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Congressional Budget Office Cost Estimate: S. 611, Grassroots Rural and Small Community Water Systems Assistance Act
From the Summary: "S. 611 would authorize the appropriation of $15 million annually over the 2016-2020 period for the Environmental Protection Agency's program that provides technical assistance to small public water systems. The authorization for this program expired in 2003, but the program received an appropriation of $13 million for fiscal year 2015. CBO [Congressional Budget Office] estimates that implementing S. 611 would cost $67 million over the next five years, assuming appropriation of the authorized amounts. Pay-as-you-go procedures do not apply to S. 611 because it would not affect direct spending or revenues. S. 611 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA)."
United States. Congressional Budget Office
2015-05-08
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Congressional Budget Office Cost Estimate: H.R. 500, Survivors of Human Trafficking Empowerment Act
"H.R. 500 would establish an advisory council to make recommendations to federal agencies on monitoring and combating human trafficking. The council would comprise five survivors of human trafficking and would meet at least once each year. The council members would not be considered federal employees but would receive per diem and reimbursement of travel costs for their service. The operating expenses of the council, which the CBO [Congressional Budget Office] estimates would total less than $500,000 annually, would be covered by an existing authorization. The Trafficking Victims Protection Act of 2000 authorizes the appropriation of $2 million each year in 2016 and 2017 for Department of State activities to monitor and combat trafficking; the bill's new requirements would be similar to activities carried out under current law. CBO estimates that implementing the bill after 2017 would cost less than $500,000 over the 2018-2020 period, assuming the availability of appropriated amounts. Enacting H.R. 500 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply."
United States. Congressional Budget Office
2015-04-27
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Congressional Budget Office Cost Estimate: S. 1869, Coastal Barrier Resources Reauthorization Act of 2005
From the Summary: "S. 1869 would authorize appropriations for the U.S. Fish and Wildlife Service (USFWS) to carry out the coastal barrier resources program. Assuming appropriation of the amounts authorized by the bill, CBO [Congressional Budget Office] estimates that the USFWS would spend $16 million over the 2006-2010 period. Enacting S. 1869 would not affect direct spending or revenues. The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments."
United States. Congressional Budget Office
2005-11-14
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CBO Paper: CBO's Approach to Estimating Expected Hurricane Damage
From the Abstract: "This working paper describes how the Congressional Budget Office [CBO] estimates the effects of climate change and coastal development on hurricane damage. The estimates themselves are presented in a separate report--'Potential Increases in Hurricane Damage in the United States: Implications for the Federal Budget'--for three selected future years: 2025, 2050, and 2075. Climate change is projected to increase damage in two ways. First, climate change is projected to result in more frequent high-intensity hurricanes. Second, for any given storm, rising sea levels are projected to lead to increased damage from storm surges. CBO generates state-specific estimates of hurricane damage on the basis of existing property exposure (which corresponds to existing vulnerability-weighted populations and per capita income in each state) by using damage functions provided by Risk Management Solutions and estimates of the distributions of hurricane frequencies and state-specific sea levels in future years. Coastal development is also projected to increase damage simply by putting more people and property in harm's way. In this analysis, coastal development is measured as changes in population and per capita income in areas that are vulnerable to hurricane damage. Specifically, CBO inflates those state-specific damage estimates on the basis of each state's distributions of vulnerability-weighted population and per capita income in future years, as well as on elasticities that translate changes in population and per capita income into changes in the magnitude of damage."
United States. Congressional Budget Office
Dinan, Terry
2016-06
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Congressional Budget Office Cost Estimate: S. 601, Weather Mitigation Research and Development Policy Authorization Act of 2009
From the Summary: "S. 601 would authorize the appropriation of $25 million for each of fiscal years 2010 through 2014 to establish a Weather Mitigation Office within the National Science Foundation (NSF). The new office would coordinate studies and provide grants to universities, state agencies, and nonprofit organizations to explore methods to reduce the impact of severe weather."
United States. Congressional Budget Office
2009-06-02
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Congressional Budget Office Cost Estimate: H.R. 3479, Natural Hazards Risk Reduction Act of 2011
From the Summary: "H.R. 3479 would reauthorize federal programs aimed at developing methods to reduce damage caused by earthquakes and windstorms. The bill also would reauthorize an interagency advisory committee to coordinate those programs. Assuming appropriation of the authorized and necessary amounts, CBO [Congressional Budget Office] estimates that implementing the legislation would cost $285 million over the 2012-2017 period and $10 million after 2017. Enacting H.R. 3479 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. H.R. 3479 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments."
United States. Congressional Budget Office
2012-01-10
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Congressional Budget Office Cost Estimate: S. 636, A Bill to Provide the Quileute Indian Tribe Tsunami and Flood Protection, and for Other Purposes
"S. 636 would authorize the transfer and redesignation of lands within and around Olympic National Park in the state of Washington. The bill would redesignate certain lands within that park as wilderness and incorporate the lands into the Olympic Wilderness. S. 636 also would incorporate specified federal lands within the park and specified nonfederal Quileute tribal land into the Quileute Indian Reservation, to be held in trust by the federal government. Under the bill, easements and conditions would apply to certain specified lands, and the Quileute tribe would relinquish any claims against the federal government relating to past or present activities in Olympic National Park."
United States. Congressional Budget Office
2012-01-12
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Budget and Economic Outlook: 2022 to 2032
From the Document: "In this report, the Congressional Budget Office [CBO] describes its projections of the federal budget and the U.S. economy under current law for this year and the decade that follows. Cumulative deficits projected for the 2022-2031 period are larger than those in the projections that CBO published last July. Revenues have increased in CBO's projections, buoyed in part by the stronger-than-anticipated economy, which CBO expects to persist. But higher projected inflation and interest rates have pushed up outlays for interest payments on federal debt and for benefit programs such as Social Security. Recently enacted legislation has increased CBO's projections of discretionary spending."
United States. Congressional Budget Office
2022-05
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Congressional Budget Office Cost Estimate: S. 1321, Defending the Integrity of Voting Systems Act
"S. 1321 would broaden the coverage of current laws that prohibit the use of computers to interfere with voting systems. People who violate the bill's provisions could be subject to criminal fines, so the federal government might collect additional fines under the legislation. Criminal fines are recorded as revenues, deposited in the Crime Victims Fund, and later spent without further appropriation action. CBO [Congressional Budget Office] expects that any additional revenues and associated direct spending would not be significant because relatively few additional cases would probably be affected. CBO has not reviewed S. 1321 for intergovernmental or private-sector mandates. Section 4 of the Unfunded Mandates Reform Act excludes from the application of that act any legislative provisions that would enforce constitutional rights of individuals. CBO has determined that this legislation falls within that exclusion because it would enforce constitutional voting rights by protecting the systems through which voting occurs."
United States. Congressional Budget Office
2019-06-03
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Congressional Budget Office Cost Estimate: H.R. 5576, Cyber Deterrence and Response Act of 2018
"H.R. 5576 would codify and broaden existing sanctions on foreign persons and agencies of foreign states that are responsible for or provided support for harmful cyber-attacks on the United States. Several executive orders have imposed sanctions related to similar activities; those sanctions include freezing assets held in the United States and prohibiting entry into the United States. The bill would broaden applicable sanctions to include withdrawing or suspending foreign assistance, voting against loans from international financial institutions, prohibiting federal procurement, denying exports licenses, and blocking financial transfers and payments."
United States. Congressional Budget Office
2018-07-23
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Congressional Budget Office Cost Estimate: H.R. 5433, Hack Your State Department Act
"H.R. 5433 would require the Department of State to develop and implement two programs to improve the department's cybersecurity. Under the first, the department would establish a process to allow hackers to probe the department's information technology systems to discover and report security vulnerabilities, which would then be fixed by the department. Secondly, the bill would require a one-year pilot program to reward hackers who discover vulnerabilities in systems that can be accessed through the Internet. Finally, the department would be required to report to the Congress on how it would implement the bill and related matters. On the basis of information about similar programs at the Department of Defense, CBO [Congressional Budget Office] estimates that implementing the bill would bolster the department's existing cybersecurity programs and that additional costs under the bill would be less than $500,000 over the 2018-2023 period, subject to the availability of appropriated funds. Enacting H.R. 5433 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply."
United States. Congressional Budget Office
2018-05-24
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Congressional Budget Office Cost Estimate: H.R. 5806, Outreach to People with Disabilities During Emergencies Act
"H.R. 5806 would direct the Federal Emergency Management Agency (FEMA) to provide outreach to people with disabilities during a natural disaster, act of terrorism, or other man-made disaster. CBO [Congressional Budget Office] estimates that implementing H.R. 5806 would have no significant impact on the federal budget. The legislation would direct the disability coordinator of FEMA to provide guidance and to coordinate with individuals, officials, and organizations to provide outreach to people with disabilities during a natural disaster, act of terrorism, or other man-made disaster. CBO does not expect that implementing this legislation would result in a significant change to the activities or expenditures currently undertaken by the agency over the next five years."
United States. Congressional Budget Office
2012-08-23
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Serial No. 106-111: H.R. 1838, The Taiwan Security Enhancement Act: Markup before the Committee on International Relations, House of Representatives One Hundred Sixth Congress, First Session, October 26, 1999
On October 26, 1999, the House of Representatives Committee on International Relations convenes to discuss and markup H.R. 1838, The Taiwan Security Enhancement Act. Chairman Benjamin Gilman explains the amended version of the bill, saying that "It continues to mandate that extra positions be reserved for Taiwanese officers at U.S. military schools, that secure direct communications be established between our Nation and Taiwanese militaries for coordination in the event of a crisis, and that the Congress be kept fully and currently informed of the status of arms sales requests from Taiwan." He maintains that "the United States should, without question, continue to steadfastly meet its security commitments to Taipei as stipulated in the 1979 Taiwan Relations Act." Mr. Gedjensen concurs that America should "stand up very squarely in favor of these democratic institutions" that are to be found in Taiwan. He refutes the Clinton Administration argument for rapprochement with the PRC with the idea that America's support for democracy does not constitute "some kind of military adventure" against China. Ranking Democrat of the Asian Subcommittee Mr. Lantos, however, believes that "is a piece of legislation which is unneeded, counterproductive, and while it does have some Democratic support, I don't think it is quite accurate to refer to it as a bipartisan piece of legislation." He states that "I have no doubt in my mind that the genesis of this legislation is politically designed to embarrass the Administration". In the end, the amendment passes 32 to 6.
United States. Government Printing Office
1999-10-26
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Budget and Economic Outlook: Fiscal Years 2012 to 2022
From the Summary: "The federal budget deficit--although starting to shrink--remains very large by historical standards. How much and how quickly the deficit declines will depend in part on how well the economy does over the next few years. Probably more critical, though, will be the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year under current law. The pace of the economic recovery has been slow since the recession ended in June 2009, and the Congressional Budget Office (CBO) expects that, under current laws governing taxes and spending, the economy will continue to grow at a sluggish pace over the next two years. That pace of growth partly reflects the dampening effect on economic activity from the higher tax rates and curbs on spending scheduled to occur this year and especially next. Although CBO projects that growth will pick up after 2013, the agency expects that the economy's output will remain below its potential until 2018 and that the unemployment rate will remain above 7 percent until 2015. […] The economic forecast was completed in early December 2011, and the estimates of 2011 values shown in tables and figures in Chapter 2 and Appendix E are based, except when otherwise noted, on information that was available by that date. Numbers in the text and tables may not add up to totals because of rounding. Unless otherwise indicated, years referred to in describing the economic outlook are calendar years, and years referred to in describing the budget outlook are federal fiscal years (which run from October 1 to September 30). Some of the figures have white vertical bars that indicate the duration of recessions. (A recession extends from the peak of a business cycle to its trough.) Supplemental data for this analysis are available on CBO's Web site (www.cbo.gov)."
United States. Congressional Budget Office
2012-01
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Congressional Budget Office Cost Estimate: H.R. 263, Cybersecurity Education Enhancement Act of 2008
This Congressional Budget Office (CBO) cost estimate addresses H.R. 263, Cybersecurity Education Enhancement Act of 2008. From the Summary: "H.R. 263 would authorize the appropriation of $5 million for each of fiscal years 2009 and 2010 for the Department of Homeland Security (DHS) to make grants to institutions of higher education to establish or expand cybersecurity programs. In addition, the bill would direct DHS to establish a fellowship program for nonfederal employees to work temporarily in the department's National Cybersecurity Division. CBO estimates that implementing the bill would cost about $11 million over the 2009-2013 period, subject to appropriation of the necessary amounts. Enacting H.R. 263 would not affect direct spending or revenues. H.R. 263 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local or tribal governments."
United States. Congressional Budget Office
2008-08-21
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Congressional Budget Office Cost Estimate: S. 546, RESPONSE Act of 2016
"S. 546 [Railroad Emergency Services Preparedness, Operational Needs, and Safety Evaluation (RESPONSE) Act of 2016] would establish the Railroad Emergency Services subcommittee under the Federal Emergency Management Agency's (FEMA's) National Advisory Council (NAC). The act would direct the subcommittee to evaluate several aspects of the ability of emergency personnel to respond to hazardous materials incidents involving trains. S. 546 would require the subcommittee to provide recommendations to the NAC on methods to improve response to such incidents within one year of enactment of S. 546. Under the legislation, the subcommittee would terminate within nine months of submitting the recommendations to the NAC. Subsequently, the act also would require FEMA to provide to the Congress a report detailing the implementation of those recommendations in each of the following two years."
United States. Congressional Budget Office
2016-09-21
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Congressional Budget Office Cost Estimate: S. 3309, DHS Cyber Incident Response Teams Act of 2018
"S. 3309 would codify the establishment and responsibilities of hunt and incident response teams (HIRTs) under the authority of the National Cybersecurity and Communications Integration Center (NCCIC) in the Department of Homeland Security (DHS). Under the bill, HIRTs would continue to provide assistance to federal and nonfederal entities affected by malicious cyber activity. S. 3309 also would require the NCCIC to report to the Congress on HIRTs' activities at the end of each of the first four fiscal years following the bill's enactment. Using information from DHS and considering information about similar reporting requirements, CBO [Congressional Budget Office] estimates that implementing S. 3309 would cost less than $500,000 over the 2019-2023 period; such spending would be subject to the availability of appropriated funds."
United States. Congressional Budget Office
2018-10-09
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Congressional Budget Office Cost Estimate: S. 3437, Federal Rotational Cyber Workforce Program Act of 2018
"S. 3437 would direct the Office of Personnel Management to create policies and procedures to allow federal cybersecurity professionals to temporarily move from one agency to another for up to one year. The authority would expire in five years. CBO [Congressional Budget Office] estimates that implementing S. 3437 would cost less than $500,000 annually over the 2019-2023 period for new regulations, additional staff training, and administrative expenses. Any spending would be subject to the availability of appropriated funds."
United States. Congressional Budget Office
2018-10-26
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Congressional Budget Office Cost Estimate: S. 594, National Cybersecurity Preparedness Consortium Act of 2017
"S. 594 would authorize the Department of Homeland Security (DHS) to work with a consortium to assist state and local governments to prepare for and respond to cybersecurity risks and incidents. Since 2014, the department has awarded $13 million in grants to members of the National Cybersecurity Preparedness Consortium to deliver cybersecurity training and technical assistance to state and local governments. CBO [Congressional Budget Office] expects that DHS would continue to provide a similar level of support under S. 594. CBO estimates that DHS would provide $3 million in new grant funding each year, assuming appropriation of the estimated amounts. In total, implementing S. 594 would cost $15 million over the 2019-2023 period."
United States. Congressional Budget Office
2018-10-09
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Congressional Budget Office Cost Estimate: H.R. 4061, Cybersecurity Enhancement Act of 2009
From the Summary: "H.R. 4061 would reauthorize several National Science Foundation (NSF) programs that aim to enhance cybersecurity (the protection of computers and computer networks from unauthorized access). The bill also would require the National Institute of Standards and Technology (NIST) to establish a cybersecurity awareness program and implement standards for managing personal identifying information stored on computer systems. Finally, the bill would establish a task force to recommend actions to improve cybersecurity research and development. Based on information from NSF and NIST and assuming appropriation of the necessary amounts, CBO [Congressional Budget Office] estimates that implementing H.R. 4061 would cost $639 million over the 2010-2014 period and $320 million after 2014. Enacting the legislation would not affect direct spending or revenues. H.R. 4061 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments."
United States. Congressional Budget Office
2009-12-10
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Congressional Budget Office Cost Estimate: H.R. 3101, Strengthening Cybersecurity Information Sharing and Coordination in Our Ports Act of 2017
From the Summary: "H.R. 3101 would require the Department of Homeland Security (DHS) to expand efforts to enhance the cybersecurity of U.S. ports. The bill also would clarify that the Coast Guard, the agency within DHS primarily responsible for activities related to maritime security, is authorized to pursue efforts related to cybersecurity. Based on information from DHS, CBO [Congressional Budget Office] estimates that implementing H.R. 3101 would cost $38 million over the 2018-2022 period, assuming appropriation of the necessary amounts. Enacting the bill would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. CBO estimates that enacting H.R. 3101 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028."
United States. Congressional Budget Office
2017-10-06
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Congressional Budget Office Cost Estimate: S. 772, SBA Cyber Awareness Act
"S. 772 would require the Small Business Administration (SBA) to report annually to the Congress on the state of its information technology (IT) systems and cybersecurity, the methods it could use to improve cybersecurity, any IT components or systems it has that were produced in China, and any recent major cybersecurity incidents and subsequent responses. Some additional reports and requirements would be imposed on the SBA if a major cybersecurity incident occurred."
United States. Congressional Budget Office
2019-04-23
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Congressional Budget Office Cost Estimate: S. 315, DHS Cyber Hunt and Incident Response Teams Act of 2019
"S. 315 would codify the role and responsibilities of existing hunt and incident response teams (HIRTs) under the authority of the National Cybersecurity and Communications Integration Center (NCCIC) in the Department of Homeland Security (DHS). Under the bill, HIRTs would continue to provide assistance to federal and nonfederal entities affected by malicious cyber activity. S. 315 also would require the NCCIC to report to the Congress on HIRT operations at the end of each of the first four fiscal years following the bill's enactment. On the basis of information from DHS and considering information about similar reporting requirements, CBO [Congressional Budget Office] estimates that enacting S. 315 would cost less than $500,000 over the 2019-2024 period; such spending would be subject to the availability of appropriated funds."
United States. Congressional Budget Office
2019-02-19
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Congressional Budget Office: S. 333, National Cybersecurity Preparedness Consortium Act of 2019
"S. 333 would authorize the Department of Homeland Security (DHS) to coordinate with a consortium to assist state and local governments to prepare for and respond to cybersecurity risks. Since 2014, the department has awarded $13 million in grants to members of the National Cybersecurity Preparedness Consortium to deliver cybersecurity training and technical assistance to state and local governments. CBO [Congressional Budget Office] expects that DHS would continue to provide a similar level of support under S. 333. CBO estimates that DHS would provide $3 million in new grant funding each year; such spending would be subject to the availability of appropriated funds. In total, implementing S. 333 would cost $18 million over the 2019-2024 period."
United States. Congressional Budget Office
2019-02-28
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Congressional Budget Office Cost Estimate: H.R. 5074, DHS Cyber Incident Response Teams Act of 2018
"H.R. 5074 would codify the establishment and responsibilities of hunt and incident response teams (HIRTs) under the authority of the National Cybersecurity and Communications Integration Center (NCCIC) in the Department of Homeland Security (DHS). Under the bill, HIRTs would continue to provide assistance to federal and non-federal entities affected by malicious cyber activity."
United States. Congressional Budget Office
2018-03-15
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Congressional Budget Office Cost Estimate: H.R. 4098, Secure Federal File Sharing Act
"H.R. 4098 would require federal agencies to develop and implement a plan within six months to ensure that computer systems, including those used by contractors, are secure from the use of certain file-sharing software. Affected software, known as peer-to-peer (P2P) file-sharing programs, are applications that allow users to download and directly share electronic files from other users. The legislation would not prohibit the use of all file-sharing programs but would require the Office of Management and Budget (OMB) to develop a procedure for agencies to receive approval to use file-sharing programs. Finally, H.R. 4098 would require agencies to create plans to address security concerns for government computer networks."
United States. Congressional Budget Office
2010-03-10
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U.S. Initial Public Stock Offerings and the JOBS Act [September 27, 2012]
"Over the past decade, many sources have reported a precipitous decline in the number of initial public offerings (IPOs) in the United States. These statistics raise several questions: what has caused such a decline? What are the implications for the U.S. economy, and particularly for job creation? At the same time as IPOs appear to have fallen, the amount of private stock offerings has increased, suggesting growth in an alternative source of equity financing. This report analyzes factors contributing to the decline in IPOs, differences between an IPO involving the sale of shares to the public versus a private stock offering limited to sophisticated investors, and potential economic implications of such a rise in private versus public stock offerings. It also provides analysis of the causes and implications of the stagnation in public IPOs. [...] Enacted on April 5, 2012, in the 112th Congress, the Jumpstart Our Businesses Startup Act (JOBS) Act (P.L. 112-106) is broadly aimed at stimulating capital formation for companies, especially for relatively new and smaller ones. Among other things, the JOBS Act lifts certain impediments to a small company external financing technique known as crowdfunding, establishes a category of firm known as an emerging growth company (EGC), and relaxes various disclosure and accounting requirements for such firms."
Library of Congress. Congressional Research Service
Miller, Rena S.; Shorter, Gary W.
2012-09-27
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JP Morgan Trading Losses: Implications for the Volcker Rule and Other Regulation [August 16, 2012]
From the Document: "JP Morgan Chase (JP Morgan), the nation's largest bank holding company by asset size, had established a reputation for quality risk management. On May 10, 2012, Jamie Dimon, the bank's chairman and chief executive officer (CEO), held an unplanned conference call. As reflected in the firm's first quarter 2012 filings with the Securities and Exchange Commission (SEC), Mr. Dimon reported that, during the early part of the second quarter, a London-based office of the bank (insured depository) unit, the Chief Investment Office (CIO), sought 'to hedge the firm's overall credit exposure' and incurred 'slightly more than [a] $2 billion trading [paper] loss on … synthetic credit positions.' The CEO characterized the trading strategy behind the loss as 'flawed, complex, poorly reviewed, poorly executed and poorly monitored [and noted that] the portfolio has proven to be riskier, more volatile and less effective as economic hedge than we thought.' He also said that the portfolio still contained securities with 'a lot of risk and volatility going forward.... It could cost us as much as $1 billion or more…. [I]t is risky, and it will be for a couple of quarters.' The loss was charged to the bank's corporate and private equity division, which houses the CIO. During the conference call, Mr. Dimon also indicated that the loss would be partially offset by a $1 billion gain from the sale of securities by the unit, resulting in an $800 million second quarter loss for the division."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Murphy, Edward Vincent; Miller, Rena S.
2012-08-16
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Treasury Securities and the U.S. Soverign Credit Default Swap Market [August 15, 2011]
"Paying the public debt is a central constitutional responsibility of Congress (Article I, Section 8). U.S. Treasury securities, which represent nearly all federal debt, have long been considered riskfree assets. The size of federal deficits and the projected imbalance between federal revenues and outlays, however, have raised concerns among some, including the rating agency Standard & Poor's (S&P), which downgraded the U.S. sovereign credit rating from AAA to AA+ on August 5, 2011. S&P also cited 'political brinksmanship' in debt ceiling negotiations as a factor, which raised the issue of a hypothetical federal default. Prices for Treasuries suggest that financial markets continue to consider federal debt instruments a safe haven despite the S&P downgrade. Continued concerns about rising federal debt and the ability of policymakers to reach solutions to fiscal challenges could raise borrowing costs and negatively affect capital markets. A credit default swap (CDS) contract is a way to hedge or speculate on credit risk, including sovereign credit risk. A CDS protection buyer, in exchange for an annual fee set by the market and paid quarterly, can trade an asset issued by a 'reference entity' (or a cash equivalent) for its face value if a 'credit event' occurs. A CDS buyer need not own or borrow an asset issued by the reference entity, thus may hold a 'naked CDS.' A committee of the derivatives trade organization, the International Swaps and Derivatives Association (ISDA), determines whether a credit event has occurred, according to their interpretation of applicable guidelines. In general, failure to make a timely payment usually constitutes a credit event, as does a repudiation of debts, and in some cases, debt restructuring."
Library of Congress. Congressional Research Service
Austin, D. Andrew; Miller, Rena S.
2011-08-15
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Speculation, Fundamentals, and Oil Prices [September 2, 2011]
"High oil prices affect nearly every household and business in the United States. During the course of 2008, oil prices doubled to more than $145 per barrel and then fell by 80%. In early 2011, there was a run-up of about 20%, sending gasoline prices to near 2008 highs. Few would rule out the possibility of similar price swings in the months to come. What explains oil price volatility? Some consider price movements such as those of 2008 and early 2011 to be more extreme than warranted by the fundamentals of supply and demand. […] The role of speculators in oil and other commodity markets has attracted congressional interest. Staff reports by the Permanent Subcommittee on Investigations of the Senate Committee on Homeland Security and Government Affairs found that excessive speculation has had 'undue' influence on wheat price movements and in the natural gas market. A 2011 report by the minority staff of the House Committee on Oversight and Government Reform argues that 'addressing excessive speculation offers the single most significant opportunity to reduce the price of gas for American consumers.' Legislation before the 112th Congress (S. 1200 and H.R. 2328) would authorize and direct the CFTC [Commodity Futures Trading Commission] to take certain actions to reduce the volume of speculation in oil and related energy commodities. Another bill, H.R. 2003, would impose a tax on oil futures, swaps, and options that were not used for hedging commercial risk. This report provides background on financial speculation in oil, the workings of oil derivatives markets, and the different types of firms that trade in those markets. It reviews the concepts of manipulation and excessive speculation, and it briefly describes the fundamental factors that affect oil prices. This report will be updated as events warrant."
Library of Congress. Congressional Research Service
Jickling, Mark; Miller, Rena S.; Nerurkar, Neelesh
2011-09-02
