CAPM) in explaining expected stock returns, a shareholder-value maximizing publicly-traded firm should still use the CAPM to calculate the cost of equity in capital budgeting; (b) The equity risk premium that U.S. publicly traded firms should use in cost of equity calculations in April 2023 is above 6% 
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Business, Management, & Corporate Performance
Finance

Banking Crisis

This Finance survey examines (a) Financial regulators in the US and Europe lack the tools and authority to deter runs on banks by uninsured depositors; (b) Not guaranteeing uninsured deposits at Silicon Valley Bank in full would have created substantial damage to the US economy; (c) Fully guaranteeing uninsured deposits at Silicon Valley Bank substantially increases banks’ incentives to engage in excessive risk-taking 
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Banking
Finance

Taxing Stock Buybacks

This Finance survey examines (a) Large-scale stock buybacks by public corporations provide short-term rewards for shareholders and senior executives at the expense of potentially higher-return corporate investments; (b) The proposed higher tax on corporate stock buybacks (an increase from 1% to 4%) would generate substantial public revenues; (c) The proposed higher tax on corporate stock buybacks would generate a substantial increase in corporate investment 
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Business, Management, & Corporate Performance
Finance

Debt Ceiling

With the US federal government having reached the current debt ceiling set by Congress and amid political tensions about raising the limit, we invited our panels of experts in economics and finance to express their views on the potential effects of default, as well as the ceiling’s impact on the long-run size of the debt. Over the weekend before the recent meeting between President Biden and Speaker of the House Kevin McCarthy, we asked the US economics panel whether they agreed or disagreed with the following statements, and, if so, how strongly and with what degree of confidence:

 
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Bonds
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