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B8347 Financial Crises and Regulatory Responses
B8347 Financial Crises and Regulatory Responses Course Description
There have been more than a dozen financial crises in the world since 1980, including six in the United States alone. Major financial disruption was averted until the crisis of 2007-09. What are the common elements among these crises, what are the differences? In some instances, crises have brought about significant regulatory reform. Yet how is it that financial crises seem to recur with such frequency? And recur despite regulatory
Using a mix of economics and law-related materials, we plan to address these themes:
1) Are financial crises foreseeable or unforeseeable? Do they arise from processes internal to the financial sector (such as the “leverage cycle”) or from external events, such as changes in the political landscape that change the terms of financial globalization?
2) Are there more or less stable structures for the financial system? The financial system aims to match suppliers of capital (savers) and users of capital (business users and consumers). From a stability point of view, is such financial intermediation better done through financial institutions or through markets?
3) Stable structures, part II: Is there an optimum firm size? Should certain financial market activities be combined (for efficiency and diversification) or separated?
4) Are we better off with rigorous schemes of crisis avoidance or efficient resolution mechanisms, if long periods of financial stability inevitably lead to increased leverage, asset price inflation and a resulting steeper crash? Perhaps we are better off by focusing
attention on mopping up smaller, more frequent crashes?
5) Do recurrent crises flow from the political constraints on optimum regulation? There are two facets to this question. First, is the desire of incumbent political leaders to promote reelection chances by producing economic growth or greater home ownership, which favors expansionary credit policies. Second, is the firm-level competition within the financial sector to protect and expand rents.
6) The financial environment is driven by the interplay of legislation, regulation, governance and monetary policy. To what extent can independent central bank intervention through monetary policy correct for legislative or regulatory debility?
7) Do the goals of differently tasked regulators conflict in a way that may undermine systemic stability? How does the disclosure focus of securities regulators fit with the safety and soundness goals of financial regulators, as evidenced for example in recent Bank of America and Merrill merger or the manipulation of Libor?
8) International coordination and its limits: do the concessions made to obtain sufficient national buy-in to achieve a widespread international regime (necessary to avoid freeriding) undermine the effectiveness of the international regulatory architecture? One example where this issue has arisen prominently in recent years is the zero risk-weighting on all OECD sovereign debt under the Basel accords.
Spring 2014 sections:
2014-2015 No Free Lunch Seminar Series
Martin Oehmke, Associate Professor of Finance and Economics, presents Credit Default Swaps
2013 Financial Studies Conference
Watch videos from our 2013 conference: "Navigating the Changing Landscape of Finance."
Columbia Business School
Uris Hall 809, 3022 Broadway
New York, NY 10027
October 15, 2014Registration for the Fourth Annual Program for Financial Studies Conference on November 7, 2014 is now open!
October 2, 2014The No Free Lunch September 30 recordings are now available
July 8, 2014If the recent New York Times article sparked your interest in James Gorman, watch this video of his keynote at our conference
May 12, 2014The Program for Financial Studies welcomes Melina Robbana as the first Program Director
December 20, 2013A transcript of James Gorman's keynote address from the Third Annual Program for Financial Studies Conference has been published in the Journal of Applied Corporate Finance
November 11, 2013The Third Annual Program for Financial Studies Conference was a great success. Videos and photographs of the event are now available
January 16, 2013The No Free Lunch Seminar Series has been heralded as a best practice by BizEd magazine
In the News
October 20, 2014Executive Advisory Board Member Nicholas Galluccio comments on the banking sector on CNBC
October 16, 2014Professor Martin Oehmke discusses credit default swaps in Columbia Ideas at Work
October 14, 2014Professor Mark Broadie is mentioned in Golf Analytics
October 13, 2014Executive Advisory Board Member Candace Browning discusses women's leadership in Young or Mature. BofA Empowers Women
October 9, 2014Professor Charles Calomiris will speak about the banking sector at Georgetown University in Qatar
October 8, 2014Professor Andrew Ang's pension research is cited in Chief Investment Officer
October 6, 2014Executive Advisory Board Member Christian Mariager will be the keynote speaker at the 2014 CBS MBA Alumni Society Anniversary in Frederiksburg, Denmark on November 1
October 1, 2014Professor Paul Glasserman will present Carnegie Mellon's 7th Nash Distinguished Lecture in Quantitative Finance in Pittsburgh, PA on October 6
September 29, 2014Executive Advisory Board Members Maliz Beams and Candace Browning are recognized in the Top 25 Most Powerful Women in Finance
September 22, 2014Professor Charles Calomiris comments on economic expansion on Bankrate.com
September 18, 2014Professor Andrew Ang's new website factorinvestingbook.com features his book "Asset Management: A Systematic Approach to Factor Investing"
September 16, 2014Professor Laurie Hodrick's op-ed on Alibaba's IPO is published in Fortune
September 11, 2014Professor Charles Calomiris' research on capital requirements is cited by the Bank of England
September 9, 2014Professor Mark Broadie spoke at the World Scientific Congress of Golf on September 5-7 at Griffith University in Queensland, Australia
September 8, 2014Professor Andrew Ang questions private equity returns in The Globe and Mail
September 4, 2014Professor Mark Broadie predicts outcomes of The Barclays Cup
September 3, 2014Executive Advisory Board Member Maliz Beams presented at the Sixth Annual Women Advisors Network Forum in Baltimore, MD on August 25-28
August 27, 2014Professor Paul Glasserman will present at the Conference on Credit Risk and Systemic Risk in Boston, MA on September 20th
August 25, 2014Executive Advisory Board Member Tom Vandever will present at the Columbia Business School Private Equity Program's "M&A Roundup: How the 2014 'Resurgence' is Impacting Private Equity" panel in New York, NY on September 16
August 21, 2014Professor Andrew Ang's book “Asset Management: A Systematic Approach to Factor Investing" is featured in Systematic Relative Strength
August 20, 2014Professor Charles Calomiris discusses the Federal Reserve on Bloomberg BusinessWeek
August 19, 2014Executive Advisory Board Member Nicholas Galluccio speaks about small cap equities on Business News Network
August 18, 2014Executive Advisory Board Member Candace Browning is cited by the Financial Post
August 13, 2014Professor Charles Calomiris discusses the Ebola outbreak in Africa on Bloomberg BusinessWeek
August 12, 2014Professor Suresh Sundaresan presented at the NSE-NYU Indian Financial Markets Conference in New York, NY on August 4-5th