1150 Seventeenth Street, N.W., Washington, D.C. 20036
In late March, Treasury Secretary Timothy Geithner proposed a two-part plan for addressing systemic risk in light of the failure of Lehman Brothers and the rescue of AIG. As proposed, the plan contemplates a "systemic regulator" that would oversee the entire financial system and have the authority to designate certain
Download Audio as MP3 bank and nonbank financial firms as "systemically important financial institutions" (SIFIs). The designation would apparently mean that the government believes an SIFI's failure could result in a systemic breakdown--a widespread economic or financial collapse--and, for that reason, SIFIs would be specially regulated and supervised. In addition, the plan would give the Federal Deposit Insurance Corporation the authority to bail out or liquidate failing SIFIs. The plan raises significant questions: whether it is possible to identify, in advance, firms that might cause a systemic breakdown if they fail; whether a designation as an SIFI will be seen by markets as a government certification that an institution is too big to fail; whether a resolution system for nonbank financial institutions will result in more AIG-like bailouts; and whether what happened in the financial markets this past fall was an example of systemic risk. These and other questions will be addressed at this conference.
|12:00 p.m.||Keynote Presentation:||Alan Greenspan, Greenspan Associates|
|1:30||Panel I: Should There Be a Systemic Risk Regulator with the Power to Designate "Systemically Important" Financial Firms?|
|Panelists:||Martin Baily, Brookings Institution|
|Edward Collins, Allstate Insurance|
|Allan Mendelowitz, Federal Housing Finance Board|
|Alex J. Pollock, AEI|
|Moderator:||Peter J. Wallison, AEI|
|3:00||Panel II: Do We Need a Special Government System, Apart from Bankruptcy, to Resolve Failing Nonbank Financial Firms?|
|Panelists:||Richard Breeden, Breeden Capital Management
|Douglas Elliott, Brookings Institution|
|Arthur Murton, Federal Deposit Insurance Corporation|
|David Skeel, University of Pennsylvania|
|Peter J. Wallison, AEI|
|Moderator:||Alex J. Pollock, AEI|
American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
E-mail: [email protected]
American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
E-mail: [email protected]
Martin Baily is a senior fellow in economic studies at the Brookings Institution, where he focuses on issues of globalization, productivity and competitiveness, Social Security reform, and U.S. economic policy. He is also a senior advisor at McKinsey & Company's Global Institute, an adviser to the Congressional Budget Office, and a director of the Phoenix Companies. Mr. Baily was the chairman of the Council of Economic Advisers during the Clinton administration (from 1999 to 2001) and one of three members of the council from 1994 to 1996. Prior to his return to Brookings in September 2007, Mr. Baily was a senior fellow at the Peterson Institute for International Economics. He has served as an academic adviser to the Federal Reserve Board and on a panel convened by the Office of Technology Assessment, and he was the vice chairman of a panel of the National Academy of Sciences/National Research Council to investigate the effect of computers on productivity. Mr. Baily has testified numerous times before Congress, is the author of many professional articles, and is the coauthor or editor of five books.
Richard Breeden is the founder and chairman of Breeden Capital Management, which together with affiliates manages approximately $1.5 billion in assets invested solely in equity securities of U.S. and European companies. He is a former chairman of the U.S. Securities and Exchange Commission, where he served from 1989 to 1993. During his tenure, he handled the failure of Drexel Burnham Lambert and the restructuring of Salomon Brothers without cost to taxpayers. From 1982 to 1985, Mr. Breeden served as staff director of the Reagan administration's cabinet-level Task Force on Regulation of Financial Services, which evaluated opportunities to reform federal bank and other financial regulatory programs. He served as a senior adviser to President George H. W. Bush both during his terms as vice president and during the first year of his presidency. As assistant to the president in 1989, Mr. Breeden was the chief architect of the president's highly successful program to restructure the savings and loan industry and designed the Resolution Trust Corporation as a device to handle extraordinary numbers of depository institution failures. From 1996 to 2004, Mr. Breeden served as trustee in bankruptcy of the Bennett Funding Group, a leasing company that was the scene of a multibillion dollar ponzi scheme, and from 2002 to 2005, he served as the corporate monitor of WorldCom on behalf of the U.S. District Court overseeing the largest bankruptcy proceeding in U.S. history. Mr. Breeden is currently nonexecutive chairman of the board of H&R Block, and he has served on the boards of more than a dozen public and private companies in the United States and Europe. He is recognized around the world as an expert on corporate governance practices.
Edward Collins is the assistant vice president and assistant general counsel at the Allstate Corporation. After beginning his career as an intern in the law and regulation department in 1985, he eventually joined that department full time, holding various positions that covered virtually the entire range of legal and public policy issues an insurance company faces. At Allstate, Mr. Collins has managed processes to set up companies, withdraw companies, and operate them profitably in the nation’s most challenging markets. He has managed complex litigation, including numerous rate cases from the filing stage and through the administrative hearing and appellate processes in the courts. Additionally, he has managed state legislative and regulatory affairs on a countrywide basis and is now the leader of Allstate’s public policy group.
Douglas Elliott is a fellow in economic studies and a member of the Initiative on Business and Public Policy at the Brookings Institution, where he focuses on the federal government's role in dealing with the current financial market crises. He was previously president and principal researcher for the Center on Federal Financial Institutions, a nonpartisan think tank that he founded in 2003. The bulk of Mr. Elliott's career since 1985 has been as a financial institutions investment banker, most recently as a managing director at J. P. Morgan, where he worked for fourteen years. Mr. Elliott has also worked as an investment banker with Sanford Bernstein, Sandler O'Neill, and ABN AMRO. Throughout his professional career, he has researched financial institutions or worked directly with them as clients in a range of capacities. His work has encompassed banks, insurers, funds management firms, and other financial institutions. Mr. Elliott has testified before both houses of Congress and participated in numerous policy forums as an expert. His analyses have been frequently quoted in major publications, and he has often participated as an expert on The NewsHour with Jim Lehrer and other news shows.
Alan Greenspan heads Greenspan Associates, a consulting firm, and previously served as chairman of the Board of Governors of the Federal Reserve System for eighteen and a half years. Mr. Greenspan also served as chairman of the Federal Open Market Committee, the Federal Reserve's principal monetary policymaking body. He originally took office as chairman and to fill an unexpired term as a member of the Board in August 1987 and was reappointed to the Board for a full fourteen-year term in February 1992—a term that lasted until January 2006. He was designated chairman by Presidents Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush. From 1954 to 1974 and from 1977 to 1987, Mr. Greenspan was chairman and president of Townsend-Greenspan & Co., an economic consulting firm in New York City. From 1974 to 1977, he served as chairman of the President's Council of Economic Advisers under President Gerald Ford and, from 1981 to 1983, as chairman of the National Commission on Social Security Reform. Mr. Greenspan was appointed a member of President Reagan's Economic Policy Advisory Board, the President's Foreign Intelligence Advisory Board, the Commission on Financial Structure and Regulation, the Commission on an All-Volunteer Armed Force, and the Task Force on Economic Growth. Before his appointment to the Federal Reserve Board, Mr. Greenspan served as a director of numerous corporations, including J. P. Morgan & Co., Mobil Corporation, Aluminum Company of America (Alcoa), General Foods, and Capital Cities/ABC. He was a term member of the board of trustees of the RAND Corporation, a member of the board of overseers of the Hoover Institution (at Stanford University), and vice chairman and trustee of the Economic Club of New York. He has received honorary degrees from Harvard, Yale, Pennsylvania, Notre Dame, Leuven (Belgium), and Edinburgh universities. He received the Legion of Honor (Commander) from France; became an honorary Knight Commander of the British Empire; and received the Medal of Freedom, the United States' highest civil award. Mr. Greenspan is also the author of The Age of Turbulence (Penguin, 2007).
Allan Mendelowitz has been on the board of directors of the Federal Housing Finance Board since 2000, and he served as the board's chairman from 2000 to 2001. Previously, he was the executive director of the U.S. Trade Deficit Review Commission, a congressionally appointed bipartisan panel. Mr. Mendelowitz has also served as the vice president of the Economic Strategy Institute--supervising research on trade policy, international competitiveness, and telecommunications policy--and as an executive vice president of the Export-Import Bank of the United States. From 1981 to 1995, Mr. Mendelowitz was the managing director for international trade, finance, and economic competitiveness at the General Accounting Office. He was formerly an economic policy fellow at the Brookings Institution and on the faculty of Rutgers University, where he taught courses in international trade and finance and urban and regional economics. His articles have appeared in the Journal of Business, the National Tax Journal, the Journal of Policy Analysis and Management, and the Financial Times.
Arthur Murton is the director of the division of insurance and research at the Federal Deposit Insurance Corporation (FDIC). The division is responsible for macro risk analysis; banking statistics; deposit insurance pricing and insurance funds management; and policy development and banking research, both in-house and through the FDIC's Center for Financial Research.
Alex J. Pollock has been a resident fellow at AEI since 2004, focusing on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. Previously, he spent thirty-five years in banking, including twelve years as president and chief executive officer of the Federal Home Loan Bank of Chicago. He is the author of numerous articles on financial systems and the organizer of the "Deflating Bubble" series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. He is a director of Allied Capital Corporation, the Chicago Mercantile Exchange, the Great Lakes Higher Education Corporation, the International Housing Union for Housing Finance, and the chairman of the board of the Great Books Foundation.
David Skeel is the S. Samuel Arsht Professor of Corporate Law at the University of Pennsylvania Law School. He is the author of Icarus in the Boardroom (Oxford University Press, 2005) and Debt's Dominion: A History of Bankruptcy Law in America (Princeton University Press, 2001), as well as numerous articles and other publications. Mr. Skeel has been interviewed on Nightline, Hardball with Chris Matthews, National Public Radio, and Marketplace, among others, and has been quoted in the New York Times, the Wall Street Journal, the Washington Post, and many other publications. He has twice received the Harvey Levin Award for outstanding teaching, as selected by a vote of the University of Pennsylvania's graduating class, as well as the university's Lindback Award for distinguished teaching. In addition to corporate law and bankruptcy, Mr. Skeel also writes on sovereign debt, law and religion, and poetry and the law.
Peter J. Wallison holds the Arthur F. Burns Chair in Financial Policy Studies at AEI, where he codirects the Institute's program on financial market deregulation. He previously practiced banking, corporate, and financial law at Gibson, Dunn & Crutcher in Washington, D.C., and New York. From June 1981 to January 1985, Mr. Wallison was general counsel of the U.S. Treasury Department, where he had a significant role in the development of the Reagan administration's proposals for deregulation in the financial services industry. He also served as general counsel to the Depository Institutions Deregulation Committee and participated in the Treasury Department's efforts to deal with the debt held by less-developed countries. During 1986 and 1987, Mr. Wallison was White House counsel to President Ronald Reagan. Between 1972 and 1976, Mr. Wallison served first as special assistant to Governor Nelson A. Rockefeller and, subsequently, as counsel to Mr. Rockefeller when he was vice president of the United States.