For three decades, the globalization of finance appeared to be an unstoppable trend: as the world economy became more tightly integrated, new technology and access to new markets propelled cross-border capital flows to unprecedented heights. But the financial crisis brought that era of rapid growth to a halt. Drawing on its proprietary database of financial assets in 183 countries, Financial Globalization: Retreat or Reset? continues the McKinsey Global Institute’s ongoing series of reports on global capital markets. More than four and a half years after the financial crisis began, they find that recovery has barely started, despite a rebound in some major equity indexes. Growth in financial assets has stalled, while cross-border capital flows remain more than 60 percent below their 2007 peak. Some of the shifts under way represent a healthy correction of the excesses of the bubble years—but continued retrenchment could damage long-term economic growth.

8th Biennial Community Development Research Conference
Board of Governors of the Federal Reserve System and the Federal Reserve Bank of Atlanta
(3-1-13)

The Community Affairs Officers of the Federal Reserve System are proud to sponsor the eighth biennial Community Development Research Conference. The goal of this event is to highlight new action-oriented and academically rigorous research on resiliency and rebuilding initiatives that can directly inform community development policy and practice. This convening will feature sessions that share interdisciplinary, rigorous, and timely research findings and facilitate a dialogue linking a diverse set of topics relevant to low-income households and neighborhoods. Community developers and practitioners, policymakers, lenders, the philanthropic community, researchers, the financial services sector, state and local economic development agency representatives, and students are all encouraged to attend.

Small Banks Want More Risk Protection for Loan Participations  
American Banker
(3-1-13)

Executives at smaller banks are understandably wary of jumping back into loan participations following some very bad outcomes during the financial crisis. A number of new business ventures are determined to convince community bankers that their services are a safe way to spur loan growth. Groups such as StoneCastle Partners, Promontory Interfinancial Network, and BancAlliance have started offering loan participation services in the past year, all targeting smaller banks. Each group approaches the market differently while offering their own spin on risk management. Those organizations must convince potential clients that their products offering some level of protection from risk, says Jeff Smith, chairman of Ohio Valley Banc in Gallipolis, Ohio. "In the pre-crisis period, things were humming along and moving so fast," Smith says. "Community banks thought they were doing the best due diligence possible, but I don't think we did. Now we're going to be far more careful and diligent about any participation."