Financial regulation in the spotlight at Business School conference

The need to understand and regulate financial instability was the focus of a conference yesterday attended by key figures in the financial community.

The conference was organised by the Brevan Howard Centre for Financial Analysis and the Centre for Economic Policy and Research (CEPR) and was attended by around 100 guests from leading business schools, universities, the Bank of England and other financial institutions from around the world. Delegates gathered to discuss the future of the financial market and what needs to be done to create better models for regulation, focussing on banking, the long term financing of industry, insurance, real estate and household finance.

Professor Franklin Allen, Executive Director of the Brevan Howard Centre, said: “Following the turmoil of the financial crisis, there remains a need for better understanding of financial stability and regulation, which underpins much of the research of the Brevan Howard Centre. This conference was a fantastic opportunity to bring together leading businesses and scholars from across the world to discuss the need for better regulation and the key financial challenges that affect the global economy.”

One of the panel discussions, chaired by Enrico Perotti, Professor of International Finance at the University of Amsterdam, focused on the need for better regulation of banks around the world.

Panellist Elena Carletti, Professor of Finance at Bocconi University, said: “There needs to be a lot more focus on financial stability across the whole system and a review of the structure of policy-making, as these areas are intertwined.”

She recommended a number of ways in which countries could better manage financial risk, including tighter regulation of banks and encouraging better sharing of data and information between banks, so that risks could be identified much earlier.

Fellow panellist Thomas Huertas, Partner in the Finance Services Risk Practice division at Ernst and Young, spoke of the importance of banks to economic prosperity. Reflecting on recent scandals in the banking sector including insider trading and libor rigging, he argued that there was a need for reforms which would work, outlining the failure of the G20 summit to achieve this.

The conference was opened by a keynote speech from Hyun Song Shin, Economic Adviser and Head of Research of the Bank for International Settlements and a former advisor to organisations including the Bank of England and the International Monetary Fund, who discussed the latest research on financial stability, including a look at the relationship between banks and borrowers.