With the support of the Alfred P. Sloan Foundation, the Center for the Study of the Presidency and Congress convened a group of financial experts at Georgetown University for a five-hour table top exercise on financial contingencies facilitated by Booz Allen Hamilton. The exercise led high level public and private sector participants through progressively worsening scenarios of economic instability in Europe, over the course of which an Italian bank fails, a money market mutual fund “breaks the buck,” and French banks are nationalized before suspending payments to U.S. creditors.
The purpose of the scenario was not to predict what future events are likely to be, but more so to evaluate tools and processes available to policymakers to address crises, how these tools have changed since 2008, and what needs to be done to create greater economic security and international coordination in financial markets going forward.
As government officials must be wary of their comments causing reactions in the market, the session was held in a not-for-attribution setting to encourage a free exchange of ideas. This format allowed current government officials, private sector and academic counterparts to openly discuss sensitive issues in a secure environment. In addition, the events of the scenario were revealed step-by-step, mitigating the tendency of experts to stick to predetermined opinions and comments.
You can read the non-attribution after action report here.