Volcker Alliance Convenes Discussion on Systemic Risk in Financial Markets

On Friday, November 13th, the Volcker Alliance hosted a high-level roundtable discussion in New York City with a group of experts in finance and financial regulation. The meeting was the first in a series planned by the Alliance as part of its comprehensive study of sources of potential systemic instability in the financial markets.

The discussion was wide-ranging, touching on the need to reform the securitization market, the risk of runs in the short-term funding markets, the growth and concentration of the asset management industry, and challenges in data collection and standardization. 

Gaurav Vasisht, Director of the Alliance’s Financial Regulation program, said that these types of conversations are critical to shaping the Alliance’s understanding of the functioning and interconnectedness of the markets, particularly in its less regulated and unregulated corners, and to developing effective suggestions to improve the structure of federal financial regulation and the implementation of regulatory policy.

He commented on the challenges facing regulators: “The markets are increasingly complex, fragmented, and opaque. Regulators involved in promoting financial stability face a challenge that is growing rapidly, but their mandates, tools, and resources don’t seem to be keeping pace with the rate of change in the markets. The structure of the regulatory system itself presents an obstacle to protecting the public from another financial crisis.”