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Tomorrow’s Finance: Regulation – but is it effective? The next financial crisis and how to avoid it

2nd July 2012 @ 8:00 am - 5:00 pm

Venue: Ironmongers’ Hall, Shaftesbury Place, Barbican, London, EC2Y 8AA

 Tomorrow’s Finance is a programme of lectures and other events being organised by Tomorrow’s Company in partnership with MAM Funds plc – we are inviting some of the most senior and thoughtful figures from and about finance to consider what is the purpose of finance and is the finance sector fit for purpose?  The lectures will be challenging, often controversial, and always stimulating and enjoyable.

To give our second Tomorrow’s Finance lecture we have invited David Pitt-Watson, Chair of Hermes Focus Asset Management. As well as being a noted investor, David is a leading thinker on issues of corporate governance, capital market integrity and regulation, having also authored The New Capitalists, published by Harvard, which describes how a “civil economy” can emerge in the economic sphere, mirroring civil society in the political sphere. David is one of the most respected leaders in investment markets – he is the former head of all Hermes shareholder activist activities and has had a prominent career as a City investor and as a senior strategic advisor.

Over the last few years he and his colleagues, Stephen Davis of Yale University, and Jon Lukomnik of the IRRC Institute, have extended their work to consider how markets, institutions and regulations interact to create effective and safe financial markets, or indeed the opposite. We have asked David to reflect on the extent to which the regulation introduced since the 2008 crisis has, and will be adequate, to stop the next one. Will the prescriptive regulations applied across the globe be sufficient? Or do we need to think differently about how we regulate the system?

In the past David and his colleagues have argued that reducing finance to a series of mathematical models is limiting, and can allow the creation of a false sense, both of the efficiency of the system, and of its stability. That in every other body of science we have moved away from a reductionist view. Yet in the micro regulation of capital markets we have allowed the creation of ever more complex models. We therefore run the danger, as Taleb would argue, that we are not addressing instability or identifying the conditions necessary to prevent another crisis – we’re rather drawing up the contours of the next crisis.

The question is, what alternative is there? In this keynote lecture, David will reflect on what makes financial markets effective and stable, whether those conditions currently apply in global capital markets, and if not how we might rethink our approach to regulating them.

The lecture and the following debate will interest anyone who is concerned with the future of our financial industry, and particularly those who regulate it, or seek to manage or influence its future.

The inaugural Tomorrow’s Finance lecture was delivered by James Featherby, author of ‘The White Swan Formula’ and Chair of the Church of England Ethical Investment Advisory Group, on the 14th of May at Gresham College.  In this important lecture, ‘Of Markets and Men’, James raised thought provoking points about how finance has come to reflect Western thinking that is increasingly individualistic, reductionist, utilitarian, controlling and pragmatic and set out 5 key principles to change this. You can read it here.

Details

Date:
2nd July 2012
Time:
8:00 am - 5:00 pm