As federal regulators flesh out financial reform specifics, questions remain about how the Volcker Rule--aimed at preventing banks from taking overly risky bets--will work, and whether it will make the financial system safer.
Lael Brainard, undersecretary for international affairs at the U.S. Department of Treasury, outlines the discussion between President Obama and President Hu Jintao, as well as the effect of the financial regulatory reform on the international agenda at the treasury for the upcoming year.
This meeting was part of the C. Peter McColough Series on International Economics.
Lael Brainard, the undersecretary for international affairs, U.S. Department of the Treasury, discusses the economic agenda for Chinese President Hu Jintao's visit and the future role of the G-20 in the international economic arena.
Chairman of the Economic Recovery Advisory Board Paul Volcker argues that, in order to minimize the risks of financial institutions' moral hazard, banks must be "free to fail" and prohibited from proprietary trading, running hedge funds, and engaging in potentially risky activities.
Simon Johnson, former chief economist at the International Monetary Fund and current Ronald A. Kurtz professor of entrepreneurship at MIT, suggests that Obama's supposedly "centrist" approach to financial reform is actually quite conservative, while real reform is being driven from the center by Gary Gensler, Mary shapiro, and Elizabeth Warren.
Author: Squam Lake Working Group on Financial Regulation
Runs by prime-brokerage clients and derivatives counterparties were a central cause of the global financial crisis. These runs precipitated the failures of Bear Stearns and Lehman Brothers by substantially reducing the broker's liquidity. This Working Paper, the ninth in the Squam Lake series distributed by the Greenberg Center for Geoeconomic Studies, argues for higher regulatory liquidity requirements for dealer banks that use assets of clients and counterparties as a source of liquidity.
Congress' call for a new federal agency to oversee insurers still relies too heavily on ill-equipped state regulators to stem risks posed by bond insurers, traders, and reinsurers, writes CFR's Marc Levinson.
Speaker: Robert E. Diamond Presider: Maria Bartiromo
This meeting is part of the CEO Speaker Series. This series provides a forum for leading global CEOs to share their priorities and insights before a high-level audience of CFR members. The series aims to educate the CFR membership on the private sector's important role in the policy debate by engaging the global business community's top leadership. Members benefit from hearing CEOs' perspectives as well as interacting with them in an informal setting; in turn, CEOs have the opportunity to highlight the work of their organization and strengthen their relationship with CFR.
The Council on Foreign Relations' David Rockefeller Studies Program—CFR's "think tank"—is home to more than seventy full-time, adjunct, and visiting scholars and practitioners (called "fellows"). Their expertise covers the world's major regions as well as the critical issues shaping today's global agenda. Download the printable CFR Experts Guide.