The Clearing House's Annual Conference provides a forum for the industry's leaders to examine the bank regulatory and payments landscape in the post-Dodd-Frank era. With two and half days of high-level keynote speakers, in-depth expert panels, and built-in time for networking, there are many opportunities for significant brand exposure and to engage with senior level bank executives on today's most pressing issues for commercial banks.
Morrison & Foerster Partner Oliver Ireland will moderate a panel entitled “Can Market Discipline Help Make Banks and the Financial System Safer?” on day three of the conference.
Our economic and financial system operates on the principle of letting market forces, rather than the government, dictate the economic decisions of businesses and households whenever possible. Under this model, government intervention is only called for when there is a market failure. In banking, though, regulation and supervision are necessitated by the short-circuiting of market prices caused by deposit insurance and by the externalities associated with bank distress or failure along with the associated belief that some banks are too big to fail. Recently, however, ongoing efforts to ensure that any bank can fail in an orderly manner without outsized externalities as well as new requirements that banks fund themselves in part with longer-term debt that can be converted into equity if necessary have opened up new possibilities for making use of market forces rather than government dictates in banking. This panel explores how, in light of these changes as well as new academic thinking, regulation and supervision could be revised to entail a lighter touch from government and a greater role for market discipline to provide for systemic stability.