Robert Pozen, chairman of MFS Investment Management and a noted authority on corporate governance, delivered the keynote for “U.S. Financial Regulation After the Crisis,” a January 28 joint conference of the NYU School of Law and the NYU Stern School of Business hosted by the Pollack Center for Law & Business and the Jacobson Leadership Program in Law and Business.
A senior lecturer at Harvard Business School, former NYU Law professor, former vice chairman of Fidelity Investments, former secretary of economic affairs for Massachusetts Governor Mitt Romney, and former chairman of the Securities and Exchange Commission’s Committee to Improve Financial Reporting, Pozen set out in his speech to evaluate the efficacy of the government’s response to the crisis and determine how best to prevent or mitigate future crises.
Placing the roots of the crisis in excessive U.S. consumer spending and an international trade imbalance, Pozen pointed out that the U.S. budget deficit in the most recent fiscal year was roughly double that of any other year since World War II and that these issues needed to be addressed to help avert future crises. He also questioned the nature of the Federal Reserve’s involvement in attempting to save troubled corporations: “If we are going to solve this financial crisis and prevent future ones, we need to get the Fed back to its independent position and to have the Fed not be involved in these sorts of bailouts over and over again.” Pozen called for consistency in bailouts as well. “We in fact have no theory of ‘too big to fail,’” he said. “We have no coherent rationale, and we have no process.... What is the rationale by which we bail out institutions?”
Following Pozen’s keynote, a panel moderated by William Allen, Nusbaum Professor of Law and Business and director of the Pollack Center, delved further into post-financial crisis regulation. Weighing in were Geoffrey Miller, Stuyvesant P. Comfort Professor of Law and director of the Center for the Study of Central Banks and Financial Institutions; Matthew Richardson, Charles E. Simon Professor of Applied Economics and director of the Salomon Center at Stern; and Christopher Allen ’99, senior managing director of Resource America.
Posted on February 11, 2010