WP 25-31 – We use bond-level data to study how U.S. banks manage their securities portfolios — focusing on the period of rapidly changing interest rates in 2022–23 — and examine the role of financial and regulatory frictions in shaping bank behavior.

Economic Insights — Many U.S. banks use complex financial transactions to optimize capital and hedge possible credit losses, but not without risks.

WP 25-24 – Recent U.S. and European regulations promote centrally clearing derivatives to reduce complexity and systemic risk in the financial system. We argue that more central clearing does not guarantee reduced systemic risk.