Chicago Fed Letter
A “Principled” Approach to International Guidance for Central Counterparties
Following the 2007–08 financial crisis, the G20 agreed to implement a clearing mandate, requiring all standardized over-the-counter derivatives to be cleared through a central counterparty (CCP). The central role of CCPs in post-crisis financial markets has increased the interest of both national authorities and international standard setters in CCP regulation.
Economic Growth to Accelerate in 2018 and Then Ease in 2019 as Auto Sales Downshift
William A. Strauss and Thomas Haasl
According to participants in the Chicago Fed’s annual Automotive Outlook Symposium (AOS), the nation’s economic growth is forecasted to improve this year and then moderate close to its long-term average in 2019. Inflation is expected to increase in 2018 and to pull back in 2019. The unemployment rate is anticipated to decrease to 3.8% by the end of 2018, but then tick back up next year. Light vehicle sales are predicted to decrease from 17.2 million units in 2017 to 17.0 million units in 2018 and then to 16.7 million units in 2019.
Navigating Pension Reform in Illinois
Richard H. Mattoon and Sarah Wetmore
Illinois is one of several states facing severe state and local public pension crises, but it is uniquely constrained in its ability to address the problem due to recent judicial rulings that all but prohibit pension benefit changes for current and retired public employees. A conference cosponsored by the Federal Reserve Bank of Chicago and the Civic Federation on April 17, 2018, examined the state’s options.
The Risks of Pricing New Insurance Products: The Case of Long-Term Care
Zain Mohey-Deen and Richard J. Rosen
This article examines what happens when incorrect assumptions are made in pricing new insurance products. The focus is on the mispricing of long-term care (LTC) insurance—which led to the insolvency of Penn Treaty.
