A Historical Perspective on the Challenge of Regulating Large Banks
Time & Place
Mon, 17 Jul 2017 17:30:00 NZST in LAW 108 Lecture Theatre, Business and Law Building, University of Canterbury
All are welcome
From the start of the National Banking Era in the United States in 1864 through the financial reforms of the Great Depression, commercial banks in the United States were heavily involved in lending to support activities in securities markets and financial crises were a relatively frequent occurrence. Bankers themselves and regulators struggled to find restrictions on banking that would insulate the banking system from panics in securities markets without severing the links between the banking system and securities markets. After the Crash of 1929, regulators gave up and severed those links. By the time of the financial crisis of 2008, these links had grown back, and we all rediscovered the risks that arise from links through money markets between banks and securities markets. This talk will review the magnitude of U.S. banks' involvement in securities markets over the past 100 years, the history of regulatory responses to crises arising from that involvement, and what we can learn from newly collected data on the activities that are being financed in securities markets. The challenge of regulating large banks going forward lies in finding regulations that will insulate banking from panics in securities markets without fully severing the links between the two.
In this lecture, Professor Atkeson reviewed the magnitude of U.S. banks' involvement in securities markets over the past 100 years, the history of regulatory responses to crises arising from that involvement, and what we can learn from newly collected data on the activities that are being financed in securities markets.
- See youtube video here
Andrew Atkeson is the Stanley M. Zimmerman Professor of Economics and Finance. He has held positions at the University of Chicago, the University of Pennsylvania, the University of Minnesota and the Federal Reserve Bank of Minneapolis before moving to UCLA in 2000. He has published papers in the American Economic Review, Econometrica, the Journal of Political Economy and the Quarterly Journal of Economics. He is has been awarded nine NSF grants and has been an Associate Editor of the American Economic Review, Review of Economic Studies and Quarterly Journal of Economics. His research spans a variety of topics in macroeconomics, including the sustainability of international debt, the design of monetary policy and the measurement of the firm solvency.