September 23–24, 2010
Courtesy of ThomsonReuters
In conjunction with the International Monetary Fund, the Federal Reserve Bank of Chicago will hold its thirteenth annual International Banking Conference on September 23–24, 2010. The purpose of these conferences is to address current issues affecting international financial markets. This year, we examine the role of macroprudential regulation in the financial sector. Shocked by the experience of the last few years, many argue that the more traditional microprudential regulatory tools are inadequate to create a safe and stable financial system. The microprudential paradigm relies on the presumption that the financial system as a whole can be made safe by ensuring individual financial institutions are made safe. This ignores interconnections and externalities, whereby the actions of one financial institution or events in financial markets can lead to spillover effects that adversely affect general market conditions, other financial institutions, and ultimately the economy as a whole. Instead, it is argued, there is a need for both microprudential approaches to regulate individual institutions and macroprudential approaches to manage the overall financial system risks. However, a number of important questions must be answered:
- What are the theoretical motivations for such regulation?
- How would it interact with other regulatory and macroeconomic policies, especially monetary policy?
- What would be the specific macroprudential tools?
- Who should have control over the macroprudential tools?
- How should a macroprudential regulator be structured?
- Where should it be housed?
- How can macroprudential policies be structured across national borders?
- What role, if any, can market discipline play in supporting macroprudential objectives?
These and related issues will be addressed at the two-day conference.
As always, the conference will focus on the implications for public policy. It will feature keynote presentations by Paul Volcker, Chairman of the U.S. President’s Economic Recovery Advisory Board and former Chairman of the Federal Reserve System; Tommaso Padoa-Schioppa, Chairman, Promontory Financial Group Europe and Former Chairman of the Basel Committee on Banking Supervision; Jaime Caruana, General Manager of the Bank for International Settlements and Former Chairman of the Basel Committee on Banking Supervision; and Charles Taylor, Director of the Pew Charitable Trust Financial Reform Project and Former Executive Director of the Group of Thirty. The makeup of the conference is truly international. The audience consists of representatives from central banks, regulatory and supervisory agencies, financial institutions, trade associations and academic institutions from around the globe. Last year, attendees came from some 30 countries.
Updates, including those for the agenda, will be posted to this site as they become available.