Office of International Affairs

Risk & Research Analysis

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The Office of Risk & Research Analysis (RRA) advises and assists the Under Secretary and Assistant Secretary of the Treasury on international economic and financial issues. RRA engages in analytic research on issues that often require intensive quantitative or technical examination, as well as projects to support other offices. Areas of responsibility include: the global economy, crisis prevention and vulnerabilities, and financial markets.

Global Economy – RRA manages analysis of cross-cutting world economic issues. The office often uses models to simulate policy options and works with other agencies to evaluate alternative scenarios such as the impact of higher interest rates or oil prices on the global economy.

Crisis Prevention and Financial Vulnerabilities – RRA manages several products for senior Treasury and government officials, which serve as critical tools in crisis prevention and early warning analysis. They include:

• Blue Chip Early Warning System – The Blue Chip is part of International Affairs’ strategy to highlight vulnerabilities and reinforce Treasury’s ability to help prevent crises. The product assesses the likelihood that a country will experience a currency, debt or banking crisis over the next three to twelve months.

• Inter-Agency Vulnerabilities Working Group (VWG) – RRA leads an interagency working group whose mission is to discuss critical economic and political vulnerabilities that could affect U.S. economic or political interests. Recommended actions are submitted to the Under Secretary, Assistant Secretary and other senior U.S. government officials for follow-up.

• Hot Spots – a weekly brief of economic events that are important for Treasury, due to global economic implications or relevance to financial markets.

• Expanded Early Warning System – The Expanded EWS analyzes a broad array of lower income countries. The framework also assists Treasury study fragile states.

• Major Markets Monthly – empirically evaluates and qualitatively describes key issues and vulnerabilities in major world financial markets, as well as macro trends.

Financial Markets – RRA assists International Affairs in understanding the linkages between financial market forces and policy.