The Bundesbank is to repatriate a large chunk of its substantial gold reserves held in New York and Paris (click here for story). Two questions immediately spring to mind. Why do central banks still hold large amounts of gold even though currencies are no longer tied to gold? Why is the Bundesbank pulling its gold reserves back to Germany? Some analysts see the Bundesbank's move as a sign of an impending currency war. Others see it as the world moving towards a de facto gold standard!
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...