Myron Scholes Forum, October 23, 2014
Richard Berner, director of the Office of Financial Research (OFR) at the U.S. Department of the Treasury
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 U.S. 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?