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Yale SOM to Offer Master’s Degree in Systemic Risk

The one-year program will train early- and mid-career employees of central banks and other major regulatory agencies with a mandate to manage systemic risk.

Beginning in the 2017–18 academic year, the Yale School of Management will offer a one-year master of management studies degree in systemic risk. Taught by leading Yale finance scholars and experienced financial officials, the program will provide early- and mid-career employees of central banks and other major regulatory agencies with academic and practical training to prepare them to manage and mitigate future financial crises.

This new program advances Yale SOM’s mission to educate leaders for business and society, said Dean Edward A. Snyder. “Systemic risk is the type of ‘mega’ issue at the nexus of business and society that Yale SOM thrives at addressing,” Snyder said, “in part because of the school’s connectivity across Yale and globally through the Global Network for Advanced Management.”

Andrew Metrick, the Michael H. Jordan Professor of Finance and Management and the director of the Yale Program on Financial Stability, will lead the program.

“Since the global financial crisis, central banks and other major regulatory agencies all over the world have been given new responsibilities to oversee this animal that we call financial stability or systemic risk,” Metrick said. Little formal training in the area currently exists. “There’s now an ever-increasing amount of rigorous academic knowledge on the subject and many lessons that have been learned through hard practical experience. This program will put those together.”

The program’s core faculty will include Metrick and Gary Gorton, the Frederick Frank Class of 1954 Professor of Management & Professor of Finance; along with other Yale SOM finance faculty, they have produced influential scholarship about the origins of the financial crisis. Visiting faculty will include leaders in the financial services industry and current and former central bankers.

The program will admit a select group of scholar-regulators who have been nominated by their institutions. Students will receive training in macroprudential policy, financial crisis management, global financial regulation, monetary economics, capital markets, and central banking.

Students will take a slate of required courses on economics, finance, banking, and financial crisis management, and choose from elective courses in statistics, economics, and finance offered at Yale SOM and throughout Yale University. They will also participate in a yearlong Thesis Symposium, developing a thesis project and attending research and policy presentations by classmates and visiting speakers.

While at Yale, Metrick said, students will develop a network that will benefit their home countries and the world in the event of a future financial crisis. 

“We would like to build a global community of professionals who specialize in this area and who are able to cross borders, literally and figuratively, when there’s another crisis—be able to have conversations with each other, to share best practices, to communicate before a crisis and during a crisis,” he said.

The master’s degree program augments Yale SOM’s existing initiatives focused on understanding and managing systemic risk. The Yale Program on Financial Stability (YPFS), founded in 2013 and also led by Metrick, produces a series of case studies and hosts an annual two-week training institute and an academic conference on financial stability. This year’s conference will take place on Friday, July 29.

Metrick and former Treasury Secretary Timothy Geithner, who chairs the YPFS board, also teach the Yale course Global Financial Crisis, which examines the causes of the financial crisis of 2008 and policy responses to that crisis, as well as lessons for future crises. (The course is now available on Coursera.)