June 3rd, 2010 by igmforum editor
By Raghuram Rajan
FT.com; June 2, 2010
Bankers must be heaving a sigh of relief as the shenanigans of the offshore drilling industry have pushed them to the edge of the radar screen of those targeting corporate greed. But it is unlikely their respite will be for long. Inquiries under way are bound to unearth more instances of ethically, and even legally, challenged bankers. When overlaid on images of bankers hankering after their outlandish bonuses soon after being bailed out with public money, the public picture of an industry motivated only by money and without any sense of the larger consequences of its actions will be reinforced. How do we instill more social values in the industry? Or is banker greed mostly good?
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May 28th, 2010 by igmforum editor
Eugene Fama
Squawk Box; May 28th, 2010
Univeristy of Chicago finance professor Eugene Fama, widely known as the “father of modern finance,” discusses whether the government is the biggest risk to economic recovery
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May 3rd, 2010 by igmforum editor
by Christian Leuz and other members of the Shadow Financial Regulatory Committee
The recent G20 meetings demonstrated the substantial divide between policymakers over the right approach toward the “too-big-to-fail” problem for large, global financial institutions. Some policymakers accept that some financial firms will inevitably be too-big-to-fail and wish to focus policy efforts on facilitating orderly bailouts and agreeing in advance on “burden-sharing” arrangements for allocating bailout costs among countries. Other policy makers reject that view and argue that policies could be introduced that would substantially reduce the chance of a failure by a large financial institution. Furthermore, they believe that it would be possible to reform the process of resolving failed institutions to permit large, complex institution to fail, and to be wound down with significant losses to its creditors, but without generating intolerable spillovers or systemic risk.
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April 29th, 2010 by igmforum editor
By Atif Mian and Amir Sufi
VoxEU
US Congressional committees are now grilling bankers on the complex instruments that provided subprime mortgages with a veil of security. This column presents new evidence that subprime mortgages had more serious consequences – they were a key factor in the US housing-price boom. When house prices faltered, subprime mortgage holders defaulted en masse, eventually leading to the global crisis.
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April 14th, 2010 by igmforum editor
By Christian Leuz
International Financial Reporting Standards (IFRS) are set to become the global accounting language. Empirical evidence suggests, however, that IFRS adoption alone will not lead to global convergence of reporting practices, and will not make comparing companies’ financial statements as easy as many have hoped. True convergence in reporting practices would require a much broader convergence of countries’ institutional frameworks, which is unrealistic in the future and probably not even desirable. I therefore propose a different way forward: to create a “Global Player Segment” in which firms would use the same reporting rules (ie, IFRS), face the same enforcement mechanisms, and have similar incentives for transparent reporting.
Read GPS Proposal>
For more background, see related research paper>
On April 26th, 2010, the Shadow Financial Regulatory Committee issued a statement proposing such a Global Segment.
April 6th, 2010 by igmforum editor
By Raghuram Rajan
Businessweek; April 1, 2010
The Dodd financial reform bill, which awaits the Senate after its two-week break, is loaded with good intentions. But does it do enough to keep banks from going out on a limb for profits?
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March 19th, 2010 by igmforum editor
By Luigi Zingales and Oliver Hart
National Affairs, Spring 2010
The financial crisis of 2008 had many causes. They ranged from a housing bubble to excessive speculation, and from inadequate accounting rules to reckless corporate governance. But at the heart of the meltdown were the financial industry’s distorted incentives — created in large part by decades of misguided government policy — which caused bankers and investors to take enormous risks without due regard for their consequences.
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March 17th, 2010 by igmforum editor
Testimony of Anil K Kashyap in “Examining the Link Between Fed Bank Supervision and Monetary Policy” before the House Financial Services Committee, United States House of Representatives - March 17, 2010
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March 12th, 2010 by igmforum editor
By Michael Greenstone
Myron Scholes Forum, March 4th, 2010
Professor Michael Greenstone of MIT discusses the various and numerous challenges that face the global economy in light of the Copenhagen Climate Conference of 2009.
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