As part of the YPFS Lesson Learned Oral History Project, Ray Dalio, Founder, Chairman and Co-Chief Investment Officer of the investment firm Bridgewater Associates sat down with Andrew Metrick, Janet L. Yellen Professor of Finance and Management and the director of YPFS, in October 2019 to share reflections on the Global Financial Crisis ( 2007-09) from the industry perspective. In the interview, Dalio speaks to how Bridgewater responded to the Global Financial Crisis, and more broadly shared his theories on managing a hedge fund in times of crisis, as discussed in his recently published book Principles for Navigating Big Debt Crises (2018).
Dalio also notes how computer programming has revolutionized our ability to foresee the climate in funding markets from a policy perspective. In particular Dalio also discusses the importance of applying macroprudential policy with more sophistication through targeted intervention of the distressed sectors of the financial system, as opposed to generally adjusting interest rates. He also underscores crisis communication and competent managerial and operational staff as critical components to successfully mitigating a crisis.