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Sebastian Mallaby

Paul A. Volcker Senior Fellow for International Economics

Expertise

Globalization, international finance, monetary policy, hedge funds.

Programs

The Stephen C. Freidheim Symposium on Global Economics , World Economic Update Series , High-Level Roundtable Series on International Economics , Roundtable on Global Economics

Bio

Sebastian Mallaby is Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations (CFR). An experienced journalist and public speaker, Mr. Mallaby has served as a contributing editor for the Financial Times and as a columnist and editorial board member at the Washington Post. His interests cover a wide variety of domestic and international issues, including financial markets, the implications of the rise of newly emerging powers, and the intersection of economics and international relations. His writing has also appeared in the New York Times, the Wall Street Journal, and the Atlantic Monthly.

Mr. Mallaby is currently writing a biography of the former Federal Reserve chairman, Alan Greenspan. His previous book, More Money Than God: Hedge Funds and the Making of a New Elite, was released in June 2010. New York Times columnist David Brooks has called it "superb." Washington Post columnist Steve Pearlstein has called it "the definitive history of the hedge fund, a compelling narrative full of larger-than-life characters and dramatic tales of their financial triumphs and reversals." More Money Than God was the recipient of the 2011 Loeb Prize, a finalist in the Financial Times/Goldman Sachs prize, and a New York Times bestseller. Mr. Mallaby's earlier books are The World's Banker (2004), a portrait of the World Bank under James Wolfensohn, which was named as an "Editor's Choice" by the New York Times; and After Apartheid (1992), which was named by the New York Times as a "Notable Book." An essay in the Financial Times said of The World's Banker, "Mallaby's book may well be the most hilarious depiction of a big organization and its controversial boss since Michael Lewis's, Liar's Poker."

Before joining the Post in 1999, Mr. Mallaby spent thirteen years with the Economist. While at the Economist, he worked in London, where he wrote about foreign policy and international finance; in Africa, where he covered Nelson Mandela's release and the collapse of apartheid; and in Japan, where he covered the breakdown of the country's political and economic consensus. Between 1997 and 1999, Mr. Mallaby was the Economist's Washington bureau chief and wrote the magazine's weekly Lexington column on American politics and foreign policy. His Foreign Affairs essay on failed states in 2002 was cited by commentators in the New York Times, Financial Times, and Time Magazine. He is a two-time Pulitzer Prize finalist: once for editorials on Darfur and once for a series on economic inequality.

Mr. Mallaby was educated at Oxford. He graduated in 1986 with a First Class degree in modern history.

Alan Greenspan and the Making of the Modern Financial System

Alan Greenspan made his first foray onto the national scene in 1968 when he served as an advisor to the Nixon presidential campaign. From that point until his retirement from the Federal Reserve in 2006, Greenspan was at or near the center of economic and financial policy. Over those four decades, the United States moved from a gold link to a free-floating currency, from autarkic capital controls to globalized finance, and from a highly regulated banking system to free-wheeling markets. Greenspan was close to the decisions that drove these changes—whether through his stint as chairman of the Council of Economic Advisors in the Ford years, through his many roles as an informal advisor to Republican administrations, through his positions on the boards of various financial institutions, or through his long years at the helm of the Federal Reserve. By tracing these twin threads, my forthcoming biography of the former Federal Reserve chairman will therefore tell two stories: the making of the man, and the making of the modern financial system.

Surveying the Global Crossroads of Politics and Finance

As globalization blurs the boundaries between national economies, the distinctions between political news and financial news are dissolving. Because events in one corner of the world can have major implications for markets around the globe, staying abreast of the latest political developments and economic data is essential in order to have a clear view of the forces shaping government and business decisions. Through roundtables, panel discussions, and quarterly World Economic Update meetings, I seek to put these current events in a larger macroeconomic context and consider their significance for leaders in both the public and private sector.

Featured Publications

All Publications

Op-Ed

Blaming Deregulation

Author: Sebastian Mallaby
The Washington Post

In this Washington Post op-ed, Sebastian Mallaby argues that blaming deregulation for the financial mess is both misguided and dangerous. One of the big challenges for the next president will be to defend markets against the inevitable backlash that follows this crisis.

See more in Financial Crises; Elections

Op-Ed

A Bad Bank Rescue

Author: Sebastian Mallaby
Washington Post

Sebastian Mallaby says, the Treasury plan outlined Friday (9/26) involves vast risks, huge complexity and no guarantee of success. There are better ways forward, such as ordering banks to raise capital or buying equity stakes in them.

See more in North America; Financial Crises

Op-Ed

Paulson's Moment of Truth

Author: Sebastian Mallaby
Washington Post

Sebastian Mallaby writes that in refusing to bail out Lehman, Paulson gambled that he could let the institution fail without sowing market pandemonium. If he is right, Paulson's move may limit the damage to U.S.-style financial globalization.

 

 

See more in Financial Crises

Op-Ed

Throwing Honesty Out the Window

Author: Sebastian Mallaby
Washington Post

In response to the failure of Bear Stearns, the near-failure of Lehman Brothers, and now the crisis at Fannie Mae and Freddie Mac, the SEC has begun clamping down on short-selling.  However, in this Washington Post op-ed, Sebastian Mallaby says that short-sellers serve as useful market watchdogs and are the wrong villain in this crisis.

See more in Financial Crises

Op-Ed

Nationalization: A Solution for Housing

Author: Sebastian Mallaby
Washington Post

Nationalizing Fannie Mae and Freddie Mac, the two monster housing-finance companies, may be risky, but it is healthier than other options.  In this Washington Post op-ed, Sebastian Mallaby argues that the US government should nationalize and then dismantle these institutions, creating maximum space in the mortgage market for smaller private players.

See more in United States; Financial Crises; Financial Markets

Op-Ed

Our Tarnished Titans

Author: Sebastian Mallaby
Washington Post

For many decades, banking giants such as JP Morgan, Goldman Sachs and others, enjoyed the reputation that came with their economic clout, political influence and sheer wealth. However, recent events at Lehman Brothers and Bear Stearns have called into question this polished image, says Sebastian Mallaby.

See more in Financial Markets; United States

Op-Ed

The Audacity of Growth

Author: Sebastian Mallaby
Washington Post

John McCain likes to say he is for economic growth, offering the Republican narrative that they are for lower taxes, less regulation and freer trade. In this Washington Post op-ed, Sebastian Mallaby says that the real litmus tests on growth lie in policies toward education, basic science, skilled immigration, infrastructure and the grotesque tort system. And on these issues, the real pro-growth candidate looks to be Barack Obama.

See more in Monetary Policy; United States

Op-Ed

Rice and Baloney

Author: Sebastian Mallaby
Washington Post

We are now several months into the global food crisis. Food prices have almost doubled in three years, threatening to push 100 million people into absolute poverty, undoing much of the development progress of the past few years. The new hunger has triggered riots from Haiti to Egypt to Ethiopia, threatening political stability; it has conjured up a raft of protectionist policies, threatening globalization. Yet, Sebastian Mallaby argues that the response to this crisis from governments the world over has been lackadaisical or worse.

See more in Food Security; Agricultural Policy; Global

Op-Ed

Wright and Ridiculous

Author: Sebastian Mallaby
Washington Post

Of all the strange features of this presidential race, the tarnishing of Barack Obama has got to be the most ridiculous. In this Washington Post op-ed, Sebastian Mallaby writes that the Obama-Wright "revelations" are really a revelation about our political culture: About its failure to distinguish the important from the trivial and about the inevitability that the race card will eventually be played against a black candidate.

See more in Elections

Op-Ed

Housing Sense in Congress?

Author: Sebastian Mallaby
Washington Post

In this Washington Post op-ed, Sebastian Mallaby argues that while the people falling behind on their mortgages do not deserve government assistance, the threat of a negative spiral in homes prices warrants federal measures to reduce foreclosures. And despite the political candidates who routinely denonuce Washington, the proposals in the House and Senate are by and large sound.

See more in Congresses, Parliaments, National Legislatures; Economic Development; Elections

Op-Ed

Double Bubble Trouble?

Author: Sebastian Mallaby
Washington Post

In this Washington Post op-ed, Sebastian Mallaby explores the double-bubble theory of the current financial crisis—not only do we face the bursting of a real estate bubble, but we also face the bursting of a second bubble which is the product of a quarter-century expansion in borrowing, excessive confidence in the dollar and an overblown faith in markets.  In order to deal with this double-bubble, Mallaby advocates two reforms: bringing complex, “over the counter” securities onto exchanges and requiring lenders to increase capital cushions during market upswings.

See more in United States; Financial Crises; Financial Markets

Op-Ed

Demons on Wall Street

Author: Sebastian Mallaby
Washington Post

One year ago, with spectacular timing, a Wall Streeter named Richard Bookstaber published a book on financial engineering. He called it "A Demon of Our Own Design," and his argument was that a new breed of "quants" had created a system too complex to be manageable. In this Washington Post op-ed, Sebastian Mallaby agrees with Dr. Bookstaber that—in the wake of Bear Stearns—modern financial engineering has become harder to defend.

See more in United States; Corporate Governance; Financial Regulation

Op-Ed

Another Preemption Fight

Author: Sebastian Mallaby
Washington Post

Watching the global economy right now is a bit like watching the lead-up to the Iraq war—the risk presented by a festering threat has to be weighed against the risk inherent in preemptive action.  While it's impossible to know whether American activism or European immobility is correct because of the nature of the challenge, Sebastian Mallaby argues that the divergence in approaches on either side of the Atlantic is likely to stoke tensions.

See more in United States; Financial Crises

Events

The Stephen C. Freidheim Symposium on Global Economics

Staff: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics
May 12, 2009—Present

This endowed annual symposium was established in 2008 through the generosity of a gift from CFR member Stephen C. Freidheim, CIO and managing partner of Cyrus Capital Partners. The symposium addresses any of the broad spectrum of issues affecting Wall Street and international economics.

World Economic Update Series

Staff: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics
January 1, 2000—Present

A spirited exchange among chief economists and leading financial analysts, the WEU highlights the quarter's most important signals and emerging trends. Discussions cover changes in the global marketplace with special emphasis on current economic events and their implications for U.S. policy.

High-Level Roundtable Series on International Economics

Staff: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics
April 2010—Present

This roundtable series brings together senior financial experts from the private sector and the academic world to discuss ideas presented by a guest speaker on a pressing topic in international economics.

Roundtable on Global Economics

Director: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics
October 1, 2001—Present

This roundtable series brings together key players from the private markets, government, Federal Reserve, IMF, World Bank, and think tanks to discuss pressing policy issues in international economics. The group, which meets monthly, has so far discussed issues such as the impact of terrorism on economic prospects, the outlook for emerging markets, and U.S. trade policy.

CFR Events

General Meeting ⁄ New York

World Economic Update

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Symposium ⁄ New York

Session Two: The Federal Reserve—Looking Back and Forward

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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Corporate Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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Corporate Meeting

World Economic Update

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Corporate Meeting

Foreign Affairs Media Call on the Nomination of Janet Yellen to Chair the Federal Reserve

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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Conference Panel Session

An Overview of the Global Debt Crisis

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Corporate Meeting

Listen-Only Teleconference: Can the Eurozone be Rescued?

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General Meeting ⁄ New York

World Economic Update

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Corporate Meeting

Listen-Only Teleconference: World Economic Update

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Corporate Meeting

CFR Call: Debt Crisis Implications

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Corporate Meeting

World Economic Update

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ Washington

Charter Cities: New Options for the Bottom Billion

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General Meeting ⁄ New York

World Economic Update

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Conference Panel Session

Currency Wars, Capital Controls, and the Outlook for the International Monetary System

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Conference Panel Session

Currency Wars, Capital Controls, and the Outlook for the International Monetary System

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Academic Conference Call

The History of Hedge Funds

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Conference Panel Session

The United States and Japan Looking Forward: New Opportunities, New Synergies, New Challenges

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ New York

More Money Than God: Hedge Funds and the Making of a New Elite

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General Meeting ⁄ Washington

"More Money than God: Hedge Funds and the Making of a New Elite"

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Corporate Meeting ⁄ New York

Risk Spotting at Bloomberg

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General Meeting ⁄ New York

World Economic Update

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General Meeting ⁄ Washington

Reforming Global Finance: The Squam Lake Papers

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Conference Panel Session

The Global Consequences of the Crisis

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Conference Panel Session

The United States and the Future of Global Governance: The Financial Crisis and Global Financial and Monetary Cooperation

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General Meeting ⁄ Washington

The President's Inbox: Asia and the Economy

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Corporate Meeting

The Financial Crisis: Long Term Implications

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Corporate Meeting

Wall Street in Crisis

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Conference Call ⁄ New York

New York Telephone Conference Call: Wall Street in Crisis

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General Meeting ⁄ Washington

Global Economic Trends: The Credit Crunch

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Academic Conference Call

Update on the Global Economy

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Symposium ⁄ Washington

A Foreign Policy Mandate? Thirty Years of Oil and Gas (Session 1)

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Symposium ⁄ Washington

The Range of the Possible: Energy Alternatives in the Market (Session 2)

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Symposium ⁄ Washington

What Next? Government Action and the Policy Puzzle (Session 3)

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Symposium ⁄ Washington

Energy Policy and the Search for Alternatives: Keynote Address (Session 4)

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General Meeting ⁄ Washington

Funding an Energy Revolution? Ethanol and Energy Security

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General Meeting

The World's Banker and the World's Poor: A Complex Relationship

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Press/Panels