To anyone who has noticed that theParetoCommons has been dormant during the past six months I owe an explanation for the hiatus and my thanks for bothering to read this post after so much time. (Indeed, were it not for Jennifer’s boundless energy, the gap in time would be nine months, not six.)
A number of commitments in the spring, not least the production of articles and presentations and a good deal of teaching, supervision and foreign travel, crowded out much of my free time. More important, however, I have also been spending a good deal of time reading, listening, learning and reflecting on the state and many challenges of financial regulatory reform.
Its many good elements notwithstanding, the debate around Dodd-Frank has become atrophied. Battle lines have been drawn between two untenable approaches to the incredibly complex challenges of large scale finance regulation. On the one hand, attempts to defeat the new structures and processes initiated by Dodd-Frank in 2010 have amounted to unconstructive, knee-jerk defenses of industry by politicians who benefit from massive financial support by the industries they protect. On the other, some–though by no means all–of the Byzantine regimes being created by regulators as they try to implement the Act feel more like efforts to erect CYA shields using weapons designed for fighting old wars and ones that will be ineffective in dealing with current reality. So much of the public debate around financial reform has lately become stultifying and the Presidential election guarantees that this won’t change soon.
At the same time, we are still learning about the causes of, or at least the conditions for, financial instability. We are still seeing the predictable dysfunctions created by excessively sized financial institutions, unrealistic public policies–in the United States, Europe and elsewhere–and soundbite policies. The challenges posed by the global financial system that is our reality will require much more imaginative thinking in order to create a system that is effective and resilient over time.
In future posts I will try to focus on new ideas generated by research, interdisciplinary sciences and thoughtful commentary. My posts will generally be shorter than they have been in the past and, I hope, more thought provoking. I will also provide brief summaries of my own research. If I can find a suitable new template, I might even change the theme and layout for this blog.
As always, I will welcome comments and controversy, provided it is not the tired old vituperations we see repeated still all over the media.