- Evaluation and Management of Government Financial Institutions: Governments are the world’s largest financial institutions. Viewed from that perspective, the fundamental questions that private financial institutions must answer are equally pertinent to governments: What is the cost of capital? How should financial activities be accounted for? Are government financial institutions well-managed, and do managers have the right incentives? Are its financial products well designed? How should governments manage risk? A priority of this program is to sponsor research that will provide objective and fact-based answers to such questions and disseminate the findings to the policy community.
- Regulation of Financial Markets and Institutions: Financial markets and institutions have become technologically complex and greatly interconnected. However, in some cases, their regulation and oversight are still based on the principles and practices of the distant past. An objective of this program is to bring together academic, regulatory, and industry perspectives to help policymakers make more informed policy decisions.
- Measurement and Management of Risk: Managing risk is at the core of any financial institution, whether public or private, and measuring its size and impact is an increasingly critical topic for market participants, regulators, and academics alike. Understanding the risks of institutions and markets through the use of quantitative tools is imperative for informed regulation of the financial marketplace and for the measurement and, ultimately, management of potential threats to financial stability. What are the best frameworks for assessing and managing risk? How can we develop risk analytics that provide greater transparency of risk exposures in the global financial system?
A primary goal of the GCFP is to provide greater access to the tools of modern financial analysis to current and future regulators, policymakers, and other public-sector stakeholders. GCFP educational initiatives are directed at developing:
- Curricular materials customized to the needs of policy makers
- Free online courseware
- Executive education programs for public-sector managers and regulators
- MIT courses on financial policy issues
- Action learning opportunities for Master’s students through partnerships with public and regulatory agencies
- Advanced training for Master’s and Ph.D. students interested in financial research with a policy focus