Yale Program on Financial Stability to Hold Inaugural Conference

The Yale Program on Financial Stability will hold its inaugural conference at Yale SOM’s Edward P. Evans Hall on August 1. The conference, which brings together academics and regulators to discuss the management of systemic risk in the financial markets, will focus on the topic of bank capital.

The keynote speaker at the one-day event will be Paul Tucker, the former deputy governor of the Bank of England for financial stability. Other speakers will include academic researchers and representatives of central banks and other agencies. The conference is open to the public.

Professor Andrew Metrick, the director of YPFS, says that the amount of capital that banks are required to hold remains a key issue in the wake of the financial crisis of 2007–2009. “Regulators are facing the question right now, what should capital levels be?” he says.

At every bank, he explains, “some fraction of the capital stock is equity and some fraction of it is debt. And you might think that the more equity they have, the safer they are. On the other hand, there may be costs associated with requiring them to hold more equity, and the tradeoff between those costs and benefits is very hotly debated.” The topic is well suited to YPFS’s mission of translating academic research into practical guidance for regulators, he adds: “We’re looking for areas that are very active from an academic perspective and very important from a regulatory perspective.”

The conference will conclude the two-week Systemic Risk Institute, a program held by YPFS for economists working on systemic risk at regulatory agencies and central banks.

The Yale Program on Financial Stability, the YPFS conference, and the Systemic Risk Institute were established with a grant from the Alfred P. Sloan Foundation.