WASHINGTON, D.C. — Today the Better Markets Academic Advisory Board (BMAAB) hosted a daylong conference on the State of Economic and Financial Policymaking. The conference brought together academic, government, and private sector participants to discuss the current policy climate and uplift the best thinking on how to strengthen financial and banking systems, facilitate broad-based wealth creation, and grow the real economy in a way that can benefit all Americans.
In her keynote address entitled “The Autobahn and Private Markets,” Caroline Crenshaw, Commissioner of the U.S. Securities and Exchange Commission remarked that “As calls for retail investor access to private markets accelerate, I am concerned that we are headed for a high-speed collision – with Main Street retail investors left without airbags…[W]e are now increasingly exposing retail investors to dangerously bloated risks that they, and regulators, are not prepared to face.” Concerns shared by Crenshaw included the blurring of boundaries between public and private markets, the risks and current performance of private markets relative to public markets, and the SEC’s increasingly permissive and expansive approach to private markets.
Mark Zandi, Chief Economist for Moody’s Analytics, and Antonio Weiss, Former Counselor to the Secretary of the United States Treasury and Partner, SSW Partners LP, delivered a joint keynote address highlighting findings from their recent paper on private credit and systemic risk, arguing that the growing interconnectedness between private credit funds and other financial institutions can amplify financial instability. “Private credit is really a case study for a broader conversation about the provision of credit to the economy by non-bank financial intermediaries,” said Weiss.
“The shape of the financial system has shifted from where it was in the Great Financial Crisis, from a bank-centric hub-and-spoke system with the banks in the middle and everyone else around the periphery to more of a web, with private credit more central in that web,” said Zandi.
Jared Bernstein, Former Chair of the President’s Council of Economic Advisors and Senior Fellow, Center for American Progress, offered a closing keynote address that examined boom and bust financial cycles and the current amnesia of the causes and consequences of past crises. Bernstein pointed specifically to risks faced by everyday Americans and the larger economy when it comes to crypto and stablecoins. “I think what’s worrisome is the systemic risk when [crypto and stablecoin] gets embedded into the economy in ways that the lobby is kind of thrusting down everyone’s throat. The Genius Act is a good example,” Bernstein said. “But I think the seeds of its own destruction should be evident at some point within the next five years, such that it’s recognized for the highly risky, highly volatile, low-use case asset that it is.”
Additional conference panel discussions and presentations included analysis of crypto’s political economy; the threats to and future of the Federal Reserve; economic and financial policymaking on the Hill; the past, present, and future of financial stability; and how financial crises have led to the current economic climate. Conference participants included not only academics, but also representatives from government, civil society organizations, and private sector institutions.
“America needs a strong and stable financial system that supports the real productive economy, that creates jobs and small businesses, that generates broad based opportunity, security and prosperity, and that fuels rising living standards,” said Dennis M. Kelleher, Cofounder, President, and CEO of Better Markets. “That’s not what we have today, and too many hardworking Americans are being left behind. That’s why we brought together some of the country’s leading thinkers, scholars, and policymakers, to address the fundamental economic and financial challenges facing the country and to ignite real change for Main Street Americans.”
The full conference program and supporting resources can be found here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
