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AI generated image of a glass square vessel with glass squares and pyramid inside with the words Bank Holding Company on the large vessel and insurer, fintech and broker-dealer on the small glass items inside it.AI generated image of a glass square vessel with glass squares and pyramid inside with the words Bank Holding Company on the large vessel and insurer, fintech and broker-dealer on the small glass items inside it.
How Basel III Changes Where Capital Sits: Nonbank Subsidiaries as Equity Reservoir
When Basel III's binding capital minimums took effect for U.S. banks in January 2015, a bank holding company (BHC) whose depository subsidiary fell short had two options: raise fresh equity in external markets (a costly option), or, if it owned equity-rich nonbank affiliates, it could move capital from its subsidiary to itself—satisfying the regulator, avoiding issuance costs, and leaving consolidated equity where it was. The authors show that this second option is precisely what organizationally complex BHCs did.
By Nicola Cetorelli and Shohini Kundu
AI generated image of a glass square vessel with glass squares and pyramid inside with the words Bank Holding Company on the large vessel and insurer, fintech and broker-dealer on the small glass items inside it.
Capitalizing on Nonbanks: Regulatory Arbitrage Within Bank Holding Companies
When economists and policymakers talk about nonbank finance, they usually have activity that takes place outside the banking system in mind. However, a substantial share of U.S. nonbank financial activity takes place inside bank holding companies (BHCs), conducted by nonbank subsidiaries that operate alongside regulated commercial banks under common ownership and integrated management. The authors document the scale of nonbank activity within BHCs and describe balance-sheet features that make these subsidiaries a vehicle for regulatory arbitrage.
By Nicola Cetorelli and Shohini Kundu
Workers on a production line in white protective gear assembling semiconductors on memory boards that are moving on a conveyor belt.
More Tariff Pass-Through Is in the Pipeline
The past year brought dramatic changes to U.S. trade policy, with many businesses seeing their costs increase significantly. Previously, the authors found that most businesses had passed on at least some of these higher costs to their customers through higher prices. Have businesses finished adjusting prices, or do further tariff-induced price increases lie ahead? Their latest regional business surveys reveal that nearly half of firms that have paid tariffs still plan additional price increases to offset these costs.
By Jaison R. Abel, Mary Amiti, Richard Deitz, Sebastian Heise, and Nick Montalbano
Created image of an early 20th Century bank run with pink, blue and yellow flow concept. Querying, analysing, visualizing neural network for artificial intelligence. Data mining.
Using AI to Let History Speak About Bank Runs
Banking crises are commonly associated with bank runs and banking panics, yet empirical understanding of bank runs is constrained by a lack of bank-level data. The authors use large language models to extract information on bank runs from millions of digitized historical newspaper pages, creating the most comprehensive database of bank runs in U.S. history. They describe how they built this dataset and discuss what its basic features reveal.
By Sergio Correia, Stephan Luck, and Emil Verner
Black and white photo of a bank run on the American Union Bank which collapsed and went out of business on June 30, 1931.
What Do Over 3,000 Bank Runs Teach Us About Banking Crises?
Runs on financial institutions are salient markers of financial crises, but their role is debated. One view is that runs trigger small shocks into full-blown banking crises. Another view is that runs exacerbate crises rather than being their primary cause. The authors use a new database of more than 3,000 bank runs to show that poor fundamentals are central to explaining both when runs occur and when they have severe economic effects.
By Sergio Correia, Stephan Luck, and Emil Verner
Stock market and exchange, indices moving up and down, Athens, Lisbon, London, New York. Device screen, business, market data and trading information. Concept, 3D Illustration
The Disappearing Overnight Drift
In 2021, the authors documented the "overnight drift"—a large, persistent return to holding U.S. equity futures in the narrow window between 2:00 and 3:00 a.m. Eastern time, when European equity markets open. Five additional years of data later, that pattern appears to have faded. The authors revisit the overnight drift and use their inventory-risk framework to ask which of three observable channels accounts for the change.
By Nina Boyarchenko, Lars C. Larsen, and Paul Whelan
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The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.

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Labor Market Tightness Index
The HPW Labor Market Tightness Index is an indicator of labor market tightness for summarizing current wage pressures and predicting wage inflation.
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Losses from Natural Disasters
Losses from Natural Disasters provides county-level estimates of the economic and human impact of extreme weather events in the United States.
Reserve Demand Elasticity (RDE)
RDE estimates provide a quantitative measure of the ampleness of reserves in the U.S. banking system in real time. New data are published monthly.
Economic Heterogeneity Indicators (EHIs)
The EHIs are broad-based economic indicators that measure macroeconomic outcomes experienced by different demographic, economic, and geographic groups on both a regional and national level.
Corporate Bond Market Distress Index (CMDI)
The CMDI is a summary metric of corporate bond market functioning based on information from multiple sources including measures of primary market issuance and pricing, secondary market pricing and liquidity conditions, and the relative pricing between traded and nontraded bonds. It updates monthly.
Regional Surveys
Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

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Regional Employment Trends
These interactive charts track employment in state and metro regions in the Federal Reserve’s Second District, utilizing the New York Fed’s early benchmarks of payroll employment data. It updates monthly.
Mapping Home Price Changes
Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.
Early Benchmarked Employment Data
Monthly releases of early benchmarked employment figures for New York State, New Jersey, Puerto Rico, and the U.S. Virgin Islands, as well as the metropolitan areas in New York and Northern New Jersey
The Labor Market for Recent College Graduates
Labor market conditions continued to be challenging for recent college graduates at the start of 2026. The unemployment rate remained elevated at about 5.7 percent in the first quarter of 2026, though the underemployment rate edged down to 41.5 percent.
Recent Publications
Bank Runs With and Without Bank Failure
The authors study the causes and consequences of bank runs. By applying large language models to historical newspapers, they create a comprehensive database of bank runs in U.S. history with information on 3,984 runs on individual banks from 1863 to 1934. Their novel data establishes that runs are considerably more likely in weak banks but also occur in strong banks; however, runs typically only result in failure for banks with poor fundamentals.
Sergio Correia, Stephan Luck, and Emil Verner, Staff Report 1198, July 2026
The International RBC Model Finally Works!
The standard International Real Business Cycle (RBC) model, driven by aggregate productivity shocks, fails to reconcile the empirical behavior of real exchange rates and macroeconomic variables. The authors show that incorporating uninsurable countercyclical income risk into a standard international RBC model can qualitatively and quantitatively account for the quantity puzzles in open-economy macro, which can be broadly categorized into three groups: quantity puzzles, exchange rate puzzles, and macroeconomic comovement.
Sushant Acharya, Edouard Challe, and Louphou Coulibaly, Staff Report 1197, July 2026
Regulatory Arbitrage Within the Firm
Regulation shapes the boundaries of firms. When prudential standards bind asymmetrically across subsidiaries of an integrated organization, internal capital markets become a mechanism for regulatory arbitrage. The authors study this in U.S. banking, where holding companies encompass both heavily regulated depository institutions and lightly regulated nonbank affiliates. They find that organizational structure is a fundamental determinant of regulatory outcomes.
Nicola Cetorelli and Shohini Kundu, Staff Report 1196, revised July 2026
Micro and Macro Cost-Price Dynamics in Normal Times and During Inflation Surges
Firms adjust output prices infrequently despite continuously evolving economic conditions, leading their prices to drift from those that maximize flow profits. The authors study cost-price dynamics in a cross-section of firms in order to jointly explain the time series of aggregate inflation and the frequency of price changes, both during normal times and inflation surges. Their analysis provides novel evidence and insights about the passthrough of costs into prices in both the cross-section of firms and aggregate time-series.
Luca Gagliardone, Mark Gertler, Simone Lenzu, and Joris Tielens, Staff Report 1195, May 2026
Bayesian Persuasion and Cryptography
Bayesian Persuasion assumes that a sender can commit ex ante to an information structure and then release the realized signal ex post. This paper asks when that commitment technology can itself be implemented. The author defines “Receiver-Private Certified Bayesian Persuasion” and shows that this benchmark is equivalent in cryptographic power to secure two-party computation, demonstrating that hiding the signal from the sender is necessary.
Pablo D. Azar, Staff Report 1194, May 2026
Financial Shocks, Productivity, and Prices
Financial crises are frequently followed by persistent slowdowns in aggregate productivity growth. The authors study the interconnection between the productivity and pricing effects of financial shocks. They show that a tightening of credit conditions has a persistent, yet delayed, negative effect on firms’ long-run physical productivity growth while also inducing firms to change their pricing policies. Also, they demonstrate that the pricing adjustments themselves have productivity implications.
Simone Lenzu, David A. Rivers, Joris Tielens, and Shi Hu, Staff Report 1193, April 2026
Artificial Intelligence and Monetary Policy: A Framework and Perspective on Cyclical Transmission, Structural Transition, and Financial Stability
The author develops a framework analyzing how artificial intelligence (AI) reshapes monetary policy through three interrelated channels: cyclical transmission, structural transition, and financial stability. Given that central bank mandates center on price stability and financial stability, these developments place AI squarely within the domain of central banking. The author argues that AI does not call for a redefinition of central banks’ objectives, but it does require a recalibration of existing frameworks.
Simone Lenzu, Staff Report 1192, April 2026
Estimating Demand Shocks from Foot Traffic: A Big-Data Approach
Demand shocks in the service, retail trade, and health sectors are challenging to measure because output only occurs when a customer arrives at an establishment. The authors leverage high-frequency foot-traffic data to estimate demand shocks across New York City’s retail, service, and health sectors. Their analysis shows that demand dynamics in these customer-facing industries are fundamentally heterogeneous: establishments differ systematically in the persistence, volatility, and growth patterns of their demand processes.
Marina Azzimonti, David Wiczer, and Yang Xuan, Staff Report 1191, April 2026


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