Newsmakers

Sanjiv Das, William and Janice Terry Professor of Finance and Business Analytics, took first place in MIT’s Center for Finance and Policy’s first crowd-sourced contest. The topic was “What is a Systemically Important Financial Institution?,” addressing how to classify financial institutions as SIFIs under new government regulations. The contest was a collaboration between the MIT Center for Finance and Policy and the Harvard Crowd Innovation Laboratory.

"I proposed a system-wide score incorporating both the credit quality of each financial institution and its interconnectedness," says Professor Das. "Regulators could then use such a score to detect when the financial system is under stress and use a cut-off level to define as a SIFI any financial institution whose risk contribution exceeds that level. The method can be implemented for publicly traded firms using credit ratings and stock returns."

Find the full press release here. 

Find Professor Das’ proposal here.

Learn more about Professor Sanjiv Das.