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ANU Crawford School of Public Policy

Systemic risk and economic policy

One-day short course


When:

22nd July 2016
9.30am-4.30pm

Where:

ANU Crawford School of Public Policy

Cost:

A$1,100

This one-day course will provide you with an introduction to the topic of systemic risk, which has emerged as one of the greatest public policy challenges of the past decade.

At its worst, systemic risk can result in the near-collapse of financial systems and economies as illustrated in the US and Europe in 2007-2008. The course will cover the mechanisms through which systemic risk can be realised, how countries can respond in terms of preventative policy settings and how crises can be resolved once they occur. A look at the historical and current role of systemic risk for Australia will also be a feature of the course.

Course overview

 

Unlike most other policy choices that a nation must make, those relating to systemic risk often have both a domestic and an international element to them. The course will illustrate the causes and consequences of systemic risk, provide awareness of the types of national and international economic and policy settings that can contribute to the buildup of systemic risk, as well as an understanding of the types of policies that can be used nationally and internationally to alleviate economic and financial system pressure. The course is suited to those working in Federal or State Treasuries, Central Banks, the Office of National Assessments and the Australian Prudential Regulatory Authority, as well as those more generally interested in understanding the interaction between policy and systemic risk and vice versa.

Following an introduction to the topic of systemic risk, the course will examine how systemic risk is likely to arise. First, an overview of the international transmission of financial market risk will be undertaken with a focus on the transmission of financial market crises and contagion and policy responses and lessons that have been emerged over the last two decades of crises.

Second, participants will learn about role of lending booms in building systemic risk as well as a how to detect and influence them. Third, the focus will turn to an examination of the role of individual financial entities in an economy and their connectedness to the national (and international) financial system by examining emergent global trends in macro prudential policy.

It is remarkable that Australia has not suffered from a recession since 1991 despite the small open nature of the economy, and the incidence of a large regional crisis (Asia 1997-1998) and the global financial crisis and great recession (2008-??). After lunch an overview of the effect of these crises, Australia’s preceding and subsequent policy settings and fortunate circumstances will be provided to give participants a sense of the place of Australia during these extreme episodes of realized systemic risk.

The afternoon will then be devoted to examining in more detail policy responses available for crisis resolution and to the role of cross border banking and regulatory cooperation. Based on the experience of developing and developed countries in the resolution of their respective systemic banking crises over the past three decades, we will discuss the benefits and shortcomings of different resolution policies. We will then discuss aspects of cross-border regulatory cooperation before and after the 2007-2008 crisis, especially recent progress in this area.

The concepts of the course are clearly related to one another. Participants should come away from the course with a basic understanding of the complexity of the interlinkages between financial market entities nationally and internationally, the role of policy settings in exacerbating or alleviating risk, an understanding of the possibilities for and implications of international policy coordination.

Course presenter (s)


Professor Thorsten Beck

Professor Thorsten Beck is professor of banking and finance at Cass Business School in London. He is also a research fellow of the Centre for Economic Policy Research (CEPR) and the CESifo. He was professor of economics from 2008 to 2014 at Tilburg University and the founding chair of the European Banking Center from 2008 to 2013. Previously he worked in the research department of the World Bank and has also worked as consultant for – among others – the European Central Bank, the BIS, the IMF, the European Commission, and the German Development Corporation. His research, academic publications and operational work have focused on two major questions: What is the relationship between finance and economic development? What policies are needed to build a sound and effective financial system? Recently, he has concentrated on access to financial services, including SME finance, as well as on the design of regulatory and bank resolution frameworks. In addition to numerous academic publications in leading economics and finance journals, he has co-authored several policy reports on access to finance, financial systems in Africa and cross-border banking. His country experience, both in operational and research work, includes Bangladesh, Bolivia, Brazil, China, Colombia, Egypt, Mexico, Russia and several countries in Sub-Saharan Africa. In addition to presentation at numerous academic conferences, including several keynote addresses, he is invited regularly to policy panels across Europe. He has also taught courses at the Central Banks of Albania, Turkey, and Tunisia, as well as the European Central Bank, the European Commission and the German Ministry of Finance. He is also managing coeditor of Economic Policy as well as the Review of Finance. He holds a PhD from the University of Virginia and an MA from the University of Tübingen in Germany.

Professor Renée Fry-McKibbin

Renée Fry-McKibbin is a Professor of Economics in the Crawford School of Public Policy, and the Associate Dean – Research of the College of Asia & the Pacific at the Australian National University. She is the Co-Director of the Finance and Macroeconomy Program and the Commodities and the Macroeconomy Program within the Centre for Applied Macroeconomic Analysis (CAMA). She is a research associate of the Research Project in Forecasting at George Washington University, and the Norwegian Centre for Macroeconomic and Petroleum Analysis (CAMP). She is an associate editor for the Journal of Banking and Finance, and Finance Research Letters, as well as a co-editor of the Economic Record. She was a research associate of Cambridge Finance and Policy (CFAP) at the University of Cambridge from 2008-2012. She has been a visiting scholar or consultant to the European Central Bank, the Federal Reserve Bank of Atlanta, the International Monetary Fund, the Bank of England, the Bundesbank, the Department of Prime Minister and Cabinet, the Federal Treasury, AUSAID, the New Zealand Treasury and the Reserve Bank of New Zealand. She completed her PhD in Economics at the University of Melbourne in 2002. Renée has published widely in the area of financial market and macro econometrics, mainly focusing on developing statistical frameworks or tests to model the transmission of financial market crises, and to improve macroeconomic modeling using structural vector auto-regression models. She also examines questions in the area of commodity economics. Her key publications can be found in the Journal of Business and Economic Statistics and the Journal of Economic Literature.

Course date:9.30am–4.30pm 22 July 2016
Venue: Crawford School, ANU
Enrol: T 02 6125 2154 E csee@anu.edu.au
Cost: $1,100 GST incl; Group discounts applicable

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