Stanford Professor Emeritus Darrell Duffie, a former chair of the Financial Stability Board group that guided the transition away from LIBOR, argues that cyber risk may be underappreciated: citing New York Fed research, he says a successful attack on just one or two very large U.S. banks could cause major damage to the entire financial system. On fiscal policy, he notes that U.S. debt already exceeds 100% of GDP, yet the country still has substantial fiscal space, since Japan, with double the U.S. debt-to-GDP ratio, has not failed. He explains that a classic debt crisis would show up as sharply rising yields, failed auctions and intense political anxiety over deficits, and that investor confidence can make such a crisis self-fulfilling, though he considers these scenarios still far off.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: The Future of Finance : An Interview with Stanford Professor Darrell Duffie
Read the original on stanfordreview.org ↗
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