On June 2 2015 I attended a summit in NYC, topic being: Capital Unbound: The Cato Summit on Financial Regulation.
I would like to present a brief summary about this summit.
The summit was about industry response towards current challenges regulatory policies pose to the financial institution. It was a philosophical critique of SECs action and its counterproductive impacts.
The speakers gave a rhetoric view that because of regulatory policies the current growth is late to arrive and also there is no guarantee that this growth will be sustainable.
- Reason why earlier recession arrived was because of the irresponsible underwriting of housing mortgages to subprime customers. This policy of underwriting was started by Fannie Mae and Freddie Mac which was followed by the private players. So the fall in house prices created a systemic challenge. Because both the organization were govt. sponsored so it was the govt which started this trend.
- Speakers claim that government (Fed, SEC etc.) have not addressed this key issue but rigorously started putting risk limitations in other commercial, consumer lending. They also claim that their interference in the bank’s trading book have severely limited the business viability.
- They claim that policies of government are creating opportunities to create even more SIFIs and then limiting them in their activities. They claim that smaller banks are becoming more and more vulnerable because of regulatory compliances. They claimed that this possess a severe limitations on banks to act as a small business lenders and thus hamper a long term growth of the country.
- The speakers claim that it would have been a good idea if the banks were allowed to fail, that would have resulted in a stronger financial system.
Key Speakers were:
- Commissioner J. Christopher Giancarlo, U.S. Commodity Futures Trading Commission
- Kevin Dowd, Professor of Finance & Economics, Durham University and Adjunct Scholar, Cato Institute
- Commissioner Michael Piwowar, U.S. Securities and Exchange Commission
Further details can be found at: http://www.cato.org/events/capital-unbound-cato-summit-financial-regulation
Books provided in the summit:
As I said earlier these comments were more of a rhetorical views in the limited time span of the summit, the organizers provided several complimentary books to explain their conviction. The books I was able to collect are the following:
- The Leadership Crisis and the Free Market Cure: Why the Future of Business Depends on the Return to Life, Liberty, and the Pursuit of Happiness
- The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope
- The Libertarian Mind: A Manifesto for Freedom
- Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Created the Worst Financial Crisis of Our Time
I have checked the reviews of these books in Amazon, all are rated 4.5/5