Conference Explores New World on Wall Street
In the aftermath of well-publicized scandals in recent years, Wall Street firms have seen their credibility with investors fall and have been taken to task by legislative, regulatory, and judicial authorities. Newly enacted or proposed regulations seek to institute more control over these firms’ business practices and reporting processes.
What effect will the new and proposed regulations have on Wall Street firms? That question was debated by participants, including financial industry practitioners, academics, and regulators, at the Federal Reserve Bank of Atlanta’s 2004 Financial Markets Conference, titled “Wall Street Against the Wall: Transparency and Conflicts of Interest.” Among the speakers at the conference, held on Sea Island, Ga., in mid-April, were Alan Greenspan, chairman of the Federal Reserve Board; William McDonough, chairman of the Public Company Accounting Oversight Board; Richard Baker, U.S. congressman; and Gerald Corrigan, a managing director with Goldman Sachs.
Considering reforms’ effects
Academic and policy papers presented and discussed at the conference examined several important considerations facing financial firms—including mutual funds, investment banks, and stock exchanges—as well as regulators as reforms are established and enforced.
Adding knowledge and depth to the debate at the conference were a number of respected names in the financial world, including John Bogle, founder of the Vanguard Group; Henry Kaufman, president of Henry Kaufman & Co. Inc.; Cynthia Glassman, commissioner of the Securities and Exchange Commission; Paul Bennett, chief economist for the New York Stock Exchange; and Bernard Madoff, chairman of Bernard L. Madoff Investment Securities.
The right amount of regulation
Conference participants discussed the amount of regulation necessary to protect investors without severely limiting financial trade.
In his remarks, Fed Chairman Alan Greenspan weighed in on this issue, stating that there’s “no better antidote for the business and financial transgressions of recent years” than to reward trust and integrity in the marketplace. He cautioned that lawmakers and regulators must “be careful not to undermine the paradigm that has so effectively governed voluntary trade. Rewriting rules that have served us well is fraught with the possibility for collateral damage.”