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IMF Seminars, January 1, 1901

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Bibliographic details

• Published: January 1, 1901

Conference purpose and context

• The International Monetary Fund (IMF), in collaboration with the Institute for New Economic Thinking (INET) and the Deutsche Bundesbank, hosted a two-day conference on financial networks at the IMF’s Headquarters in Washington, D.C. on May 8-9, 2014.
• Motivations and themes:
  • The financial crisis highlighted the need to better understand the role of financial interconnectedness in creating systemic risk and macroeconomic instability.
  • Financial interconnectedness includes direct and indirect exposures from various asset markets and players, including interbank exposures, securities, and state-contingent exposures.
  • Systemic risk can arise through linkages so that failure or distress of one or more entities can generate negative spillovers throughout the financial system and the real sector, domestically and across borders.
  • The global financial crisis prompted an overhaul of the regulatory framework and the development of new models and tools for analyzing interconnectedness and its implications for systemic stability.
  • A fundamental characteristic that makes financial players systemically important is their degree of interconnectedness.

Event logistics and participation

• Dates and times:
  • May 8-9, 2014
  • Conference start: Thursday, May 8 at 9:00 a.m.
  • Conference end: Friday, May 9 at 2:00 p.m. with a high-level panel discussion followed by lunch.
• Venue and access:
  • IMF HQ2 Conference Hall 1, Washington, D.C.
  • Invited attendees are required to present photo identification on entering the IMF at 1900 Pennsylvania Avenue, N.W., Washington D.C.
• Attendance:
  • Conference attendance was by invitation only.
  • Interested parties were instructed to email interconconf@imf.org, with a note that capacity constraints meant not all requests could be accommodated.

Conference structure and agenda highlights

• Overall format:
  • Two full days of presentations, discussant commentaries, and panels, plus a reception/dinner and a closing panel.
• Thursday, May 8, 2014 (selected items):
  • Opening Remarks: Olivier Blanchard (Economic Counsellor and Director, Research Department, IMF)
  • Interconnectedness and Financial Stability: Joseph E. Stiglitz (Columbia University and INET)
  • Session 1: Financial Networks in OTC and Interbank Markets
  • Paper: Trading Partners in the Interbank Lending Market — Authors: Gara Afonso (NY Fed), Anna Kovner* (NY Fed), Antoinette Schoar (MIT); Discussant: Peter Hoffmann (ECB)
  • Session 2: Financial Networks in OTC and Interbank Markets
  • Paper: A Network View on Interbank Liquidity — Authors: Silvia Gabrieli (Banque de France) and Co-Pierre Georg* (Deutsche Bundesbank); Discussant: Robin Lumsdaine (American University)
  • Paper: EffIciency and Stability of a Financial Architecture with Too-Interconnected-to-Fail Institutions — Author: Michael Gofman* (Wisconsin); Discussant: Mila Gemansky Sherman (UMass Amherst)
  • Session 3: Welfare Implications of Financial Networks
  • Paper: Mandatory Disclosure and Financial Contagion — Authors: Fernando Alvarez (Chicago) and Gadi Barlevy* (Chicago Fed); Discussant: Tariq Roukny (Université Libre de Bruxelles)
  • Paper: Intermediation in Networks — Author: Mihai Manea* (MIT); Discussant: Fernando Vega-Redondo (Bocconi)
  • Paper: Bilateral Trading in Networks — Authors: Daniele Condorelli* (Essex) and Andrea Galeotti (Essex); Discussant: Ben Craig (Deutsche Bundesbank)
  • Session 4: Financial Networks and Systemic Risk
  • Paper: Intermediation and Voluntary Exposure to Counterparty Risk — Author: Maryam Farboodi* (Chicago Booth); Discussant: Livio Stracca (ECB)
  • Paper: Financial Networks and Contagion — Authors: Matthew Elliott (Caltech), Benjamin Golub* (Harvard), Matthew O. Jackson (Stanford); Discussant: Benjamin Tabak (Universidade Catolica de Brasilia and Federal Senate)
  • Paper: How Likely is Contagion in Financial Networks? — Authors: Paul Glasserman (Columbia), H. Peyton Young* (Oxford); Discussant: Brenda González-Hermosillo (IMF, Monetary and Capital Markets Department)
  • Reception/Dinner (By invitation, HQ2-02 B-300 G)
• Friday, May 9, 2014 (selected items):
  • Session 5: Interconnectedness in Policy Work
  • Paper: Addressing Interconnectedness: Concepts and Prudential Tools — Authors: Nicolas Arregui, Mohamed Norat, Antonio Pancorbo, Jodi Scarlata (IMF); Presenter: Mohamed Norat (IMF, Monetary and Capital Markets Department)
  • Paper: Sweden and the Global Banking System: Network Links and Vulnerabilities — Presenter: Eugenio Cerutti (IMF, Research Department)
  • Paper: Crisis Transmission in the Global Banking Network — Authors: Galina Hale (San Francisco Fed), Tümer Kapan (Fannie Mae), Camelia Minoiu (IMF, Research Department); Presenter: Camelia Minoiu (IMF, Research Department)
  • Session 6: The Present and Future Role of Financial Networks
  • Paper: The Present and Future Role of Financial Networks — Authors: Stefano Battiston (University of Zürich), Co-Pierre Georg (Deutsche Bundesbank), Joseph E. Stiglitz (Columbia University and INET); Presenter: Stefano Battiston (University of Zürich)
  • Closing Panel (Chair: José Viñals, Financial Counselor and Director, IMF, Monetary and Capital Markets Department)
  • Panelists: Claudia Buch (Halle Institute for Economic Research); Sujit Kapadia (Bank of England); Nellie Liang (Board of Governors of the Federal Reserve System); Patricia Mosser (Office of Financial Research); Sanjay Sharma (RBC Capital Markets)

Research topics, methodological focus, and policy relevance

• Research topics covered:
  • Interbank lending structures and trading relationships.
  • Liquidity networks and interbank liquidity dynamics.
  • Efficiency and stability trade-offs in architectures with highly interconnected institutions.
  • Welfare implications of network structures, including disclosure and contagion.
  • Modeling contagion likelihood and mechanisms in financial networks.
  • Policy tools and prudential approaches to address interconnectedness.
  • Global banking network transmission channels and country-specific vulnerabilities (example: Sweden).
• Methodological focus:
  • Network analysis applied to OTC, interbank, and broader financial markets.
  • The use of theoretical models and empirical evidence to assess channels of shock propagation and systemic importance.
• Policy relevance:
  • Strengthening resilience to spillovers through coordination between academic and policy communities.
  • Informing where more research is needed to support regulatory and supervisory responses to interconnectedness.

Organizers and convenors

• Conference organizers:
  • Stefano Battiston (University of Zürich)
  • Co-Pierre Georg (Deutsche Bundesbank)
  • Brenda Gonzalez-Hermosillo (IMF)
  • Camelia Minoiu (IMF)

Content in this bundle

• Agendapdf (PDF)
• Barlevypdf (PDF)
• Farboodipdf (PDF)
• Gofmanpdf (PDF)
• Swedenpdf (PDF)
• Indexpdf (PDF)
• Wp13199pdf (PDF)
• Orgcharta (PDF)
• Glossarya (PDF)
• Index (PDF)