The Yale Law Center for the Study of Corporate Law presents:
The 2014-2015 Judge Ralph K. Winter Lecture on Corporate Law and Governance.
Jeremy C. Stein, Professor of Economics, Harvard University: “The Federal Reserve’s Balance Sheet and its Financial Stability Objectives.”
Jeremy C. Stein, Moise Y. Safra Professor of Economics at Harvard University and former member of the Board of Governors of the Federal Reserve System, will deliver the 2014–15 Judge Ralph K. Winter Lecture on Corporate Law and Governance on Monday, April 13, 2015, at 4:30 pm at Yale Law School in the Faculty Lounge.
In his lecture, titled “The Federal Reserve’s Balance Sheet and Its Financial Stability Objectives,” Stein will discuss how the Fed’s management of its balance sheet has implications not only for the conduct of monetary policy but also for financial stability. As a result of the financial crisis, new regulations have been put into place to limit maturity transformation, “i.e., too much funding of long-term assets with short-term borrowing,” Stein says. But he believes that maturity transformation has incentives that have been overlooked.
“One way for the government to mitigate the problem, and to take some of the burden off of regulation, is by being more willing to supply safe short-term claims,” says Stein. “The Fed’s reverse repurchase (RRP) facility represents one promising method for doing so, and as such can be seen as a financial-stability tool in addition to a device for simply implementing interest-rate changes.”
Before coming to Harvard in 2000, Stein was on the finance faculty of M.I.T.’s Sloan School of Management. Prior to that, he was on the finance faculty at the Harvard Business School. He received his A.B. in economics from Princeton University and his Ph.D. in economics from M.I.T.
The Winter Lecture is sponsored by the Dean’s Office and the Yale Law School Center for the Study of Corporate Law. The Judge Ralph K. Winter Lectureship on Corporate Law and Governance was established by former law clerks and students of Judge Winter to support lectures on corporate law and governance and related topics.
The aftereffects of the global financial crisis and the Federal Reserve’s extraordinary response in which it expanded its balance sheet from approximately $500 billion at the start of the financial crisis to a projected peak of $4.2 trillion later this year, will be felt throughout the economy for years to come. Professor Stein’s lecture on this critical policy issue of the day is especially timely for just as the Fed has completed its program of quantitative easing, the European Union has initiated such a program and China might do so as well. I very much hope to see you there.
Refreshments will be provided. Please rsvp to Marianne.dietz@yale.edu, so that we can arrange for the appropriate accommodations.