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Workshop on Data Confidentiality

Recent interest in understanding systemic financial risk has led to the creation of government agencies with the mandate to (a) collect data from financial institutions on inter-institutional transactions, (b) analyze the data looking for signs of potential systemic problems
and (c) release information about the findings to the government, industry and the general public.

The data these agencies will collect are highly sensitive, as they may reveal trade secrets (such as trading positions or strategies) and in some cases even personal information about individual investors and borrowers. The aggregation and analysis of transactional data from across many financial institutions thus poses a number of new problems related to security and confidentiality. The proposed workshop will bring together experts from several domains in an attempt to understand these new problems and the challenges they raise. Because this is a relatively new area, much of the workshop will consist of tutorial-like talks aimed at familiarizing participants with the
terminology and principal ideas of the different relevant disciplines.

Questions to be discussed at the workshop include:

    How can financial data be collected securely?
    How should access to these data be controlled?
    How will the data be used, and what types of information will need to be released to regulators, financial   institutions, and the public?
    What is the state of the art in understanding confidentiality and privacy issues in other domains?
    What types of potential problems should agencies be most concerned about?
    Which if these can be addressed with known techniques, and what are the pressing research challenges?

The workshop will draw participants from government (namely the Office of Financial Research) and several academic disciplines, including computer science, statistics and finance. The format will be a mix of discussion sessions, panels and traditional lectures.

The deliverable will be a workshop proceedings that gives a general overview of the problem of privacy and confidentiality for financial data, and relevant related areas, and a set of recommendations for future research.

Suggested Reading for workshop participants.

1.  Bisias, Dimitrios, Mark Flood, Andy Lo, and Stavros Valavanis (2012),
"A Survey of Systematic Risk Analytics", Office of Financial Research,
U.S. Treasury, Working Paper.
Paper

2.    Fostel, Ana and John Geanakoplos (2008), "Leverage Cycles and the Anxious Economy", American Economic Review, 98:4, pp. 1211-1244.
Slides
Paper

3. Caballero, Ricardo J. (2010), "Sudden Financial Arrest", IMF Economic Review, 58, pp. 6-36.
Paper

4.  Brunnermeier, Markus K., and Lasse Heje Pedersen. "Market Liquidity and Funding Liquidity." Review of Financial Studies 22, pp. 2201-2238.
Paper