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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:
2013-2014 No Free Lunch Seminar Series
Emi Nakamura, Associate Professor of Business presents Is China Slowing?
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
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
April 18, 2014The No Free Lunch April 15 recordings are now available
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
July 22, 2014Professor Charles Calomiris discusses the Export-Import Bank in the Tampa Bay Times
July 17, 2014Professor Andrew Ang's research on portfolio rebalancing is cited by the Wall Street Journal
July 14, 2014Professor Charles Calomiris discusses his book, "Fragile by Design: The Political Origins of Banking Crises and Scarce Credit" in The Actuary
July 8, 2014Executive Advisory Board Member Evan Picoult will speak at The Financial Industry in a Post-Crisis World Symposium in Washington, DC on July 10
June 26, 2014Professor Andrew Ang is cited by Top 1000 Funds for his research titled "Asset Allocation and Bad Habits"
June 24, 2014Executive Advisory Board Member Evan Picoult will speak at the Workshop on Hypothetical Portfolio Exercises (HPEs) in London, England on June 26
June 20, 2014Professor Mark Broadie will discuss his book "Every Shot Counts" at the Columbia Business School Alumni Club in Philadelphia, Pennsylvania on June 24
June 19, 2014Professor Charles Calomiris discusses economic and fiscal views of Greece on Bloomberg TV
June 18, 2014Professor Paul Glasserman spoke at the 49th Annual Conference of the Western Finance Association in Monterey Bay, California
June 17, 2014Executive Advisory Board Member Evan Picoult will speak at the Global Risk Regulation Summit in Miami, Florida, June 16-20
June 16, 2014Executive Advisory Board Member Tracey Travis presented at the Sanford C. Bernstein Strategic Decisions Conference in New York, NY
June 10, 2014Congratulations to Executive Advisory Board Member Laurie Girsky for being an inaugural honoree at the First Annual Dare to Dream Benefit in New York, NY
June 6, 2014Professor Charles Calomiris will provide the keynote address at the International Banking: Microfoundations and Macroeconomic Implications conference in Amsterdam, The Netherlands, June 12-13
June 5, 2014Professor Wei Jiang discusses CEO options in Columbia Ideas at Work
June 4, 2014Professor Charles Calomiris authors “A Better Solution for Too-Big-to-Fail Banks” in the Wall Street Journal
June 3, 2014Professor Andrew Ang presented on private equity returns at the World Investment Forum 2014 in Sea Island, Georgia
June 2, 2014Professor Chris Mayer's research on the housing market is highlighted in the Paul Milstein Center for Real Estate's Spring Highlights. Watch Professor Mayer talk about his research in the February 2014 No Free Lunch Seminar
May 30, 2014Professor Andrew Ang reviews Norway's sovereign wealth fund in Columbia Ideas at Work
May 27, 2014Professor Paul Glasserman will moderate at the June 26th Columbia University Symposium on the Management of Systematic Risk in Finance
May 22, 2014Executive Advisory Board member Candace Browning serves as a Global Ambassador for Vital Voices Global Partnerships
May 21, 2014Professor Paul Glasserman presents at the Humboldt Distinguished Lecture Series in Applied Mathematics
May 20, 2014Professor Christopher Mayer is cited by the Wall Street Journal about home ownership
May 19, 2014Congratulations to Professor Amit Khandelwal on being awarded the 2014 George S. Eccles Research Award. Watch Professor Khandelwal talk about his research on trade liberalization at the April 2013 No Free Lunch Seminar
May 15, 2014Professor Charles Calomiris discusses political origins of banking crises on the Goldstein on Gelt Show
May 13, 2014Professor Andrew Ang discusses illiquidity premiums at the CFA Society Toronto 2014 Annual Pension Conference
May 12, 2014Professor Mark Broadie discusses sabermetrics on The Golf Club
May 5, 2014Executive Advisory Board member Evan Picoult will speak at the Professional Risk Managers' International Association (PRMIA) May 6 meeting
May 2, 2014Professor Andreas Mueller’s research on long-term unemployment is highlighted in Columbia Ideas at Work
April 30, 2014Professor Suresh Sundaresan will speak at the first credit market research conference jointly organized by Moody's and the Shanghai Advanced Institute of Finance (SAIF)
April 28, 2014Professor Mark Broadie discusses performance measurement in Columbia Ideas at Work
April 24, 2014Professor Charles Jones discusses high frequency trading in The Christian Science Monitor
April 22, 2014Professor Andrew Ang's research on factor investing is highlighted in Pensions & Investments
April 9, 2014Professor Andreas Mueller’s research on long-term unemployment is highlighted in the Wall Street Journal. Watch Professor Mueller talk about his research at the April 2013 No Free Lunch Seminar
April 8, 2014Executive Advisory Board member Candace Browning is speaking on a Reunion 2014 panel this Friday on the future of women in business
March 31, 2014Executive Advisory Board member Nicholas Galluccio discusses U.S. small-caps in the aerospace industry on Business News Network