U.S. Monetary Policy Forum; New York, New York
Frebruary 26, 2010

On Friday February 26, the IGM hosted its annual “U.S. Monetary Policy Forum” conference that featured a report on Financial Conditions Indices and a panel discussion on Financial Regulatory Reform.  The Panel was moderated by David Wessel of the Wall Street Journal and featured commentary Federal Reserve Governor Daniel Tarullo, Federal Reserve Bank of Chicago President Charles Evans, and Professor Anil Anil Kashyap.  Professor Kashyap’s speech was titled “Let’s Not Pursue the Volcker Rule.”

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Comments by Governor Daniel Tarullo
U.S. Monetary Policy Forum, New York, New York
February 26th, 2010

Daniel Tarullo, Federal Reserve Board of Governors, participated in a panel discussion at the 2010 US Monetary Policy Forum on financial regulatory reform. The panelists discussed priorities for improving financial regulation. This included an assessment of issues where a consensus is emerging as to how reform should proceed and the identification of open questions where agreement about the way forward is uncertain.  The panel discussed how regulatory choices will impact monetary policy making and other Federal Reserve responsibilities.

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The recent decision by European governments to bail out Greece has raised questions about the viability of the single currency area in Europe. Professors John Cochrane, Roger Myerson, and Luigi Zingales will discuss the bailout decision, the foundations of the euro area, and its future.  Professor Anil Kashyap moderates the panel.

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By Oliver Hart and Luigi Zingales
FT.com, February 7th, 2010

In the struggle to identify how to avoid a repeat of last year’s financial crisis there is an emerging consensus among regulators, academics and practitioners that contingent convertible (Coco) bonds are the way to go. The idea is to have some debt in the capital structure of banks that converts into equity when a bank faces financial distress.

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By Douglas Diamond and Anil K Kashyap
The New York Times, Op-ed

WALL STREET is considering legal action to prevent President Obama from imposing a new tax on bailed-out financial institutions. Because the law that created the Troubled Asset Relief Program compels the government to recoup the bailout money, it’s unlikely that banks will succeed in avoiding recompense. So rather than debate the constitutionality of the proposed tax, it is far more productive to design the best possible repayment plan.

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Professors Steven Kaplan, Tobias Moskowitz, and Luigi Zingales discuss the ethics and the role of ethics on Wall Street, in the past, the present, and going into the future.

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Myron Scholes Forum, December 3, 2009

Professor Steven N. Kaplan discusses (1) whether CEO pay is out of control; (2) the role of pay at banks and financial firms in regard to the financial crisis; and (3) whether proposed new regulations and caps make sense.

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By Luigi Zingales
FT.com, December 16th, 2009

The idea of imposing a tax on financial transactions, also called the Tobin tax after the economist who first proposed it, is back in vogue. It has strong political appeal, catering to demands to punish banks for the crisis they have bestowed. It satisfies the political need to do something to avoid a repeat of the crisis. And, at a time of fiscal crisis, it provides an easy way to raise revenues without increasing income taxes. Last Friday, European Union leaders urged the International Monetary Fund to consider such a tax.

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By Steven N. Kaplan
The Economists’ Voice

Pay structures weren’t the problem, argues Steven Kaplan, who suggests that contingent equity is a better way to avoid bailouts.

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By Ethan Harris, Bruce Kasman, Matthew Shapiro, and Kenneth West
This paper was prepared for the 2009 conference of the US Monetary Policy Forum (USMPF).

This report examines the role of oil in the macroeconomy with the aim of evaluating and guiding central bank responses to oil price movements.

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