Hilary J. Allen
Crypto and Financial Crises
Professor Allen will discuss the crypto ecosystem (with a particular emphasis on DeFi), and explain how its fragilities mirror the fragilities of financial innovations developed in the run up to the global financial crisis of 2008. She cautions that crypto innovation will not democratize finance, make finance more efficient, or promote financial inclusion, and argues that – given crypto’s risks – it is therefore bad public policy to support this kind of innovation. In particular, she will emphasize that the integration of crypto into our traditional financial system is likely to make our system highly fragile, and so she argues for a firewall between crypto and traditional finance.
Climate Change and Banking Regulation
Professor Allen will discuss the role that banking regulation can play in protecting the stability of our financial system from the physical and transition risks associated with climate change. She will explain how capital regulation and stress testing can best be adapted, and will also discuss how climate change fits into the broader debate about how to regulate the operational risks faced by banks.
Artificial Intelligence and Financial Risk Management
Professor Allen will explain how financial risk management could be transformed by the application of machine learning technology, and highlight the limitations of that technology (including programming errors, data limitations, automation biases). She will also explore how using machine learning algorithms to automate risk management is likely to increase herd behavior in the financial markets.
Technological Innovation by Government Agencies
Professor Allen will explore the necessity for financial regulatory agencies to develop their own internal scientific and technological expertise, and discuss ways to foster technological innovation by these agencies. She will explain that this is a necessity, not only to make the agencies more efficient, but also to prevent them from being left behind by the industry they regulate.