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The Shadow Financial Regulatory Committee (SFRC), an independent group of experts sponsored by AEI, released its latest findings at a press luncheon on Monday. Robert Eisenbeis of Cumberland Advisors began by discussing how data breaches threaten not only financial firms but also nonfinancial businesses and the payment system as a whole. Because of the US economy's reliance on electronic payment, the SFRC emphasized the need for policymakers, including perhaps the Financial Stability Oversight Council, to prioritize identifying potential risks and improving security.
Kenneth Scott of Stanford Law School continued by summarizing the committee's reaction to the final version of the Volcker Rule, which they find too unclear to allow financial firms or regulators to make an objective evaluation of compliance. He lamented that the rule was hurriedly put together, not allowing sufficient time for comment review to prevent unintended consequences.
In closing, Edward Kane of Boston College discussed how regulatory authorities in the US, Europe, and other financial centers are working on rules to push over-the-counter derivative products into centralized clearing houses. The SFRC is concerned that as authorities continue to debate the rules, more and more banking activities will migrate into underregulated financial market utilities. Kane therefore stressed the urgent need for greater supervision.
The Shadow Financial Regulatory Committee (SFRC) is a group of publicly recognized independent experts on the financial services industry — including experts in banking, insurance, and securities — who meet regularly to study and critique regulatory policies affecting this sector of the economy.
During closed sessions before the luncheon, committee members will discuss a variety of current financial-regulation issues including the Volcker Rule, asset management and systemic risk, information breaches in the payment system, the US Commodity Futures Trading Commission granting substituted compliance, and the Group of Governors and Heads of Supervision leverage ratio. In a briefing following the sessions, SFRC members will present the adopted policy statements and answer related questions.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours. Please note, you do not have to register to watch online.
Registration and Lunch
For more information, please contact Brian Marein at [email protected], 202.862.5890.
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Kenneth W. Dam is the Max Pam Professor Emeritus of American and Foreign Law and a senior lecturer at the University of Chicago Law School. He served as deputy secretary in the US Department of the Treasury from 2001 to 2003 and at the US Department of State from 1982 to 1985. Previously, he was the executive director of the Council on Economic Policy and assistant director for national security and international policy at the Office of Management and Budget. Dam's work in the private sector includes serving as IBM's vice president for law and external relations and as president and CEO of the United Way of America. He is an honorary member of the board and nonresident senior fellow of the Brookings Institution. Dam is also a board member of the Committee for Economic Development and was formerly chairman of the German-American Academic Council. He has been a board member of numerous nonprofit institutions and served for 13 years on the board of Alcoa.
Robert A. Eisenbeis is the vice chairman and chief monetary economist at Cumberland Advisors, where he advises the company's asset managers on US economic and financial market developments and their implications for investment and trading strategies. Eisenbeis was formerly executive vice president and director of research at the Federal Reserve Bank of Atlanta, where he advised the bank's president on monetary policy for Federal Open Market Committee deliberations and was in charge of basic research and policy analysis. Previously, he was the Wachovia Professor of Banking at the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill. He has also held senior positions at the Federal Reserve Board and Federal Deposit Insurance Corporation. Eisenbeis is a member of the Financial Economists Roundtable and a fellow of the National Association of Business Economics.
Richard J. Herring is cochair of the Shadow Financial Regulatory Committee. He is also the Jacob Safra Professor of International Banking and codirector of the Wharton Financial Institutions Center at the Wharton School of the University of Pennsylvania, where he has worked since 1972. He is likewise the executive director of Wharton’s Financial Economists Roundtable and a member of the Federal Deposit Insurance Corporation Systemic Resolution Advisory Committee and the Systemic Risk Council. His research areas include international banking, international finance, and money and banking. He has written more than 125 articles, monographs, and books, and his research has been sponsored by the National Science Foundation, the Ford Foundation, the Sloan Foundation, Pew Charitable Trusts, and several different international organizations.
Edward J. Kane is a professor of finance at Boston College. From 1972 to 1992, he held the Everett D. Reese Chair of Banking and Monetary Economics at Ohio State University. Kane is a founding member of the Shadow Financial Regulatory Committee and served for 12 years as a trustee and member of the finance committee of Teachers Insurance. He currently consults for the World Bank and is a senior fellow in the Federal Deposit Insurance Corporation’s Center for Financial Research. Previously, Kane consulted for numerous agencies, including the International Monetary Fund, components of the Federal Reserve System, and three foreign central banks. He also consulted for the Congressional Budget Office, the Joint Economic Committee, and the Office of Technology Assessment of the US Congress. He is a past president and fellow of the American Finance Association and a former Guggenheim fellow. He also served as president of the International Atlantic Economic Society and the North American Economics and Finance Association. Kane is a longtime research associate of the National Bureau of Economic Research. He has authored three books and coauthored or coedited several more. Kane has published widely in professional journals and currently serves on seven editorial boards.
George G. Kaufman is the cochair of the Shadow Financial Regulatory Committee. He is also the John Smith Professor of Finance and Economics at Loyola University Chicago, where he has taught since 1981. He previously taught at the University of Oregon and was a research officer at the Federal Reserve Bank of Chicago. He was likewise a visiting professor at Stanford University; the University of California, Berkeley; and the University of Southern California. He was a visitor at the Federal Reserve Bank of San Francisco and at the Comptroller of the Currency, where he was acting director of research. He also served as a deputy to the assistant secretary of the US Department of the Treasury. Kaufman has published widely in leading professional journals and was a founding editor of both the Journal of Financial Services Research and Journal of Financial Stability. He has served as president of the Midwest Finance Association and the North American Economic and Finance Association, and past director of the American Finance Association. He is currently president of the Western Economic Association and the Western Finance Association.
Kenneth E. Scott is the Ralph M. Parsons Professor of Law and Business emeritus at Stanford Law
School and a senior research fellow at the Hoover Institution. He is a prominent scholar in the fields of corporate finance reform and corporate governance, federal deposit insurance issues, and federal banking regulation. He has recently coauthored and coedited books on the financial crisis and bailout reforms. Scott has consulted extensively, including with the World Bank, the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, and the National Association of Securities Dealers. He is also a member of the Financial Economists Roundtable and the State Bar of California's Financial Institutions Committee. Before joining the Stanford Law School faculty in 1968, Scott was general counsel to the Federal Home Loan Bank Board and chief deputy savings and loan commissioner of California. He has practiced law in New York and Los Angeles.
Chester Spatt is the Kenneth B. and Pamela R. Dunn Professor of Finance at Carnegie Mellon, where he has taught since 1979. From 2004 to 2007, Spatt served as the chief economist and director of the Office of Economic Analysis for the US Securities and Exchange Commission. He has written extensively on financial regulation, market structure, taxation and asset allocation, pricing and valuation, and the impact of information in the marketplace. Additionally, he is a member of the Federal Reserve’s Model Validation Council, the Systemic Risk Council, and the Financial Economists Roundtable. He is also senior economic adviser to Kalorama Partners and a fellow at the TIAA-CREF Institute. Spatt was a founder and the second executive editor of the Review of Financial Studies, is past president of both the Western Finance Association and Society for Financial Studies, and served as a member of the economic advisory board for NASDAQ from 2000 to 2002.