Lessons from the Two Most Recent Global Financial Crises and the Great Depression
- Date: Wednesday 17 November 2021, 16:00 – 17:00
- Location: Online
- Cost: free
Join us to hear Professor Emeritus Arthur E. Wilmarth, Jr. give an overview of his book, Dr. Virág Blazsek will then hold a discussion before opening the floor to a Q&A session.
In his recently published book (Taming the Megabanks, Oxford University Press), Professor Emeritus Arthur E. Wilmarth, Jr. argues in favour of a new Glass-Steagall Act. The Glass-Steagall’s structural separation of the banking, securities, and insurance sectors prevented financial panics from spreading across the U.S. financial system for more than four decades. Despite Glass-Steagall’s success, large U.S. banks pursued a twenty-year campaign to remove the statute’s prudential buffers. Regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, and Congress repealed Glass-Steagall in 1999. The United Kingdom and the European Union adopted similar deregulatory measures, thereby allowing universal banks to dominate financial markets on both sides of the Atlantic. In addition, large U.S. securities firms became “shadow banks” as regulators allowed them to issue short-term deposit substitutes to finance long-term loans and investments. Universal banks and shadow banks fueled a toxic subprime credit boom in the U.S., U.K., and Europe during the 2000s, which led to the Great Recession. Limited reforms after the Great Recession have not broken up universal banks and shadow banks, thereby leaving in place a financial system that is prone to excessive risk-taking and vulnerable to contagious panics. Professor Emeritus Arthur E. Wilmarth, Jr. argues that a new Glass-Steagall Act is urgently needed to restore a financial system that is less risky, more stable and resilient, and better able to serve the needs of our economy and society. The author recently published an article entitled, ‘The Pandemic Crisis Shows that the World Remains Trapped in a “Global Doom Loop” of Financial Instability, Rising Debt Levels, and Escalating Bailouts’, which will be discussed too.
Professor Arthur E. Wilmarth, Jr. was a member of the faculty of George Washington University Law School in Washington, D.C. from 1986 to 2020. He joined GW Law School’s faculty after spending 11 years in private law practice, including as a partner in Jones Day’s Washington office. He served as Executive Director of the Law School’s Center for Law, Economics & Finance from 2011 to 2014. Professor Wilmarth is the author of Taming the Megabanks: Why We Need a New Glass-Steagall Act (Oxford University Press, 2020), and co-editor of The Panic of 2008: Causes, Consequences, and Implications for Reform (Edward Elgar, 2010). He has published more than 40 law review articles and book chapters in the fields of financial regulation and American constitutional history. In 2005, the American College of Consumer Financial Services Lawyers awarded him its prize for the best law review article published in the field of consumer financial services law during the previous year. Professor Wilmarth has testified on financial regulatory issues before committees of the U.S. Congress and the California legislature. In 2010, he was a consultant to the Financial Crisis Inquiry Commission, the body established by Congress to report on the causes of the financial crisis of 2007-09. He is a member of the International Advisory Board for the Journal of Banking Regulation (Palgrave Macmillan). Professor Wilmarth received his B.A. degree from Yale University and his J.D. degree from Harvard University.
To discuss the issues covered in this recent book and the above article, join our webinar moderated by Dr. Steven Montagu-Cairns, Lecturer in Banking & Corporate Law at the University of Leeds School of Law. Professor Emeritus Arthur E. Wilmarth, Jr. will give an overview of his book, which will be followed by a discussion by Dr. Virág Blazsek, Lecturer in Commercial, Corporate and Banking Law at the University of Leeds School of Law, author of the book, Banking Bailout Law (Routledge U.S. & U.K., 2020). The discussion will be followed by a Q/A. Many of his publications can be downloaded free of charge through the Social Science Research Network at http://ssrn.com/author=292185.
All welcome. This is a free event that will be held via zoom, though registration is required via Eventbrite.