Strengthening the Financial System: The Macroprudential Toolkit

Myron Scholes Global Markets Forum

October 23, 2014, 4:15–5:45 P.M.

The financial crisis has given rise to a widespread appreciation for a different approach to policymaking. Financial stability is now a statutory policy objective for every federal financial regulator, policy analysis is focused on assessing threats to financial stability, and policymakers are creating more tools to combat those threats—developing what we call the macroprudential toolkit. Macroprudential is a fancy word to mean that we now must look across the entire financial system, not just in a few institutions or markets, to assess and mitigate threats to financial stability.

In this talk, Richard Berner, director of the Office of Financial Research (OFR) at the US Department of the Treasury, tried to answer several questions. Among them: How do policymakers turn theory into practice? What are current threats to financial stability? How can we assess and monitor them? What’s in the toolkit to mitigate those threats? Are they effective? Do they cover the financial system or are there significant gaps?

The Myron Scholes Global Markets Forum is part of the Initiative on Global Markets (IGM) and is generously sponsored by Myron Scholes.

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Speaker Profiles

Richard Berner has served as director of the Office of Financial Research at the US Department of the Treasury since January 2013. In this capacity, he leads the office that serves the Financial Stability Oversight Council, its member agencies, and the public by improving the quality, transparency, and accessibility of financial data and information; by conducting and sponsoring research related to financial stability; and by promoting best practices in risk management.

Berner previously served as counselor to the secretary of the Treasury. Before joining the Treasury, he was co-head of global economics at Morgan Stanley. He has also worked at Mellon Bank, Salomon Brothers, Morgan Guaranty Trust Company, Wharton Econometrics, and the Federal Reserve Board.

Berner received his bachelor’s degree from Harvard College and PhD from the University of Pennsylvania.