Overview

On May 29-30, Columbia Business School and the Federal Reserve Bank of New York will cosponsor a conference that brings together scholars and policymakers interested in the theoretical and applied aspects of money markets, including cross-country comparative analysis. Especially welcomed are papers that investigate the potential effect on money markets if the Federal Reserve begins paying interest on bank reserves in 2011.

Money markets are integral to the financial infrastructure of industrial countries and are among the largest financial markets in the world. These markets, which serve as channels for the execution and transmission of monetary policy and as trading venues for the shortest-term instruments, anchor the entire term structure of interest rates. Money markets are central to the allocation of capital, the efficient distribution of liquidity among financial institutions, and the hedging of short-term risks. The markets also play an important role in the credit evaluation process and in the the large-value payments systems where trades are settled.

Registration and Breakfast

9:00 a.m. 

Opening Remarks
Timothy F. Geithner, President,
Federal Reserve Bank of New York

9:15 a.m.

Session 1: The Money Market and Monetary Policy

The Role of Interbank Markets in Monetary Policy: A Model with Rationing

Authors:
Xavier Freixas, Universitat Pompeu Fabra
José Jorge, Universidade do Porto

Discussant:
Vish Viswanathan, Duke University

The Impact of Reserves Averaging on Banks' Liquidity Management

Authors:
Claire Halsall, Bank of England
John Jackson, Bank of England
Ouarda Merrouche, Bank of England

Discussant:
Craig Furfine, Federal Reserve Bank of Chicago and Northwestern University

11:00 a.m.

Coffee Break

Understanding Monetary Policy Implementation

Authors:
Huberto Ennis, Federal Reserve Bank of Richmond
Todd Keister, Federal Reserve Bank of New York

Discussant:
Rafael Repullo, Center for Monetary and Financial Studies and Columbia University

Implementing Monetary Policy with No Reserve Requirements

Authors:
Cornelia Holthausen, European Central Bank
Cyril Monnet, European Central Bank
Fleming Wuertz, European Central Bank

Discussant:
Seth Carpenter, Board of Governors of the Federal Reserve System

1:00 p.m.

Lunch and Keynote Address

Keynote Speaker:
Glenn Hubbard, Columbia University

2:30 p.m.

Session 2: Money Markets, Banking, and Liquidity

Liquidity Risk and Syndicate Structure

Authors:
Evan Gatev, Boston College
Philip Strahan, Boston College

Discussant:
Linda Allen, Zicklin School of Business, Baruch College

Imperfect Competition in the Inter-Bank Market for Liquidity as a Rationale for Central Banking

Authors:
Viral Acharya, London Business School
Denis Gromb, London Business School
Tanju Yorulmazer, Federal Reserve Bank of New York
           
Discussant:
Douglas Gale, New York University

4:30 p.m.        

Coffee Break

The Price of Liquidity: Bank Characteristics and Market Conditions

Authors:        
Falco Fecht, Deutsche Bundesbank
Kjell Nyborg, Norwegian School of Economics and Business Administration
Jörg Rocholl, European School of Management and Technology
                                         
Discussant:
Mark Carey, Board of Governors of the Federal Reserve System

6:15 p.m.  

Dinner (By Invitation)
Keynote Speaker:
Donald Kohn, Board of Governors of the Federal Reserve System

9:00 a.m.

Breakfast

9:15 a.m. 

Session 3: Risk and the Money Market: The 2007-8 Experience

Deciphering the 2007 Liquidity Crunch

Author:
Markus Brunnermeier, Princeton University

Discussant:
Marvin Goodfriend, Carnegie-Mellon University

Lessons from the North Atlantic Financial Crisis

Author:
Willem Buiter, London School of Economics

Discussant:
Stephen Cecchetti, Brandeis University

11:15 a.m.

Coffee Break

Collective Risk Management in a Flight to Quality Episode

Authors:
Ricardo Caballero, MIT
Arvind Krishnamurthy, Northwestern University

Discussant:
Urban Jermann, University of Pennsylvania

Lunch

1:30 p.m.

Panel Discussion: The 2007-8 Money Market Crisis

Discussants:
Richard Berner, Morgan Stanley
Charles Calomiris, Columbia University
Peter Garber, Deutsche Bank
Henry Shilling, Moody’s

3:00 p.m.    

Adjourn