2020 Financial Stability Conference: Stress, Contagion, and Transmission

Conference dates

19 Nov 2020 - 20 Nov 2020

Location

Virtual

Description

Call For Papers
2020 Financial Stability Conference: Stress, Contagion, and Transmission

Organized by the Federal Reserve Bank of Cleveland and the Office of Financial Research

Conference Update: Because of the uncertainty of COVID-19 and potential travel restrictions this fall, the conference will be held virtually.

The Federal Reserve Bank of Cleveland and the Office of Financial Research invite the submission of research and policy-oriented papers for the 2020 Financial Stability Conference, which will be held virtually on November 19–20, 2020.

COVID-19 has had a substantial impact on economies and financial markets worldwide, though we recognize this impact is secondary to the wide-ranging health and survival issues this virus has engendered. Nevertheless, the pandemic has provided an authentic, severely adverse stress event through which we can glean specific lessons and apply particular remedies. Though the triggering event was different from what had been expected, the response to the 2008–2009 financial crisis created a suite of tools and playbooks for crisis response. Given current events, understanding exactly how these tools were or might have been implemented, along with how effective they have proven, may help illuminate lessons from the market and institutional responses to the pandemic.

CONFERENCE FORMAT: To develop these themes, the conference will bring together a mix of policymakers, market participants, and researchers for two types of sessions:

- Policy Discussions: These sessions will include keynote addresses and panel discussions in which participantsfrom industry, regulatory agencies, and academia share their insights.

- Research Forums: These forums will follow an academic workshop format and include sessions to discuss submitted papers.

TOPICS: We welcome submissions of research on topics related to potential financial stability risks facing financial markets and institutions, sources of financial system resilience, and related public policy. Conference topics include but are not limited to the following.

The Effects of Macroprudential and Monetary Policies on Financial Stability
The pandemic has levied a major shock to the US financial system, and, while regrettable in itself, the event provides the opportunity to assess how well macroprudential policies reduced systemic vulnerabilities and promoted resilience within the financial system. The global nature of a pandemic calls forth policy coordination both within and across countries. It again raises questions about costs and benefits of quantitative easing, asset support programs, and impacts of low policy rates.
- Interactions between macroprudential and monetary policy
- Financial stability implications of different monetary regimes (floor, corridor, make-up strategies, standing repo facilities) and nonstandard policies (large balance sheets, negative rates, quantitative easing)
- Financial stability councils, central banks, and policy coordination with divided responsibility
- Data needs for policy tools
- Lessons from the international experience

Financial Market Frictions and Liquidity
The early stages of the pandemic exposed liquidity problems across a range of markets despite a decade of regulations focused on issues of liquidity. What does the pandemic tell us about tail risk, and what vulnerabilities were revealed in corporate, sovereign, and institutional markets? How effective was the response, both nationally and internationally? Supporting the liquidity of banks seemed not enough to stabilize markets; given this fact, what are the challenges of a more important nonbank financial sector?
- Tail risks and uncertainty
- Risk management and implicit models of risk
- CCPs, clearinghouses, and derivatives markets
- Short-term funding, securities financing, and collateralization
- Valuation risk for illiquid assets (commercial real estate, leverage loans, and so on)
- Impact of capital and liquidity regulation

Networks and Contagion
This past year has shown the issue of contagion is not just an analogy. What have we learned about contagion through a network, and which of those lessons have relevance for the stability of financial networks? The pandemic exposed the importance and weaknesses of the connections between people, between firms as supply chains, and between financial firms and markets.
- Lessons from social and epidemiological networks
- Contagion, networks, and interconnectedness
- Supply chain disruptions and resilience
- Interactions between social, economic, and financial networks in a crisis
- Payment system stress and innovations

Financial Stability Implications of Uncertainty and Real Shocks
Despite the myriad ways risk can be managed, transferred, and diversified, real shocks can still have major impacts on the financial system. How can the financial system prepare to weather future pandemics given their unpredictable nature and timing? What are the proper tradeoffs between mitigating or preventing the shock and reducing economic output and future growth? How do such large risks interact with each other and with the possibility of an internally generated financial crisis?
- Financial consequences of COVID-19
- Hurricanes, earthquakes, wildfires, tornadoes, and floods: implications of natural disasters for lenders and insurers
- War, terrorism, and cybersecurity
- Supply chains
- Financial links between the real and financial sectors
- Prevention, mitigation, and resilience costs and benefits

SCIENTIFIC COMMITTEE:
Agostino Capponi, Columbia University
Itamar Drechsler, Wharton School of the University of Pennsylvania
Michael Gofman, Simon School of Business at the University of Rochester
Itay Goldstein, Wharton School of the University of Pennsylvania
Victoria Ivashina, Harvard Business School
Anton Korinek, University of Virginia Darden School of Business
Philipp Schnabl, New York University Leonard N. Stern School of Business

PAPER SUBMISSION PROCEDURE: The deadline for submissions is June 30, 2020. Please submit complete papers through Conference Maker at 2020 Financial Stability Conference. Notification of acceptance will be provided by September 15, 2020. Completed conference papers are due on November 1, 2020. Questions about the call for papers or the conference should be directed to Joseph Haubrich at jhaubrich@clev.frb.org