No Substitute for the "P" Word in Financial Rescue

@article{Ausubel2009NoSF,
  title={No Substitute for the "P" Word in Financial Rescue},
  author={Lawrence M. Ausubel and Peter Cramton},
  journal={The Economists' Voice},
  year={2009},
  volume={6}
}
Fears of pricing troubled assets have needlessly stalled the rescue effort, according to Lawrence Ausubel and Peter Cramton, two market-design economists whose work on TARP has received the attention of the Treasury and policy makers. 
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cramton.umd.edu
9 Citations
Background Citations
3

9 Citations

Making Sense of the Aggregator Bank
On Tuesday, 10 February 2009, Treasury Secretary Geithner proposed the aggregator bank ("public-private investment fund") as a key instrument to resolve the financial crisis. He left out many…
A Two-Sided Auction for Legacy Loans
On Monday, 23 March 2009, Treasury Secretary Geithner presented the Public-Private Investment Program as a key instrument to resolve the financial crisis (www.financialstability.gov). The Treasury’s…
The put problem with buying toxic assets
This article uses the option pricing arguments of Merton (1974) to demonstrate that even solvent banks will be reluctant to sell volatile, toxic assets at market prices. Banks’ shareholders have…
Optimal Interventions in Markets with Adverse Selection
We study interventions to restore efficient lending and investment when financial markets fail because of adverse selection. We solve a design problem where the decision to participate in a program…
E¢ cient Bank Recapitalization
We analyze government interventions to alleviate debt overhang among banks. Interventions generate two types of rents. Informational rents arise from opportunistic participation based on private…
Efficient Recapitalization
We analyze government interventions to recapitalize a banking sector that restricts lending to firms because of debt overhang. We find that the efficient recapitalization program injects capital…
Private Intellectuals and Public Perplexity: The Economics Profession and the Economic Crisis
We explore recent arguments that economists may not serve to enlighten their publics so much as foster surplus confusion and doubt concerning controversies in their areas of expertise, particularly…
Informational Rents, Macroeconomic Rents, and Efficient Bailouts
We analyze government interventions to alleviate debt overhang among banks. Interventions generate two types of rents. Informational rents arise from opportunistic participation based on private…
Wykorzystanie eksperymentów do badania efektywności systemów aukcyjnych

References

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Optimal Interventions in Markets with Adverse Selection
We study interventions to restore efficient lending and investment when financial markets fail because of adverse selection. We solve a design problem where the decision to participate in a program…
Auction Design Critical for Rescue Plan
The details of the auction design could make or break the Treasury's plan to invest $700 billion in mortgage-related securities to resolve the financial crisis, using market mechanisms such as…
Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auction
We experimentally test alternative auction designs suitable for pricing and removing troubled assets from banks’ balance sheets as part of the financial rescue. Many individual securities or pools of…
Assignment Messages and Exchanges
“Assignment messages” are messages that parameterize substitutable preferences using a particular linear program. An “assignment exchange” is a simplified Walrasian exchange in which participants are…
Available at: http://www.powerauction. com/docs/troubled-asset-reverse-auction.pdf
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