New Paul A. Volcker Scholarship Will Support Master’s in Systemic Risk Students

The Volcker Family Foundation has made a multi-year commitment to create the Paul A. Volcker Scholarship, which will enable the school to support students in the Master’s in Systemic Risk program who would not otherwise be able to attend. The Systemic Risk program brings early- and mid-career employees of central banks and other financial regulatory agencies around the world to Yale for a year of intensive study of the theory and practice of systemic risk. The program aims to cultivate an international community of public administrators with a deep understanding of financial stability-related issues, and the new scholarship will extend its reach.

The scholarship is named in memory of Paul A. Volcker, who served two terms as chairman of the Board of Governors of the Federal Reserve System from 1979 to 1987 and was widely recognized for his efforts to bring down high levels of inflation. He held leadership roles in both the public and private sector, including undersecretary of the treasury for monetary affairs and chairman of James D. Wolfensohn, Inc., and led numerous government and NGO commissions working on issues such as public service, accounting standards, and corruption in the UN Oil-for-Food Program and at the World Bank. During the Global Financial Crisis, he served on the President’s Economic Recovery Advisory Board and advocated for implementation of legislation that prevented banks from making risky bets with deposits, later dubbed the “Volcker Rule.”

Volcker’s life stands as a model for students in the Systemic Risk program, said Andrew Metrick, the Janet L. Yellen Professor of Finance and Management and the director of the Yale Program on Financial Stability. “I can think of no better exemplar for public service in financial policymaking than Paul Volcker, and it is a tremendous honor for our program to be associated with him in this way,” he said. “This gift will also have a very meaningful, practical impact in enabling us to reach students in home institutions that don’t have the resources to sponsor them.”

The Yale Program on Financial Stability and the Master’s in Systemic Risk program both grew out of Metrick’s experience working in the federal government during the Global Financial Crisis. While serving as senior economist for finance for the Council of Economic Advisors, he realized that the academic community had very little applicable expertise to offer policymakers attempting to stabilize the financial system, and he resolved to bridge that gap. YPFS has since developed deep expertise in the management of financial crises, providing key information to academics and policymakers through a summer institute, an online journal, and a comprehensive database of historical financial crisis responses, in addition to administering the Systemic Risk degree program. The resources created by YPFS are regularly consulted by regulators and central bankers, including current U.S. Treasury Secretary Janet Yellen.

Volcker was himself a contributor to the YPFS’s efforts, visiting Yale for discussion with other former policymakers and participating in a 2019 interview with Andrew Metrick as part of the program’s “Lessons Learned” series.

Since its founding in 2017, the Systemic Risk program has graduated 47 students, with ten more currently enrolled at Yale. Most students are sponsored by a home institution—generally a central bank or ministry of finance—and return to their employers with new expertise in macroprudential policy, financial crisis management, global financial regulation, monetary economics, and central banking, as well as links to their fellow alumni in parallel institutions around the world. The Paul A. Volcker Scholarship will help the school draw students from institutions with limited resources and extend the reach of the program.