Financial Market Frictions and Systemic Risks
To promote research on financial frictions, market performance, and systemic risks, the National Bureau of Economic Research (NBER), with the support of the Office of Financial Research (OFR) at the US Department of the Treasury and the National Science Foundation (NSF), will host a research conference on Friday, March 28, 2025 in Cambridge, MA.
This conference is part of a multi-year initiative on these issues that is led by NBER affiliates Wenxin Du of Harvard Business School, Alp Simsek of Yale University, and Chester Spatt of Carnegie Mellon University. The initiative strives to bring together researchers in various subfields of economics and financial economics to study funding structures, capital market frictions, operational and financial linkages across markets, financial stability, and the determinants, detection, and remediation of systemic risk. It also seeks to promote knowledge about potential sources of data that might be used to address these questions, and to advance interactions between researchers, policy-makers, practitioners, and regulators, with the goal of identifying and addressing research questions that bear on public policy.
The conference will address a range of research topics, including but not limited to:
* The impacts of market innovations on securities trading and the responses of market participants and financial institutions to these developments.
* The links between availability of collateral, maturity transformation, and liquidity management to aggregate market conditions.
* The impacts of monetary policy and regulatory actions on capital markets, particularly regarding liquidity, short-term funding markets, and systemic risk.
* The role of market microstructure, trading processes, and incentives of market participants on transaction volume, price determination, and market stability.
* Historical as well as prospective and non-traditional sources of systemic risk to financial market infrastructure, including but not limited to cyber-attacks and other forms of operational risks, and the potential impact of these risk factors on trading behavior and market stability.
* The determinants and consequences of market inter-connectedness on aggregate market risk and on the performance of markets during times of stress.
* The effects of disintermediation in amplifying or dampening financial instabilities and propagating financial shocks to the real economy, as well as their implications for macroprudential policy.
* The financial risks associated with liquidity transformation, such as trading in derivative products that offer high liquidity but are tied to underlying assets with limited liquidity.
* The financial risks of emergent distributed ledger and digital asset technologies, with a particular focus on funding in this new sector and the fragility of deposit-like products.
Submissions of both empirical and theoretical research, and of papers and proposals by scholars who are early in their careers, who are not NBER affiliates, and who are from under-represented groups, are welcome. Please do not submit papers that have already been accepted for publication. To be considered for the conference, upload submissions by 11:59pm (ET) on Tuesday, December 10, 2024.
Authors chosen to present papers will be notified in January 2025.
The NBER will cover the cost for up to two presenters per paper to attend the meeting; other co-authors are welcome to attend at their own expense. Questions about this conference may be addressed to tricias@nber.org.