{"id":99,"date":"2009-05-29T21:04:34","date_gmt":"2009-05-29T19:04:34","guid":{"rendered":"http:\/\/fromlet.bbsresearch.se\/?p=99"},"modified":"2009-05-29T21:04:34","modified_gmt":"2009-05-29T19:04:34","slug":"reforming-the-international-financial-system-by-regulation-or-collaborative-arrangements-speech-at-the-transatlantic-consortium-colloquium-repositioning-europe-and-america-for-growth","status":"publish","type":"post","link":"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99","title":{"rendered":"Reforming the International Financial System by Regulation or Collaborative Arrangements? &#8211; Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009"},"content":{"rendered":"<div><\/div>\n<div><span style=\"EN-US\"><\/span><\/div>\n<p><span style=\"EN-US\"><span style=\"Calibri\"><\/p>\n<p class=\"MsoNormal\" style=\"78.0pt\"><span style=\"EN-US\"><span style=\"Calibri\"><strong><em>Summary<\/em><\/strong><\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"78.0pt\"><span style=\"EN-US\"><span style=\"Calibri\">Generally<span style=\"red\"> <\/span><span style=\"black\">speaking, the main<\/span> impediments to well-working regulations and collaborative agreements come from human behavior (psychology). The current global financial and economic crisis can to a <span style=\"black\">great extent be attributed to<\/span> phenomena like greed, abuse of incentives, performance pressure (\u201cangst\u201d), overconfidence, neglect of historical experience, etc. Without improved research \/ interest for behavioral finance and understanding of this exciting scientific orientation, financial regulations will <span style=\"black\">be continually limited in<\/span> their efficiency. The \u201chomo oeconomicus\u201d has disappeared from global financial markets.<\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"0cm 0cm 10pt\"><span style=\"EN-US\"><span style=\"Calibri\">Another important step forward is the recognition that regulations should be completely designed for giving the right incentives to players on financial markets. \u201cPerverse incentive structures\u201d \u2013 as Rajan calls one of the main characteristics of the current crisis \u2013 should not exist anymore in the future regulatory framework.<span style=\"yes\">\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"3.0cm\"><span style=\"EN-US\"><span style=\"Calibri\">Collaborative agreements make sense in certain cases, for example, on an international basis between public institutions. History of financial markets, however, has demonstrated many times that collaborative agreements between banks and public institutions &#8211; according to their design \u2013 <span style=\"black\">many times cannot work<\/span> as a powerful instrument for a long time. <\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"0cm 0cm 10pt\"><span style=\"EN-US\"><span style=\"Calibri\">Instead, it would make sense to raise the status of collaborative agreements. This could be achieved by including certain agreements as conditions for \u201cgood corporate governance\u201d.<span style=\"yes\">\u00a0 <\/span>Such a change could be made efficient by demanding comments <span style=\"black\">from banks on<\/span> certain collaborative rules they should follow carefully on a regularly basis in their quarterly or annual reports. In other words: Much more pressure should be put on banks\u2019 performance in corporate governance. And the press should write more about it. <\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"0cm 0cm 10pt\"><span style=\"EN-US\"><span style=\"Calibri\">Whatever regulatory or collaborative changes we are talking about, one extremely important precondition for \u2013 hopefully \u2013 (somewhat) declining future financial risks should be mentioned particularly:<span style=\"yes\">\u00a0 <\/span>increased transparency, demanded by regulators and central banks. This need cannot be stressed sufficiently. Innovations in the past such as Structured Investment Vehicles (SIVs) and conduits must be made much more transparent than<span style=\"red\"> <\/span>has been the case in recent years \u2013 but the quality of <span style=\"black\">credits must also be made more transparent.<\/span> Supervision should become much more active in this respect. By the way China should join <span style=\"black\">the path to increased<\/span> financial transparency as well \u2013 as it underwrote this spring in the communiqu\u00e9 of the London G20-summit.<\/span><\/span><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"277.25pt\"><a href=\"http:\/\/www.bbs.hik.se\/resurser\/dokument\/fromlet\/JIBS__B_Speech_Spring_2009_final.pdf\" target=\"_blank\">Read the complete document<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Summary Generally speaking, the main impediments to well-working regulations and collaborative agreements come from human behavior (psychology). The current global financial and economic crisis can to a great extent be attributed to phenomena like greed, abuse of incentives, performance pressure (\u201cangst\u201d), overconfidence, neglect of historical experience, etc. Without improved research \/ interest for behavioral finance [&hellip;]<\/p>\n","protected":false},"author":352,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-99","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Reforming the International Financial System by Regulation or Collaborative Arrangements? - Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009  - Baltic Business Research<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99\" \/>\r\n<meta property=\"og:locale\" content=\"sv_SE\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Reforming the International Financial System by Regulation or Collaborative Arrangements? - Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009  - Baltic Business Research\" \/>\r\n<meta property=\"og:description\" content=\"Summary Generally speaking, the main impediments to well-working regulations and collaborative agreements come from human behavior (psychology). The current global financial and economic crisis can to a great extent be attributed to phenomena like greed, abuse of incentives, performance pressure (\u201cangst\u201d), overconfidence, neglect of historical experience, etc. Without improved research \/ interest for behavioral finance [&hellip;]\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99\" \/>\r\n<meta property=\"og:site_name\" content=\"Baltic Business Research\" \/>\r\n<meta property=\"article:published_time\" content=\"2009-05-29T19:04:34+00:00\" \/>\r\n<meta name=\"author\" content=\"hubert\" \/>\r\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\r\n<meta name=\"twitter:label1\" content=\"Skriven av\" \/>\n\t<meta name=\"twitter:data1\" content=\"hubert\" \/>\n\t<meta name=\"twitter:label2\" content=\"Ber\u00e4knad l\u00e4stid\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minuter\" \/>\r\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99\",\"url\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99\",\"name\":\"Reforming the International Financial System by Regulation or Collaborative Arrangements? - Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009 - Baltic Business Research\",\"isPartOf\":{\"@id\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/#website\"},\"datePublished\":\"2009-05-29T19:04:34+00:00\",\"dateModified\":\"2009-05-29T19:04:34+00:00\",\"author\":{\"@id\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/#\/schema\/person\/ac4aba9641e918c080d4110e3b8b77a7\"},\"inLanguage\":\"sv-SE\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/#website\",\"url\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/\",\"name\":\"Baltic Business Research\",\"description\":\"Hubert Fromlet diskuterar den svenska och internationella ekonomin\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"sv-SE\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/#\/schema\/person\/ac4aba9641e918c080d4110e3b8b77a7\",\"name\":\"hubert\",\"url\":\"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?author=352\"}]}<\/script>\r\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Reforming the International Financial System by Regulation or Collaborative Arrangements? - Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009  - Baltic Business Research","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/blogg.lnu.se\/fromlet-bbsresearch\/?p=99","og_locale":"sv_SE","og_type":"article","og_title":"Reforming the International Financial System by Regulation or Collaborative Arrangements? - Speech at the Transatlantic Consortium Colloquium \u201dRepositioning Europe and America for Growth\u201d, J\u00f6nk\u00f6ping, May 29, 2009  - Baltic Business Research","og_description":"Summary Generally speaking, the main impediments to well-working regulations and collaborative agreements come from human behavior (psychology). 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