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Home > Research & Data > Economists > Loretta J. Mester

Loretta J. Mester

Senior Vice President and Director of Research

Phone: (215) 574-3807
Fax: (215) 574-4303
Send an e-mail to Loretta J. Mester E-mail
Curriculum vitae PDF

Concurrent Positions

  • Adjunct Professor of Finance, The Wharton School,
    University of Pennsylvania
  • Fellow, Wharton Financial Institutions Center
  • Founding Member and Director, Financial Intermediation Research Society

Editorships

Associate Editor:

  • Journal of Financial Intermediation
  • Journal of Money, Credit, and Banking
  • Journal of Financial Services Research
  • Journal of Economics and Business
  • Research in Banking and Finance
  • Journal of Financial Stability

Editorial Board:

  • International Journal of Banking, Accounting, and Finance

Publications in Refereed Journals

Other Publications

  • "Efficiency in Banking: Theory and Evidence," with Joseph P. Hughes, invited chapter for Oxford Handbook of Banking, Oxford University Press: Oxford, UK, eds. Allen Berger, Philip Molyneux, and John Wilson, forthcoming.
  • “Optimal Industrial Structure in Banking,” invited chapter for Handbook of Financial Intermediation, North Holland, ed. Arnoud Boot and Anjan Thakor, forthcoming.
  • "Magyar Nemzeti Bank Research Evaluation Report 2008," with László Halpern, National Bank of Hungary, March 2008.
  • "Some Thoughts on the Evolution of the Banking System and the Process of Financial Intermediation," Economic Review, Federal Reserve Bank of Atlanta, First and Second Quarters 2007, pp. 8-9. PDF External Link
  • "Working as a Research Economist at the Federal Reserve Bank of Philadelphia," invited article for the Symposium on Research Careers Outside of Academia, Newsletter of the Committee on the Status of Women in the Economics Profession (CSWEP), Spring/Summer 2006, pp. 8-9. PDF
  • "Core Inflation as a Predictor of Total Inflation," with N. Neil K. Khettry, Research Rap - Special Report, Federal Reserve Bank of Philadelphia, April 26, 2006, pp. 1-20. PDF
  • “Bank of Finland Research Evaluation Report 2004,” with Philip R. Lane and Juuso Välimäki, Bank of Finland, December 2004.
  • “Was Job Quality ‘Job One' in the Tri-State Region’s Economic Recovery?” with William Olney, Federal Reserve Bank of Philadelphia Regional Highlights, Special Issue, December 2004, pp. 1-25. PDF
  • “Credit Scoring and Securitization of Small Business Loans: Discussion Comments,” Business Access to Capital and Credit: A Federal Reserve System Research Conference, March 1999, pp. 650-62.
  • “Abstract of ‘Inside the Black Box: What Explains Differences in the Efficiencies of Financial Institutions,’” Contemporary Finance Digest, 2 (Summer 1998), pp. 70-1.
  • "Comments on Part Five: Competitive Interpenetration: Banking, Commerce and Nonbank Activities,” in Universal Banking: Financial System Design Reconsidered, A. Saunders and I. Walter, eds., Irwin: Chicago, 1996, pp. 541-49.
  • “The Real Reasons That Benefits of Teaser Rates May Be Short-Lived,” with Paul Calem, Letters to the Editor, American Banker, April 25, 1994.
  • "Economies of Scale and Scope," in Financial Institutions Management: A Modern Perspective, by Anthony Saunders, Richard D. Irwin: Chicago, IL, 1994, p. 230; second edition, 1997, p. 265; third edition, 2002, p. 299.

Federal Reserve Bank of Philadelphia Business Review Articles

  • "Financing Community Development: Learning from the Past, Looking to the Future," First Quarter 2008, pp. 34-50. PDF
  • “Changes in the Use of Electronic Means of Payment: 1995-2004,” Second Quarter 2006, pp. 26-30. (Reprinted as Table No. 1172 in the Statistical Abstract of the United States U.S. Census Bureau, 2007, 2008, and 2009.) PDF
  • "Economic Growth and Development: Perspectives for Policymakers, A Summary of the 2006 Philadelphia Fed Policy Forum," Federal Reserve Bank of Philadelphia Business Review, Third Quarter 2007, pp. 30-39. PDF
  • "Fiscal Imbalance: Problems, Solutions, and Implications, A Summary of the 2005 Philadelphia Fed Policy Forum," Federal Reserve Bank of Philadelphia Business Review, Third Quarter 2006, pp. 31-39. PDF
  • “Challenges and Opportunities in a Global Economy: Perspectives on Outsourcing, Exchange Rates, and Free Trade, A Summary of the 2004 Philadelphia Fed Policy Forum,” Third Quarter 2005, pp. 36-48. PDF
  • “Managing the Recovery in Uncertain Times: A Summary of the 2003 Philadelphia Fed Policy Forum,” Third Quarter 2004, pp. 44-56. PDF
  • "Changes in the Use of Electronic Means of Payment: 1995-2001," Third Quarter 2003, p. 18-20. (Reprinted as Table No. 1186. "Percent of U.S. Households That Use Selected Payment Instruments: 1995 and 2001," in the Statistical Abstract of the United States, U.S. Census Bureau, 2003, pp. 750.)
  • "Crises, Contagion, and Coordination: A Summary of the 2002 Philadelphia Fed Policy Forum," Third Quarter 2003, pp. 8-15. PDF
  • "The Philadelphia Fed Policy Forum: Three Questions for Monetary Policymakers," Third Quarter 2002, pp. 6-13. PDF
  • "Is the Personal Bankruptcy System Bankrupt?" First Quarter 2002, pp. 31-44. PDF
  • "A Summary of the Conference on Consumer Transactions and Credit," Third Quarter 2001, pp. 5-9. PDF
  • "Changes in the Use of Electronic Means of Payment," Third Quarter 2001, pp. 10-12. (Reprinted as Table No. 1161. "Percent of U.S. Households That Use Selected Payment Instruments: 1995 and 1998" in the Statistical Abstract of the United States, U.S. Census Bureau, 2002, P. 727.)
  • "The Changing Nature of the Payments System: Should New Players Mean New Rules?" March/April 2000. PDF
  • “Banking Industry Consolidation: What’s a Small Business to Do?” January/February 1999. PDF
  • “What’s the Point of Credit Scoring?” September/October 1997. PDF
    (Reprinted on the Public Affairs Information Service; in Frederic S. Mishkin, 1999 Readings to Accompany The Economics of Money, Banking, and Financial Markets, Fifth Edition, Addison Wesley Longman, Inc. 1999)
  • “Repealing Glass-Steagall: The Past Points the Way to the Future,” July/August 1996.
  • "There's More Than One Way to Sell a Security: The Treasury's Auction Experiment," July/August 1995.
  • "How Efficient Are Third District Banks?" January/February 1994.
  • "Banking and Commerce: A Dangerous Liaison?" May/June 1992.
  • "Curing Our Ailing Deposit-Insurance System," September/October 1990.
  • "Owners versus Managers: Who Controls the Bank?" May/June 1989.
  • "Going, Going, Gone: Setting Prices with Auctions," March/April 1988.
  • "Production of Financial Services: Scale and Scope Economies," January/February 1987.

Current Working Papers

  • "Core Measures of Inflation as Predictors of Total Inflation," with Theodore M. Crone, N. Neil K. Khettry, and Jason A. Novak, Working Paper 08-9, May 2008 PDF
  • "Central Bank Institutional Structure and Effective Central Banking: Cross-Country Empirical Evidence," Working Paper 08-5, April 2008 PDF
  • "Optimal Industrial Structure in Banking," Working Paper 08-2, January 2008 PDF
  • "Efficiency in Banking: Theory, Practice, and Evidence," with Joseph P. Hughes, Working Paper 08-1, January 2008 PDF
  • "Competitive Effects of Basel II on U.S. Bank Credit Card Lending," with William W. Lang and Todd A. Vermilyea, Working Paper 07-9, March 2007 PDF
  • "Applying Efficiency Measurement Techniques to Central Banks," Working Paper 03-13, July 2003. PDF
  • "Optimal Financial Contracts for Large Investors: The Role of Lender Liability," with Mitchell Berlin, Working Paper 00-1, February 2000. Supersedes Working Paper 99-8. PDF
  • “Efficiency and Productivity Change in the U.S. Commercial Banking Industry: A Comparison of the 1980s and 1990s,” with Allen N. Berger, Working Paper 97-5/R, May 1997, revised November 1997. PDF
  • "Recovering Technologies that Account for Generalized Managerial Preferences: An Application to Non-Risk-Neutral Banks," with Joseph P. Hughes, William Lang, and Choon-Geol Moon, Working Paper 95-8/R, August 1994, revised August 1996.

Research Interests and Work in Progress

  • Productive efficiency in financial institutions
  • Theory of financial intermediation
  • Agency problems in credit markets
  • Credit card pricing
  • Central bank governance