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
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
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
“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
-March 7, 2013