2023 Financial Markets Conference - Old Challenges in New Clothes: Outfitting Finance, Technology, and Regulation for the Mid-2020s

May 14–17, 2023

Papers, Presentations, and Full-Length Session Videos

Keynote address: Mervyn King Adobe PDF file format
Mervyn King, Baron King of Lothbury, United Kingdom Parliament House of Lords
Moderator: Julia Coronado, Founder, MacroPolicy Perspectives

Keynote Address: Gary Gensler Off-site link
Gary Gensler, Chair, Securities and Exchange Commission
Moderator: Tom Barkin, President and Chief Executive Officer, Federal Reserve Bank of Richmond

Keynote Address: Charles Calomiris
Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School [Presentation Adobe PDF file format]
Moderator: Larry Wall, Director, Center for Financial Innovation and Stability, Federal Reserve Bank of Atlanta

Keynote Address: Raphael Bostic and Austan Goosbee
Raphael Bostic, President and Chief Executive Officer, Federal Reserve Bank of Atlanta
Austan Goolsbee, President and Chief Executive Officer, Federal Reserve Bank of Chicago
Moderator: Jeanna Smialek, Federal Reserve and Economics Reporter, The New York Times

Policy Sessions
How to Conduct Monetary Policy amid Higher Inflation and a Nonbinding Zero (Effective) Lower Bound?
Inflation began a dramatic rise in the spring of 2021 and has persisted at extremely high levels, causing the Federal Reserve and many central banks around the world to abruptly shift monetary policy stances from highly expansionary toward potentially quite restrictive. This panel will discuss why many central bankers miscalculated the risk of persistently high inflation coming out of the COVID-19 pandemic and the tools and strategies that will be required to regain price stability. Topics of discussion will include:
  • Pros and cons of rules-based versus discretionary monetary policy
  • Future role of "unconventional" tools such as forward guidance and balance sheet policy that played a significant role in the Fed's response to the Global Financial Crisis and its aftermath
  • Importance of anchoring inflation expectations, especially in light of the recent upward trend in various expectations measures
  • Relevance of the FOMC's recently revised Statement on Longer-Run Goals and Monetary Policy Strategy from August 2020 that introduced a flexible inflation targeting regime
Moderator: William English, Professor in the Practice of Finance, Yale School of Management
Panelist: Troy Davig, Chief Economist, Symmetry Investments
Panelist: Kristin Forbes, Jerome and Dorothy Lemelson Professor of Management and Professor, Global Economics and Management, Massachusetts Institute of Technology Sloan School of Management [Presentation Adobe PDF file format]
Panelist: Jan Hatzius, Chief Economist and Head of Global Investment Research, Goldman Sachs [Presentation Adobe PDF file format]
Panelist: John Taylor, Professor of Economics, Stanford University [Presentation Adobe PDF file format]

What Opportunities and Risks for Financial Markets Accompany the Growing Role of Nonbank Financial Institutions?
Nonbank financial institutions have assumed a larger role in the provision of some key services, taking substantial market share from banks. Shifting market shares are partly due to a combination of technological developments that facilitate participation of nonbank institutions and regulatory and governmental actions that inhibit banks' ability to compete. Whatever the cause, one could argue that the increased role of nonbanks is socially desirable as it reduces the systemic importance of banks and increases competition. One could also argue that such developments are adverse as nonbanks are often outside important parts of the regulatory perimeter, may be less able to handle adverse market conditions, and may become systemically important.
Moderator: Andreas Lehnert, Director, Division of Financial Stability, Federal Reserve Board of Governors
Panelist: Stijn Claessens, Head of Financial Stability Policy and Deputy Head of the Monetary And Economic Department, Bank for International Settlements
Panelist: Dennis Kelleher, Cofounder, President, and Chief Executive Officer, Better Markets [Remarks Adobe PDF file format| Presentation Adobe PDF file format]
Panelist: Meghan Neenan, Managing Director and North American Head of Nonbank Financial Institutions, Fitch Ratings [Presentation Adobe PDF file format]
Panelist: Philipp Schnabl, Martin J. Gruber Professor in Asset Management and Professor of Finance, New York University Stern School of Business [Presentation Adobe PDF file format]

How Might Web3 Change the Financial System?
Web3 is a hot buzzword, but what does it mean for financial services? This session will start with a high-level overview of Web3, then discuss its implications for the financial system, starting with a discussion of how financial services would be provided and including explanations of terms such as tokenization and DeFi. The discussion then will shift to consider Web3's potential benefits and risks for the financial system.
Presenter: Christine Parlour, Professor and Sylvan C. Coleman Chair in Finance and Accounting, Haas School of Business, University of California, Berkeley [Presentation Adobe PDF file format]
Moderator: Marina Moretti, Deputy Director, Monetary and Capital Markets Department, International Monetary Fund
Panelist/Discussant: Hilary J. Allen, Professor of Law and Associate Dean for Scholarship, American University Washington College of Law
Panelist/Discussant: Stephen Diehl, Software Engineer and Blogger, stephendiehl.com
Panelist/Discussant: Richard Walker, Partner, Bain & Company

Mitigating Risks and Preserving Financial Stability in an Appropriately Restrictive Policy Environment
In response to persistently higher inflation, central banks have raised interest rates at the fastest pace since the 1980s. As the economy weakens and economic and financial uncertainty grows, monetary policy's effect on financial conditions and market volatility has become increasingly important in setting optimal interest rate and balance sheet policies. These financial stability concerns already are present in falling house prices, illiquid markets, a strong dollar, and refinancing risks. In this session, the panel will discuss these and other financial stability concerns. For example, how might central banks respond to a downward price spiral caused by forced asset sales from margin calls while maintaining a tight monetary policy stance over an extended period?
Moderator: Lorie Logan, President and Chief Executive Officer, Federal Reserve Bank of Dallas
Panelist: Viral V. Acharya, C.V. Starr Professor of Economics, New York University Stern School of Business, former Deputy Governor, Reserve Bank of India
Panelist: Seth Carpenter, Managing Director and Chief Global Economist, Morgan Stanley
Panelist: Kathy Jones, Managing Director and Chief Fixed Income Strategist, Schwab Center for Financial Research
Panelist: Brad Setser, Whitney Shepardson Senior Fellow, Council on Foreign Relations

Back to the 1980s or Not? The Drivers of Real and Inflation Risks in Treasury Bonds
Presenter: Carolin Pflueger, Assistant Professor, University of Chicago Harris School of Public Policy [Presentation Adobe PDF file format]
Discussant: Min Wei, Senior Associate Director, Program Direction Section, Monetary Affairs, Federal Reserve Board of Governors [Presentation Adobe PDF file format]
Moderator: Mark Jensen, Vice President and Senior Economist, Federal Reserve Bank of Atlanta
Research Sessions
Nonbank Financial Intermediaries and Financial Stability
Presenter: Sirio Aramonte, Principal Economist, Federal Reserve Board of Governors [Presentation Adobe PDF file format]
Discussant: Valentina Bruno, Professor of Finance and Kogod Research Professor, American University [Presentation Adobe PDF file format]
Moderator: Larry Wall, Research Center Executive Director, Center for Financial Innovation and Stability