Asaf Bernstein

Leeds School of Business
University of Colorado at Boulder
Campus Box 401
Boulder, CO 80309
Tel: 303/492-8854

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
NBER Program Affiliations: DAE
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: University of Colorado at Boulder

NBER Working Papers and Publications

September 2014Counterparty Risk and the Establishment of the New York Stock Exchange Clearinghouse
with Eric Hughson, Marc D. Weidenmier: w20459
Heightened counterparty risk during the recent financial crisis has raised questions about the role clearinghouses play in global financial stability. Empirical identification of the effect of centralized clearing on counterparty risk is challenging because of the co-incidence of macro-economic turbulence and the introduction of clearinghouses. We overcome these concerns by examining a novel historical experiment, the establishment of a clearinghouse on the New York Stock Exchange (NYSE) in 1892. During this period the largest NYSE stocks were also listed on the Consolidated Stock Exchange (CSE), which already had a clearinghouse. Using identical securities on the CSE as a control, we find that the introduction of clearing reduced annualized volatility of NYSE returns by 90-173bps and in...

Published: Asaf Bernstein & Eric Hughson & Marc Weidenmier, 2019. "Counterparty Risk and the Establishment of the New York Stock Exchange Clearinghouse," Journal of Political Economy, vol 127(2), pages 689-729.

October 2008Can a Lender of Last Resort Stabilize Financial Markets? Lessons from the Founding of the Fed
with Eric Hughson, Marc D. Weidenmier: w14422
We use the founding of the Federal Reserve as a historical experiment to provide some insight into whether a lender of last resort can stabilize financial markets. Following the Panic of 1907, Congress passed two measures that established a lender of last resort in the United States: (1) the Aldrich-Vreeland Act of 1908 which authorized certain banks to issue emergency currency during a financial crisis and (2) the Federal Reserve Act of 1913 which established a central bank. We employ a new identification strategy to isolate the effects of the introduction of a lender of last resort from other macroeconomic shocks. We compare the standard deviation of stock returns and short-term interest rates over time across the months of September and October, the two months of the year when financial...

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