Prof. Simon Johnson writes for The Los Angeles Times about the Federal Reserve’s decision to raise interest rates despite the recent instability in the banking sector. “Increasing the deposit insurance cap and focusing on small-business transaction accounts could stabilize midsize banks, reduce more deposit transfers out of those institutions, and shore up confidence in the banking system,” writes Johnson.
Prof. Simon Johnson speaks with Boston Globe reporter Kara Miller about the safety of the U.S. banking system. “Johnson argues that more oversight and regulation are critical to making sure the banking system operates smoothly, even though increased regulations might provoke resistance,” writes Miller.
Prof. Simon Johnson writes for The Los Angeles Times about the impact of government support during a financial crisis. “The immediate banking crisis may have been tempered, but it isn’t over,” writes Johnson. “As concerns about moral hazard rise again in Europe, will European regulators succumb to the temptation to make an example of some bank or other? One thing is certain: What they do will have global consequences, including for the U.S., and we will need to be prepared for them.”
MIT Legatum Center Executive Director Dina Sherif and Pia Sawhney write for CNBC about how the Silicon Valley Bank collapse will impact various companies, communities, and innovation ecosystems. “The immediate banking crisis is over,” writes Sherif. “Now it’s time to rebuild a new system for financing innovation to meet today’s needs.”
Writing for The Los Angeles Times, Prof. Simon Johnson outlines how regulation and supervision of the banking industry should be strengthened following the collapse of Silicon Valley Bank. “A well-regulated system is still the right goal,” writes Johnson. “The Federal Reserve needs to overhaul and improve its bank supervision — and to make that consistent with its macroeconomic policy for interest rates.”
André Bernardes MBA ’19, Bruno Lucas MBA ’19 and Ludmila Pontremolez co-founded Zippi, a payment platform created to provide “affordable and accessible financial services to the 30 million micro entrepreneurs in Brazil,” reports Aparna Dhinakaran for Forbes.
A new study co-authored by Prof. S.P. Kothari “analyzes the stock returns of thousands of companies from 1988-2020, comparing those that repurchased shares against firms that didn’t, adjusting for their size and other factors,” reports Jason Zweig for The Wall Street Journal. “We don’t see massive misuse as some people allege,” says Kothari. “This isn’t a rigged game where CEOs are lining their pockets.”
Research fellow Michael Schrage speaks with Fortune reporter Sheryl Estrada about how generative A.I. will impact finance. “I think, increasingly, we’re going to be seeing generative A.I. used for financial forecasts and scenario generation,” says Schrage.
Wall Street Journal reporter David Wainer spotlights a 2021 study conducted Prof. Andrew Lo and his colleagues that investigated “what happened to innovation when drug companies were no longer able to resort to one of their favorite tactics: paying generic makers to stay off the market.”
Alumna Geeta Sankappanavar founded Akira Impact, an investment firm that directs capital to support the UN Sustainable Development Goals, reports Cheryl Robinson for Forbes. “The firm invests in companies that support gender equality, clean water and sanitation, clean energy and responsible consumption and production,” writes Robinson.
Prof. Diana Henderson, Prof. Daniel Jackson, Prof. David Kaiser, Prof. S.P Kothari, and Prof. Sanjay Sarma have released a new white paper “summarizing their ideas for a new type of undergraduate institution,” writes David Rosowsky for Forbes. “The authors have done a commendable job identifying and assembling some of the proven high-impact practices each of these types of higher educational institutions can offer,” writes Rosowsky.
At MIT’s AI Policy Forum Summit, which was focused on exploring the challenges facing the implementation of AI technologies across a variety of sectors, SEC Chair Gary Gensler and MIT Schwarzman College of Computing Dean Daniel Huttenlocher discussed the impact of AI on the world of finance. “If someone is relying on open-AI, that's a concentrated risk and a lot of fintech companies can build on top of it,” Gensler said. “Then you have a node that's every bit as systemically relevant as maybe a stock exchange."
Prof. Jonathan Parker and other researchers have found that Covid-19 relief payments have served as a form of insurance for families, reports Howard Schneider for Reuters. Although, “’the small short-term spending response and its pattern suggest that the (economic-impact payments) went to many people who did not need the additional funds,’” writes Schneider.
Prof. Andrew Lo speaks with Forbes contributor Russell Flannery about his work using finance to help lower the cost of drug development for cancer treatment and therapies. “I started thinking about how we could use finance pro-actively to lower the cost of drug development, increase success rates, and make it more attractive for investors,” says Lo. “Because that's really what the issue is: you need investors to come into the space to spend their billions of dollars in order to get these drugs developed.”
Francis Plaza ’13 co-founded PayMongo, a fintech firm designed to digitalize the Philippine’s cash-based economy, reports Catherine Wang for Forbes. “PayMongo now not only plans to expand beyond the Philippines to other Southeast Asian countries, but also to broaden its remit by becoming a platform for scaling small business in the region,” writes Wang.