STANFORD GRADUATE SCHOOL OF BUSINESS KNIGHT MANAGEMENT CENTER STANFORD UNIVERSITY 655 KNIGHT WAY STANFORD, CA

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1 STANFORD GRADUATE SCHOOL OF BUSINESS KNIGHT MANAGEMENT CENTER STANFORD UNIVERSITY 655 KNIGHT WAY STANFORD, CA

2 GLOBAL CROSSROADS: NAVIGATING THE WORLD PRESENTS FINANCIAL MARKET ADAPTATION TO REGULATION & MONETARY POLICY

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4 We welcome you to the fourth annual Global Crossroads: Navigating the World conference at Stanford Graduate School of Business. This year s conference assembles leading experts from academia, major financial institutions, institutional investors and asset managers, and regulators to shed light on how financial markets and institutions are adapting to recent changes in financial regulation and the unprecedented duration of easy monetary policy. How are capital, liquidity, and risk intermediated by the financial sector, and how have changes in the intermediation process affected financial market efficiency, returns, and risk-taking behavior? Professor Jeremy Stein of Harvard University, a former governor of the Federal Reserve System, will deliver the keynote address. Professor Stein is one of the world s foremost authorities on financial market stability and monetary policy. His keynote address will provide new insights on the connections between credit markets and the business cycle. During the day, individual sessions will examine monetary policy, mortgage credit markets, shadow-banking credit provision, and bond market liquidity. The format for each session includes time for discussion from the floor. We expect a rich exchange of emerging concepts, evidence, and alternative viewpoints. We encourage your participation in the discussion. Darrell Duffie and Arvind Krishnamurthy Professors of Finance Stanford Graduate School of Business

5 FRIDAY March 20, :15 8:45am REGISTRATION & CONTINENTAL BREAKFAST Knight Management Center 8:45 8:50am WELCOME Garth Saloner, Dean, Stanford Graduate School of Business 8:50 9:00am OPENING REMARKS Darrell Duffie, Professor of Finance, Stanford Graduate School of Business Arvind Krishnamurthy, Professor of Finance, Stanford Graduate School of Business 9:00 10:15am SESSION 1: MONEY MARKETS & MONETARY POLICY Leader: James McAndrews, Executive Vice President, Director of Research, Federal Reserve Bank of New York Philipp Schnabl, Associate Professor of Finance, Stern School of Business, New York University Alex Roever, Managing Director, Head of U.S. Interest Rate Strategy, J.P. Morgan Securities LLC

6 3:00 3:30pm 10:15 10:45am BREAK BREAK 10:45am 12:00pm 3:30 4:45pm SESSION 4: SHADOW CREDIT PROVISION SESSION 2: MORTGAGE CREDIT & LIQUIDITY PROVISION Moderator: Arvind Krishnamurthy, Professor of Finance, Stanford Graduate School of Business Leader: Steve Abrahams, Managing Director, Head of MBS and Securitization Research, Deutsche Bank Securities Nancy Wallace, Professor, UC Berkeley Haas School of Business Gary Gorton, Professor of Finance, Yale School of Management Nellie Liang, Director, Office of Financial Stability Policy and Research, Federal Reserve Board Stuart Davies, Managing Director, Sankaty Advisors Adam Ashcraft, Senior Vice President, Federal Reserve Bank of New York 12:00 1:30pm LUNCH & KEYNOTE SPEAKER Jeremy Stein, Professor of Economics, Harvard University and Former Governor of the Federal Reserve System 1:30 3:00pm SESSION 3: BOND MARKET LIQUIDITY Moderator: Darrell Duffie, Professor of Finance, Stanford Graduate School of Business Joanne Medero, Managing Director, BlackRock Markus Brunnermeier, Professor of Economics, Princeton University Darryll Hendricks, Chief Operating Officer, Non-Core & Legacy, UBS Lee Olesky, Chief Executive Officer, TradeWeb

7 Steve Abrahams Managing Director, Head of MBS and Securitization Research, Deutsche Bank Securities Steve Abrahams leads the Deutsche Bank Research Division team that provides market analysis and investment advice in residential, commercial, and consumer-securitized products. Abrahams, the founder and former managing director of Citadel Capital Advisors, had almost 20 years of securitization research and portfolio management experience before joining Deutsche Bank in Adam Ashcraft Senior Vice President, Federal Reserve Bank of New York Adam Ashcraft focuses on the effects of bank capital requirements, monetary policy, and labor market issues. His research has included empirical study of the role of firm and bank creditworthiness, the impact of tougher capital requirements on bank capital and lending, the effect of bank failure and resolution on real economic activity, the effect of creditworthiness on the ability of banks to borrow in the federal funds market, and the impact of the credit derivatives market on the cost of debt capital and efficiency of the equity market. Markus Brunnermeier Edwards S. Sanford Professor of Economics, Princeton University Markus Brunnermeier is director of Princeton s Bendheim Center for Finance. His research focuses on financial markets and monetary and macro-economy, with special emphasis on bubbles, liquidity, and financial and monetary price stability. His models incorporate frictions as well as behavioral elements. He is a recipient of the Bernácer Prize granted for outstanding contributions in the fields of macroeconomics and finance.

8 Stuart Davies Managing Director, Sankaty Advisors Stuart Davies is a managing director, a credit committee member, and the chief investment officer of Sankaty s Opportunistic Credit business. He serves as the portfolio manager for the Sankaty Credit Opportunities funds and Sankaty s separate accounts in opportunistic credit. Prior to his current role, he was responsible for investments in the metals and mining sectors and ran Sankaty s Middle Market Group from 1999 to Previously, Davies worked for Prudential Capital Group, where he originated and managed a portfolio of private placement investments. Davies received an MBA from the MIT Sloan School of Management and a BA from Yale University. Davies is a Chartered Financial Analyst charterholder. Darrell Duffie Dean Witter Distinguished Professor of Finance, Stanford Graduate School of Business Darrell Duffie is a member of the Financial Advisory Roundtable of the Federal Reserve Bank of New York, a Fellow and member of the Council of the Econometric Society, a Research Fellow of the National Bureau of Economic Research, a Fellow of the American Academy of Arts and Sciences, and a member of the board of directors of Moody s Corporation since He was the 2009 president of the American Finance Association. In , he chaired the Market Participants Group, charged by the Financial Stability Board with recommending reforms to Libor, Euribor, and other interest-rate benchmarks. His recent books include How Big Banks Fail, Measuring Corporate Default Risk, and Dark Markets. Gary Gorton Frederick Frank Class of 1954 Professor of Management and Finance, Yale School of Management Gary Gorton has done both theoretical and empirical research in many areas of finance. His research has focused on the role of stock markets and banks, arbitrage pricing, commodity futures, bank capital, bank production of liquidity, loan sales, securitization, bank loan pricing, and bank regulation. He also works on corporate control issues and asset pricing theory, including models of asset price bubbles and game theoretic models of trading and asset pricing. Darryll Hendricks Chief Operating Officer, Non-Core & Legacy, UBS Darryll Hendricks is chief operating officer for the Non-Core & Legacy division of UBS, which manages assets and derivative positions that are no longer part of the core business of the UBS Investment Bank. His responsibilities include the development and monitoring of wind-down strategies and plans for this portfolio. Previously, he was head of strategy and regulatory reform for UBS Investment Bank and held various positions in the risk control area, including global head of risk methodology. Before joining UBS in 2005, Hendricks worked at the Federal Reserve Bank of New York for 13 years, where he focused on OTC derivatives, capital regulation, and clearing and settlement risks. Hendricks has a PhD from Harvard University.

9 Arvind Krishnamurthy Professor of Finance, Stanford Graduate School of Business Arvind Krishnamurthy s research interests include financial intermediation, debt markets, housing markets, financial crises, monetary policy, and financial regulation. He has studied international financial crises in emerging markets. He also has studied liquidity in U.S. debt markets and the role of the Federal Reserve during a liquidity crisis. Recently, Krishnamurthy has examined unconventional monetary policy, including the effects of quantitative easing on financial markets and the macroeconomy. Nellie Liang Director, Office of Financial Stability Policy and Research, Federal Reserve Board Nellie Liang is the director of the Office of Financial Stability Policy and Research (OFS) at the Federal Reserve Board. OFS is responsible for conducting and coordinating work at the board relating to analyzing emerging and structural risks to financial stability and developing macroprudential policies to mitigate systemic risks. Liang s recent research has focused on fragilities in short-term funding markets, effect of creditor rights on real economic activity, and the cost of equity capital and corporate payout policies. Her research has been published in The Journal of Finance, Journal of Financial Economics, Journal of Financial and Quantitative Analysis, and Journal of Public Economics, among other publications. She received her PhD in economics from the University of Maryland. James McAndrews Executive Vice President, Director of Research, Federal Reserve Bank of New York James McAndrews is responsible for briefings for the bank president s participation in Federal Open Market Committee meetings and for the economic and financial policy analysis prepared by the research group. He has played a prominent role in the New York Fed s financial stability efforts, including contributing to the design of several liquidity facilities during the financial crisis. His main research area is the economics of money and payments, and he has written extensively on topics in monetary policy implementation, the liquidity of banks and markets, and monetary arrangements in U.S. history. Joanne Medero Managing Director, BlackRock Joanne Medero s service with BlackRock dates back to 1996, including her years with Barclays Global Investors (BGI), which merged with BlackRock in She joined BGI as its Global General Counsel and after more than 10 years in that role, became the global head of Government Relations and Public Policy for Barclays investment banking and investment management businesses. Prior to joining BGI, Medero was a partner with Orrick, Herrington and Sutcliffe in their New York office, specializing in derivatives and market regulation issues. She also served as general counsel of the Commodity Futures Trading Commission from 1989 to 1993 and as an associate director for legal and financial affairs at the Office of Presidential Personnel, The White House, from 1986 to 1989.

10 Lee Olesky Chief Executive Officer, Tradeweb Lee Olesky is the chief executive officer and cofounder of Tradeweb. He has more than 25 years of experience in managing both investment banking and financial technology companies. Prior to joining Tradeweb, he was chief executive officer and founder of BrokerTec, a successful electronic brokerage platform. Previously, he worked at Credit Suisse First Boston in a variety of management positions, most recently as chief operating officer for the Fixed Income Americas division. Olesky is a member of the CFTC s Technology Advisory Committee and has been named one of the Top Global Executives and Innovators in Financial Technology by Institutional Investor for each of the last six years. Alex Roever Managing Director, Head of U.S. Interest Rate Strategy, J.P. Morgan Securities LLC Alex Roever is head of U.S. Interest Rate Strategy for J.P. Morgan Securities. He leads a team of strategists covering U.S. treasuries, agencies, and other interest rate-sensitive products. He also leads J.P. Morgan s Short-Term Fixed Income Strategy team, which covers interest rate and credit markets from overnight to three-years. Additionally, he coordinates research on emerging financial regulations and their impact on U.S. fixed income markets. Roever earned an MBA from Emory University, an MA in economics from Georgia State University, and a BA from Vanderbilt University. He is a CFA charterholder. Garth Saloner Philip H. Knight Professor and Dean, Stanford Graduate School of Business Garth Saloner has been dean of Stanford Graduate School of Business since 2009 and has been a Stanford faculty member since He has taught management, strategy, entrepreneurship, and e-commerce courses and is a two-time recipient (1993, 2008) of the GSB s Distinguished Teaching Award. In 2006, Saloner led the Curriculum Review Committee that restructured the MBA program. In 2011, he led the effort to establish the Stanford Institute for Innovation in Developing Economies to improve the lives of people in poverty on a massive scale. Saloner is a native of South Africa. From 1978 to 1982, he earned three degrees from Stanford University including a PhD in economics, business, and public policy. Philipp Schnabl Associate Professor of Finance, Stern School of Business, New York University Philipp Schnabl studies financial intermediation, central banking, and corporate finance. His work has been published in leading academic journals, including The Quarterly Journal of Economics, The Review of Economic Studies, and The Journal of Finance. His work has received several awards, including the 2012 Brattle Prize for the best paper in corporate finance published in The Journal of Finance. He earned his PhD and MA from Harvard University and his BA from Vienna University of Economics and Business Administration.

11 Jeremy Stein Moise Y. Safra Professor of Economics, Harvard University Jeremy Stein resigned from the Board of Governors of the Federal Reserve System in 2014 to return to Harvard. During his time at the Fed he served on the Committee on Bank Supervision and Regulation and as co-chair of the Financial Stability Board s official sector steering group on reforming interest rate benchmarks. Stein s research has covered such topics as behavioral finance and stock market efficiency, corporate investment and financing decisions, risk management, capital allocation inside firms, banking, financial regulation, and monetary policy. Nancy Wallace Lisle and Roslyn Payne Chair in Real Estate Capital Markets Professor, Haas School of Business, University of California, Berkeley Nancy Wallace is chair of the Haas Real Estate Group and co-chair of the Fisher Center for Real Estate. Her research interests include housing price indices and models to monitor residential real estate price movements over the business cycle; mortgage prepayment and pricing models, mortgage contract design, and the market microstructure of mortgagebacked security trading; option pricing models for pricing commercial and retail real estate leases for use in the commercial mortgage-backed securities markets; and executive stock option valuation.

12 STANFORD GRADUATE SCHOOL OF BUSINESS Stanford Graduate School of Business (GSB) aims to change lives, change organizations, and change the world. The mission of Stanford GSB is to create ideas that deepen and advance the understanding of business and management. These ideas help develop innovative, principled, and insightful leaders who create meaningful and impactful change. Located in the heart of Silicon Valley, Stanford GSB has built an international reputation based on its innovative programs. These programs engage the highest quality students with world-class faculty from across Stanford University s seven schools, as well as alumni, Silicon Valley professionals, global executives, and the broader world community. The state-of-the-art Knight Management Center offers flexible classroom spaces for hands-on experiential learning, small-group leadership labs, and team-based learning. It also serves as a convening space for major forums and discussions. Global Crossroads: Navigating the World Series The Global Crossroads series was initiated by Condoleezza Rice, the 66th United States secretary of state and the Denning Professor in Global Business and the Economy at Stanford GSB. Each year, Stanford GSB holds a Global Crossroads conference focusing on a topical phenomenon that has worldwide relevance. The gatherings provide participants with new learnings, new perspectives, and new questions to research.