Monday, 23 March 2009

Conferences on financial regulation (London) and securities law (Cambridge)

Last week I attended two very interesting conferences: the first one was on Reforming the Global Architecture of Financial Regulation: What are the crucial steps? and organised by the London School of Economics and Deutsche Bank (flyer available here); and the second one was on Civil Enforcement in Securities Law at the University of Cambridge (information available here). A lot could be said about either of them, but I’ll restrict myself to a few sketchy comments about the former: Raghuran Rajan presented a version of his paper on the causes and remedies of the credit crisis (available here). The discussant was William White from the OECD who, generally speaking, agreed with him but emphasised that the starting point was not only credit because “reckless spending led to reckless lending”. Markus Brunnermeier’s talk merged (at least) two of his papers (available here and here), in particular, suggesting a reform of how risk is calculated. Matt King (from Citigroup) presented data to show that “the problems are worse the reported in newspapers”, which, however, was disputed by the other participants. Conversely, the statement by the hedge fund manager Alan Howard that hedge funds only have a small contribution to systemic risk was surprisingly left largely unchallenged. Peter Praet from the National Bank of Belgium talk on risk management emphasised that it was not “pure recklessness” but simply that “banks did not understand the risks”. The much awaited talk by Josef Ackermann carefully avoided any sweeping statements; perhaps the most interesting sentence was that “we rescue banks that don’t deserve to be rescued” (which may sound ok now, but what if the Deutsche Bank itself gets into troubles?). My final scribbles (before I was heading to Cambridge) are that “banks are international in life but national in death” (Charles Goodhard) and that “the solutions to some of the toxic assets are as complicated as the toxic assets themselves.” (Gillian Tett).

Saturday, 14 March 2009

The DCFR in one picture

I just copied the text of the DCFR (for non-Europeans: that’s essentially the draft for a future “European Civil Code”) into Wordle (“a toy for generating ‘word clouds’ from text that you provide. The clouds give greater prominence to words that appear more frequently in the source text.”). That’s the result of the top 50 words:
A few sketchy observations: (1) Frequently the terms “reasonable” and ”reasonably” are used – so the crucial question will be how these terms will be applied. (2) Many terms indicate the “civilian origins” of the Code: e.g. (non-)performance, obligation(s), right. (3) The terms “information”, “damages” and “security” show how parties are protected. (4) The concept of consumer protection is an important part of the DCFR.

Tuesday, 10 March 2009

Is a good to be an academic in the UK?

In today’s Times (article here) it is argued that it isn’t any more. For instance, the article says that “we have a peculiarly negative attitude to academic success”, that there is a “diminishing role of the academic in Britain” (whereas in the US and France there is a better connection between public life and academia), that “becoming an academic is such an unappealing career”, that academics “are paid a pittance” and that “universities are told to cut back even further on original research projects”.

Is this grim picture accuracte? Just for the record, I wouldn’t mind a higher salary and more time and funding for my (obviously) highly original research projects. Apart from that, I beg to disagree. A few sketchy points: (1) In today’s economic climate the job security that most full time academics enjoy in the UK cannot be underestimated. (2) A year ago we received 70 applications for a lecturership – so it doesn’t appear to be an unpopular profession. (3) As mentioned earlier (here), the fact that UK universities attract many foreign academics is also a counter-indicator. (4) Comparing the UK and Germany, I find it amazing how often academics appear on TV and Radio in the UK. (5) And comparing the present and the past, the growing number of academics indicates a dynamic development with high quality research not limited to a few old universities.