On Thursday and Friday, October 27-28, 2016, the Office of Financial Research and the University of Michigan’s Center on Finance, Law and Policy hosted a joint conference, “Big Data in Finance” in Ann Arbor, Michigan, which brought together a wide range of scholars, regulators, policymakers, and practitioners to explore how big data can be used to enhance financial stability and address other challenges in financial markets. More than 250 people attended from around the United States and abroad. The event drew students, faculty, and staff from ten different University of Michigan schools ranging from public policy to dentistry.
We gratefully acknowledge the financial support of our sponsors: Smith Richardson Foundation, Omiydar Network, the Michigan Institute for Data Science (MIDAS), the Michigan Ross School of Business, the Michigan College of Engineering and Michigan Law School. VIDEO FOR ALL SESSIONS IS NOW POSTED BELOW, along with the moderators’ notes. To watch, click on the name of the session, which is listed all IN CAPS. Click on the name of the session or the speaker to access.
|Thursday, October 27, 2016|
|8:00 – 8:30 a.m.||Registration and Continental Breakfast|
|8:30 – 8:45 a.m.||WELCOME AND CONFERENCE OVERVIEW
Michael S. Barr, Faculty Director, University of Michigan Center on Finance, Law, and Policy; Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; Professor of Public Policy, University of Michigan Gerald R. Ford School of Public Policy
|8:45 – 9:30 a.m.||KEYNOTE ADDRESS by OFR Director Richard Berner|
|9:30 – 11:00 a.m.||PANEL 1: DATA PRIVACY AND SECURITY (READ MODERATOR NOTE)
As the number and scope of available data sets proliferate, can we help ensure that proprietary data remains private and secure on one hand, and usable and shareable within and among organizations on the other hand? This panel will explore challenges of financial data privacy and security in an increasingly interconnected world.
• Alfred O. Hero (Moderator), John H. Holland Distinguished University Professor and R. Jamison and Betty Williams Professor of Engineering, University of Michigan; Co-Director, Michigan Institute for Data Science (MIDAS)
• John Carlson, Vice-Chair, Financial Services Sector Coordinating Council (FSSCC); Chief of Staff, The Financial Services Information Sharing & Analysis Center (FS-ISAC)
• Jonathan Katz, Professor of Computer Science, University of Maryland; Director, Maryland Cybersecurity Center
• Michael Reitblat, Co-Founder & CEO, Forter, Inc.
• Peter Swire, Nancy J. and Lawrence P. Huang Professor of Law and Ethics, Georgia • Institute of Technology Scheller College of Business
|11:00 – 11:15 a.m.||Break|
|11:15 – 12:45 p.m.||PANEL 2: DATA QUALITY, DATA GAPS, AND INFORMATION ARBITRAGE (READ MODERATOR NOTE)
Private-sector firms, regulators, and academic researchers alike face challenges regarding the reliability and availability of market-wide financial data. Even when reliable data is available, moreover, “stovepipes” within firms and within and among regulatory agencies can create data gaps that inhibit functionality. In addition, some have argued that disclosure obligations may incentivize firms to engage in “information arbitrage” by hiding information or otherwise altering their behavior to avoid reporting obligations. This panel will examine strategies for closing data gaps and obtaining high-quality, reliable, market-wide financial data.
• Amiyatosh Purnanandam (Moderator) Professor of Finance, University of Michigan Ross School of Business
• Linda Avery, Chief Data Officer, Federal Reserve Bank of New York
• Robert B. Avery, Project Director of National Mortgage Database, Federal Housing Finance Agency
• Stephen C. Daffron, Founding Partner, Motive Partners
• Patricia Mosser, Senior Research Scholar and Senior Fellow, Columbia University School of International and Public Affairs
|12:45 – 1:45 p.m.||Lunch|
|2:00 – 3:30 p.m.||Panel 3: BIG QUESTIONS ABOUT BIG DATA (READ MODERATOR NOTE)
Big Data raises a number of significant ethical, legal, and sociopolitical questions. Is Big Data used in discriminatory ways and, if so, how can discrimination be prevented? Is Big Data invading our privacy? Who owns Big Data, and what does it mean to have ownership rights? How should society think about power and governance in a digital world? This panel explores the big questions about Big Data.
• Michael S. Barr (Moderator), Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; Professor of Public Policy, University of Michigan Gerald R. Ford School of Public Policy; and Faculty Director, Center on Finance, Law, and Policy, University of Michigan
• Thomas Brown, Partner, Global Banking and Payment Systems Practice, Paul Hastings
• Kabir Kumar, Director for Policy and Ecosystem Building, Omidyar Network
• Graham Steele, Minority Chief Counsel, U.S. Senate Committee on Banking, Housing, and Urban Affairs
• Marisabel Torres, Senior Policy Analyst, Wealth-Building Policy Project, National Council of La Raza
|3:30 – 3:45 p.m.||Break|
|3:45 – 4:00 p.m.||Welcome and Introduction of Keynote Speaker|
|4:00 – 5:00 p.m.||KEYNOTE ADDRESS by Harvard Economics Professor Sendhil Mullainathan|
Friday, October 28, 2016
|8:15 – 8:45 a.m.||Continental Breakfast|
|8:45 – 9:00 a.m.||Welcome and Reconvene by Center on Finance, Law, and Policy Faculty Director Michael S. Barr|
|9:00 – 10:30 a.m.||Panel 4: DATA SHARING & TRANSPARENCY (READ MODERATOR NOTE)
With appropriate privacy safeguards, enhanced financial data sharing could improve market discipline, augment consumer protection, and unlock new opportunities for research. To that end, could regulatory agencies set up “clean rooms” to share anonymized and de-identified financial data with academic researchers? Can more financial data be released to the public for crowd-sourced analysis, like in the Consumer Financial Protection Bureau’s Consumer Complaint Database? Would enhanced data sharing and transparency reduce incentives for data hoarding? Would it empower consumers? This panel will discuss opportunities and challenges relating to data sharing and transparency.
• Matthew Shapiro (Moderator), Lawrence R. Klein Collegiate Professor of Economics, University of Michigan
• David Bholat, Senior Analyst, Advanced Analytics Division, Bank of England
• Deborah Lucas, Sloan Distinguished Professor of Finance and Director, MIT Golub Center for Finance and Policy
• Matthew Reed, Chief Counsel, Office of Financial Research, U.S. Treasury Dept.
|10:30 – 10:45 a.m.||Break|
|10:45 – 12:15 p.m.||Panel 5: DATA MODELING AND ANALYTICS (READ MODERATOR NOTE)
What is the future of financial data modeling and analytics? This panel explores cutting-edge techniques including agent-based modeling, machine learning, textual extraction and computational representation, and predictive analytics, and explores potential applications to financial markets.
• H.V. Jagadish (Moderator), Bernard A. Galler Collegiate Professor of Electrical Engineering and Computer Science, University of Michigan
• Lewis Alexander, Managing Director & U.S. Chief Economist, Nomura
• Sanjiv Das, William and Janice Terry Professor of Finance and Business Analytics, Santa Clara University
• Zachary Ives, Professor of Computer and Information Science, University of Pennsylvania; Director, Singh Program on Networked & Social Systems Engineering
• Claire Monteleoni, Assistant Professor of Computer Science, George Washington University
|12:15 – 12:30 p.m.||Lunch Pickup|
|12:30 – 1:30 p.m.||KEYNOTE ADDRESS by SEC Commissioner Kara M. Stein|
|1:45 – 3:15 p.m.||Panel 6: DATA INTEGRATION AND VISUALIZATION (READ MODERATOR NOTE)
What are the most significant barriers data scientists face in integrating and reconciling various types and sources of data, including issues of standards, unique identity, ownership, and semantic translation? How should users efficiently and effectively integrate different data? What organizational behavior, incentive, and design issues or techno-cultural problems arise in assembling, analyzing, and deploying data? Moreover, how should data scientists represent information in ways that maximize actionability? This panel will examine approaches for enhancing the functionality and usability of diverse financial data sets.
• Mark D. Flood (Moderator), Research Principal, Office of Financial Research, U.S. Treasury Dept.
• Amol Deshpande, Professor of Computer Science, University of Maryland
• Peter Sarlin, Associate Professor, Hanken School of Economics
• Aurel Schubert, Director General, Statistics, European Central Bank
• Margaret Varga, Visiting Fellow, Oncology Dept., University of Oxford
|3:15 – 3:30 p.m.||Closing Remarks|
How can financial data be made more accessible and more secure, as well as more useful to regulators, market participants, and the public? As new data sets are created, opportunities emerge. Vast quantities of financial data may help identify emerging risks, enable market participants and regulators to see and better understand financial networks and interconnections, enhance financial stability, bolster consumer protection, and increase access to the underserved. Financial data can also increase transparency in the financial system for market participants, regulators and the public.
However, these vast data sets can raise significant questions about protecting security and privacy; ensuring data quality; protecting against discrimination or privacy intrusions; managing and analyzing enormous data sets; synthesizing and presenting data in usable form; and sharing data among regulators, researchers, and the public. Moreover, any conflicts among regulators and financial firms over such data could create opportunities for regulatory arbitrage and gaps in understanding risk in the financial system.
How should all of that data be aggregated, protected, analyzed, and shared? The Center on Finance, Law, and Policy – Office of Financial Research conference brought together experts domestically and internationally who have considered these questions and published research on these topics, or who have dealt with these issues in their professional roles and can ground the policy initiatives with real-world experience to discuss. Keynote speakers included U.S. Office of Financial Research director Richard Berner, Harvard University‘s Robert C. Waggoner Professor of Economics Sendhil Mullainathan and U.S. Securities & Exchange Commissioner Kara M. Stein.
The Big Data conference is part of the Center on Finance, Law and Policy’s broader work as an interdisciplinary research, policy and practice center that focuses on helping to make the financial system safer, fairer, and better harnessed to the needs of the real economy. We gratefully acknowledge the financial support of John Lummis, Paul Lee, Bill Marcoux, Stefan Tucker and Ron Glancz.