Opening Remarks and Introduction, Asset Price Bubbles
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ASSET PRICE BUBBLES: IMPLICATIONS FOR MONETARY, REGULATORY AND INTERNATIONAL POLICIES FIFTH ANNUAL INTERNATIONAL BANKING CONFERENCE FEDERAL RESERVE BANK OF CHICAGO Chicago, Illinois .....................................................................April 22, 2002 Opening Remarks and Introduction Good evening, I’m Michael Moskow, President and CEO of the Chicago Fed. First, let me welcome you to this conference on Asset Price Bubbles: Implications for Monetary, Regulatory, and International Policies. We are cosponsoring the conference along with the World Bank Group. This is the fifth in series of annual conferences on contemporary international policy issues. The first conference in the series was held in 1997 and was also cosponsored with the World Bank. That meeting dealt with preventing banking crises and the lessons learned from global bank failures. Other conferences in the series have examined: • The causes of the Asian financial crisis, • The lessons policy makers have learned from dealing with global financial crises, and • Issues in the measurement and management of risk in both the private and public sectors and implications for macroeconomic stabilization policy. Cosponsors of these conferences have included: • The International Monetary Fund, • The Bank for International Settlements, and Michael Moskow Speeches 2002 31 • The Journal of Banking and Finance. Let me say that it is indeed a pleasure once again to be working with a partner like the World Bank Group. As is clear from this brief description of past conferences in this series, our attention has been rather sharply focused on various aspects of financial crises. And this year’s symposium on Asset Price Bubbles continues in that tradition. This is because, during the last two decades, there have been instances throughout the developed and devel- oping worlds of prolonged build-ups and sharp collapses in asset prices in stock, housing and foreign exchange markets. Such volatility has sparked an intense debate in academic and policy circles regarding the appropriate mon- etary, regulatory, and international policy responses to these dramatic shifts. Over the next two days, our presenters and discussants will explore the evidence that relates asset price bub- bles to financial instability. They also will discuss what role, if any, central bankers and other policy makers should play in attempting to prevent systemic financial crises. We have a very impressive audience attending the conference - more than 40 countries are represented, including approximately 30 official foreign institutions. We’re very happy that all of you could join us. As you know, this conference was originally scheduled for October of last year, but was postponed as a result of the tragic events of September 11. The wonderful turnout to this rescheduled meeting is a testament to the importance of the topic and quali- ty of the presenters and discussants on the program. Let me take a moment to thank the conference organizers for putting together such an outstanding program: • Curt Hunter of the Chicago Fed, • George Kaufman of Loyola University and a consultant here at the Chicago Fed, and • Michael Pomerleano of the World Bank Group. I also want to acknowledge the assistance provided by Loretta Ardaugh, Shirley Harris and Ella Dukes of our Research Department and Colleen Mascenik of the World Bank Group, and to thank in advance our confer- ence planning and food service staffs. Now I’d like to turn the meeting over to Cesare Calari from the World Bank Group, who will also welcome you. 32 Michael Moskow Speeches 2002 [After dinner] Now, it’s my great pleasure to introduce tonight’s keynote speaker, Randall Kroszner. Randy is a member of President Bush’s Council of Economic Advisers. After being nominated by the President, the United States Senate confirmed his appointment on November 28, 2001. To serve on the council, Randy is on leave from the University of Chicago’s Graduate School of Business, where he is professor of economics. While at the U of C, he worked closely with our research department at the Chicago Fed. He also is on leave from his positions as editor of the Journal of Law and Economics and associate director of the George J. Stigler Center for the Study of the Economy and the State. He has served as a consultant to many well-known organizations including: • The International Monetary Fund, • The World Bank, • The Inter-American Development Bank, • The Swedish Finance Ministry, • The Federal Reserve Bank of Chicago, • The Board of Governors of the Federal Reserve System, and • Deutsche Bank. He has been a visiting professor at the Stockholm School of Economics, the Institute for International Economic Studies at the University of Stockholm and the Free University of Berlin. Randy is a faculty research fellow of the National Bureau of Economic Research. His research interests include the economics and politics of international and domestic banking and financial regulation, bond markets and debt restructuring, monetary economics and antitrust. His more than 50 articles have appeared in many scholarly journals, including the American Economic Review and the Journal of Political Economy. They also appear in books such as The New Palgrave Dictionary of Money and Finance. Randy received his undergraduate degree from Brown University and his Ph.D. from the economics depart- ment of Harvard University. Please join me in welcoming Randy Kroszner. Michael Moskow Speeches 2002 33.