Interest Rate Variability and the Financial Sector

Posted On June 22, 2023

October 19, 2023 - October 20, 2023

Georgia State University, Atlanta, GA

Register to attend  | Preliminary Program 

General Information

The Center for Financial Innovation and Stability (Federal Reserve Bank of Atlanta) and the Center for the Economic Analysis of Risk (Georgia State University) are organizing a workshop on Interest rate variability and the financial sector. We will hold the conference in person at Georgia State University on October 19–20, 2023. The workshop's goal is to bring together economists, finance and risk management professionals, and regulators to discuss the effects of interest rates on financial innovation on the stability of the financial system.

The U.S. financial sector experienced a long secular decline in interest rates from the 1980s to the 2007–2008 crisis. The drop in rates culminated in a decade of short-term rates stuck at the effective lower bound in virtually all advanced economies, with significant effects on the financial sector. In the banking sector, low interest rates may have led banks to take more risk, while depositors may have become less sensitive to deposit rates. In the broader financial sector, low interest rates may have boosted investment in potentially high-return innovation, including financial innovation; and may have encouraged some traditional firms to increase their leverage. The sharp increases in inflation after the Covid-19 pandemic led many central banks to substantially raise interest rates. Interest rate hikes have had a variety of effects, including capital losses on risky assets and a broad rise in funding costs.

This workshop will look backward at how a decade of low interest rates encouraged increased risk-taking in the financial system and the implications for financial stability and the real sector. It will also look forward to how the financial sector is responding to higher interest rates.

Paper/panel discussion submissions

We invite academics, professionals, and regulators to submit papers and/or ideas for panel discussions for this workshop. Long abstracts or, preferably, complete manuscripts may be submitted no later than July 14, 2023 on the full range of issues associated with interest rate variability and the financial sector, including the effects of the extended period of low rates and/or of the recent large increase in interest rates on:

  • The behavior of financial intermediaries and their customers.
  • The high-tech innovation ecosphere, especially as it relates to financial innovation.
  • Financial markets.
  • Nonfinancial borrowers (retail, corporate and governmental).
  • Appropriate micro- and/or macro-prudential policies to deal with interest rate variability.

Authors are invited to submit full papers or long abstracts, through the button at the top of the page or by following this link: https://gsu.qualtrics.com/jfe/form/SV_20tq4jxDgt535NY

The results of the selection process will be sent by mid-August, 2023. Reasonable travel and accommodation expenses will be covered for the presenters of accepted papers. Please email Larry Wall at [email protected] or Camelia Minoiu at [email protected] with inquiries.

Registration

There is no fee for attending the conference, but registration is required by October 13th. You may register at: https://gsu.qualtrics.com/jfe/form/SV_6EfFAHOLFIMrzOS.