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After the Crash

The Future of Finance

edited by Yasuyuki Fuchita, Richard J. Herring, and Robert E. Litan

Publication Year: 2010

As the global economy continues to weather the effects of the recession brought on by the financial crisis of 2007–08, perhaps no sector has been more affected and more under pressure to change than the industry that was the locus of that crisis: fi nancial services. But as policymakers, fi nancial experts, lobbyists, and others seek to rebuild this industry, certain questions loom large. For example, should the pay of fi nancial institution executives be regulated to control risk taking? That possibility certainly has been raised in offi cial circles, with spirited reactions from all corners. How will stepped-up regulation affect key parts of the fi nancial services industry? And what lies ahead for some of the key actors in both the United States and Japan?

In After the Crash, noted economists Yasuyuki Fuchita, Richard Herring, and Robert Litan bring together a distinguished group of experts from academia and the private sector to take a hard look at how the fi nancial industry and some of its practices are likely to change in the years ahead. Whether or not you agree with their conclusions, the authors of this volume —the most recent collaboration between Brookings, the Wharton School, and the Nomura Institute of Capital Markets Research —provide well-grounded insights that will be helpful to fi nancial practitioners, analysts, and policymakers.

Published by: Brookings Institution Press

Front Cover

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Copyright Information

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Preface

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pp. vii-viii

In 2004 the Brookings Institution joined with Nomura Institute of Capital Markets Research to showcase research on selected topics in financial market structure and regulation of interest to policymakers, scholars, and market practitioners in the United States and Japan, as well as elsewhere. Initially led by Brookings senior fellow Robert E. Litan and Yasuyuki Fuchita, senior managing director of Nomura Institute of Capital Markets Research, the collaboration ...

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1. After the Crash: Will Finance Ever Be the Same?

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pp. 1-9

The financial crisis of 2007-08, which led to what is now known as the Great Recession of 2008-09, will go down in history as one of the most troubling economic events of the postwar era. Although some prescient analysts forecast that the housing bubble in the United States, which triggered the crisis, eventually would burst, we suspect that few foresaw the crisis bringing the United States and other global economies nearly to their knees. Certainly, ...

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2. The Uncertain Future of U.S. Commercial Banking

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pp. 11-51

Commercial banking in the United States since about 1930 has for the most part been a simple business, with adequate but not particularly attractive returns to shareholders. Then for a golden decade, between the early 1990s and the first half of the 2000s, it outperformed, offering high and stable returns to shareholders and accounting for an increasing share of corporate profits.At the time, few sought to identify the confluence of factors that led to such ...

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3. Regulatory Changes and Investment Banking: Seven Questions

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pp. 53-81

Work is currently going on under the auspices of the Group of Twenty (G-20) to reform the international financial system to prevent a recurrence of the present global financial crisis. The G-20 identifies the root causes of the crisis and voices its concern about financial sector practices as follows: "During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an ...

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4. The Future of the Hedge Fund Industry

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pp. 83-113

Examinations of the future of hedge funds are daunting tasks, not in the least because understanding hedge funds is still a subject of intense academic, industry practitioner, regulatory, and legislative examination. Even the very definition of a hedge fund defies easy characterization, an unusual irony given that, at least for the foreseeable future, hedge funds stand a substantial chance of remain-Perhaps the clearest definition of a hedge fund may be that it is a simple ...

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5. Is There a Case for Regulating Executive Pay in the Financial Services Industry?

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pp. 115-140

Since at least as early as the 1950s, the press, the general public, politicians, and academic researchers have remarked on the high levels of pay in the United States for the chief executive officers of corporations. These observers question whether these pay levels are fair and whether incentive structures are appropriate.1 As an example of this view, shortly after his election in 1992, President Bill Clinton signed Internal Revenue Code section 162(m), which ...

Contributors

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pp. 141-

Index

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pp. 143-150

Back Cover

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E-ISBN-13: 9780815704294
E-ISBN-10: 0815704291

Page Count: 150
Publication Year: 2010

Research Areas

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Subject Headings

  • Financial institutions.
  • Financial institutions -- Deregulation.
  • Financial services industry.
  • Financial crises -- United States -- 21st century.
  • Financial futures.
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