Abstract

The choices we make in advance of the next financial crisis will have a major impact in determining the magnitude of the economic damage. Our vulnerability to crisis depends on the strength of the protections we build into the financial system through prudential regulation, as well as on the degrees of freedom we create for ourselves to respond to the unanticipated, and the knowledge and experience we bring in managing crises. Is the financial system safer today? With the reforms now in place and with the memory of the crisis still fresh, how confident should we feel about the resilience of the financial system and our ability to protect the US economy from a major financial crisis? Warburg Pincus President and former US Secretary of the Treasury Timothy Geithner attempts to answer these questions in his October 2016 Per Jacobsson Lecture.

The Per Jacobson Lecture

Are We Safer? The Case for Strengthening the Bagehot Arsenal

Timothy F. Geithner

Washington, D.C.

Saturday, October 8, 2016

Per Jacobsson Foundation

Are We Safer? The Case for Strengthening the Bagehot Arsenal

Timothy F. Geithner

Per Jacobsson Foundation 2016

ISSN 0252-3108

Editor: Michael Harrup

Cover Design and Production: IMF Multimedia Services

Composition: Apex CoVantage

The Per Jacobsson lectures are available on the Internet at www.perjacobsson.org, which also includes further information on the Foundation. Copies of the Per Jacobsson lectures may be acquired without charge from the Secretary.

Contents

  • Foreword

  • Opening Remarks

    Guillermo Ortiz

  • Are We Safer? The Case for Strengthening the Bagehot Arsenal

    Timothy F. Geithner

  • Biography

  • The Per Jacobsson Lectures

  • The Per Jacobsson Foundation

Foreword

The second of the two 2016 Per Jacobsson Lectures, “Are We Safer? The Case for Strengthening the Bagehot Arsenal,” was delivered by Warburg Pincus President Timothy F. Geithner, former Secretary of the U.S. Treasury and President of the New York Federal Reserve, on Saturday, October 8, in the atrium of the IMF Headquarters 1 Building. The lecture was presented as part of the 2016 Annual Meetings of the International Monetary Fund and World Bank Group. It was introduced by the Chairman of the Foundation’s Board of Directors, Guillermo Ortiz.

The Per Jacobsson Foundation was established in 1964 to commemorate the work of Per Jacobsson (1894–1963) as a statesman in international monetary affairs. Per Jacobsson was the third Managing Director of the International Monetary Fund (1956–63) and had earlier served as the Economic Adviser of the Bank for International Settlements (1931–56). Per Jacobsson Foundation lectures and contributions to symposia are expressions of personal views and intended to be substantial contributions to the field in which Per Jacobsson worked. They are distributed free of charge by the Foundation. Further information about the Foundation may be obtained from the Secretary of the Foundation or may be found on the Foundation’s website (www.perjacobsson.org).

Are We Safer? The Case for Strengthening the Bagehot Arsenal