Broome and Omarova Lead National Financial Regulation Conference

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Lissa Broome
Saule Omarova

Speakers and panelists who attended a UNC School of Law Center for Banking and Finance co-sponsored conference in Washington, D.C, achieved what some believe Congress has seemed unable to accomplish: substantive discussion on financial regulatory reform.

The only politics involved in the conference were in the name of the event Feb. 7-8 — “The Political Economy of Financial Regulation,” held at George Washington University Center for Law, Economics & Finance, a co-sponsor, along with UNC Law’s Center for Banking and Finance, the Insurance Law Center at the University of Connecticut School of Law and the Institute for Law and Economic Policy.

Participants examined such issues as the regulatory capture of agencies by regulated entities, or private interest groups using undue influence on the policies and conduct of regulatory agencies.Among other issues highlighted werethe effects of the increasing income disparity in the U.S. on financial regulation, alternative regulatory structures and policies, and the direction of financial regulation after the 2012 election. Economists, judges, legal scholars, regulators and others discussed how the political process affects financial services regulation and how money affects both.

Financial regulation reform is crucial to the economy. “It will determine whether we allow financial institutions to become too big to fail, how we ensure access to credit by responsible borrowers, and how we ensure that the next crisis does not occur,” says Lissa Broome, Wells Fargo Professor of Banking Law and director of the Center for Banking and Finance, which helped plan the conference.

“We have to ‘fix’ our financial system before the economic, social and political fabric of American society is destroyed. The financial system affects every aspect of national life, in ways that are not always well understood by the public, and narrow private interests exploit this lack of natural public participation in making important but technical policy decisions in this area. One of the key motives for our conference was the recognition of the urgent need to change that, and to bring the public interest more directly and explicitly into the process of financial regulation reform—and the policy-making process more generally,” says Saule Omarova, UNC assistant professor of law.

Omarova conceived the idea for the conference after talking with a colleague. She says she realized “the biggest impediment to getting the financial regulation reform right was the seeming inability of Congress to move beyond the narrow agenda, largely set or influenced by the financial services industry.”

Other chief issues discussed included fixing the campaign finance system, which generally supports regulatory and policy goals favored by big banks; instituting pre-market approval for financial products; and providing financial services in a more public-minded way, says Omarova, a panel moderator.

Keynote speakers were Simon Johnson, the Ronald Kurtz Professor of Entrepreneurship at MIT Sloan School of Management, who co-authored “13 Bankers,” and Michael Barr of the University of Michigan School of Law, and former Assistant Secretary of the Treasury for Financial Institutions.

“This conference helped the Center for Banking and Finance to highlight its role in leading important policy discussions regarding financial regulation and gave us exposure in Washington, D.C.,” says Broome, also a panel moderator.

Conference papers will be published in October in a special issue of the North Carolina Banking Institute Journal. The special issue may be ordered by emailing

-March 7, 2013

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