In the aftermath of the 2008 financial crisis, much of the blame for the near collapse of the global financial system fell on the shoulders of the world’s central banks. As a result, the demand for central bankers with an expertise in mitigating the risks inherent in these systems skyrocketed.
This year, the Yale School of Management launched a new year-long Masters of Management degree in systemic risk, signalling the school’s growing commitment to meeting this demand.
SOM took its first step in furthering the conversation on global financial stability and risk management in 2013 with the launch of its Program on Financial Stability. Consisting of various events and ongoing projects, YPFS focuses on financial crisis intervention and systemic risk regulation. Building on the program, the new masters degree centers on macroprudential policy, financial crisis management and global financial regulation.
“The MMS degree in systemic risk is central to Yale SOM’s mission,” Acting SOM Dean Anjani Jain said. “The curriculum draws directly on the work and scholarship undertaken by our faculty under the Yale Program on Financial Stability. By educating early and mid-career employees of central banks and financial regulatory agencies around the world, it delivers the knowledge directly to professionals on the front lines of financial crisis management and policy.”
There are six students from a diverse array of backgrounds enrolled in the degree program’s inaugural class. Together, they represent the central banks of Mexico, the Dominican Republic, Turkey and Indonesia, as well as the Board of Governors of the U.S. Federal Reserve System.
According to Andrew Metrick, professor of finance and management and director of the Yale Program on Financial Stability, the admissions process for the program favors candidates with experience in central banking and a desire to return to their employers with the intention of assuming a role related to financial stability.
These students have the opportunity to enroll in courses taught by an all-star cast of academics and practitioners. The cornerstone of the curriculum is “The Global Financial Crisis” taught by Metrick and former U.S. Secretary of the Treasury Timothy Geithner. Students also take a course in Macroprudential Policy, taught by Sigridur Benediktsdottir, former director of the Financial Stability Department at the Central Bank of Iceland.
In addition, a year-long colloquium focusing on Systemic Risk draws speakers from all corners of the world and various backgrounds to prepare students for international job postings.
The program is a slight departure from the typical MBA program in that it produces a specialized kind of professional, Metrick said. Whereas business schools have traditionally focused almost exclusively on their MBA programs, SOM experiments with smaller, specialized programs, alongside the classic MBA,” he added.
Instituting more programs with a specialist bent, Metrick said, will benefit SOM in the same way that a company benefits from a hearty mix of generalists and specialists. Over time, Metrick hopes that more programs will emerge under the MMS umbrella, such as big data and behavioral economics.
According to the SOM website, the new masters degree is the “first of its kind.” Metrick explained that the previous lack of such programs across higher education was a product of a misunderstanding of the nature of systemic risk. Leaders of financial institutions in developed countries thought of financial crises as “tropical diseases,” assuming that they would only affect poorer countries, he said. But the 2008 financial crisis reversed this belief, prompting a more sustained inquiry into the discipline of systemic risk management.
Adit Taruna, a student in the new program who is sponsored by the Central Bank of Indonesia, praised the program’s rigor and scope, saying that it allowed him to gain a deeper understanding of the events that led up to the financial crisis.
“In Indonesia we didn’t exactly feel the impact of the financial crisis,” Taruna said. “But now we are learning to mitigate the effects of a crisis like this in our own countries.”
Another student in the program, Marcos Noyola, who is sponsored by the central bank of the Dominican Republic, raised the concern that the program was often too U.S.-centric, a worry echoed by Metrick. However, both Noyola and Metrick said the colloquium works to address this concern by familiarizing students with various global perspectives.
The Yale School of Management was founded in 1976.
Daniel Dager | firstname.lastname@example.org
Correction, Nov. 16: A previous version of this story misspelled Adit Taruna’s first name.