Interdisciplinary Center Studies Financial System Fixes
New collaboration among schools meets One BU goal
Following the global banking crack-up, a new BU center will try to help pick up the pieces by corralling the University’s best financial brains to research, teach, and share insights.
The Center for Finance, Law and Policy (formerly the Morin Center for Banking and Financial Law at the School of Law) differs from its predecessor in one word: interdisciplinary. It complies with the unified-University model at the heart of President Robert A. Brown’s One BU strategic plan.
“We were studying financial services from a very narrow, legal perspective,” says Cornelius Hurley, director of Morin and now of the new center and a LAW professor of the practice of banking law. “All of the interesting issues are not purely legal. They always involve another piece of the puzzle, meaning economic or business or finance or communications. Something like the shadow banking system—if the businesspeople don’t understand that, you can be damn sure lawyers don’t understand that.”
“Shadow banking” refers to investment banks and other institutions assuming services like mortgage lending that were once left to conventional depository banks, but operating without the regulatory oversight given those banks.
The center’s formal launch is this Sunday and Monday with a two-day, heavy-hitter conference on The State of Financial Reform. The conference will bring to campus noted financial journalists, scholars from BU and other schools, and regulators, including Eric Rosengren, Federal Reserve Bank of Boston president. The center unofficially debuted last September with seminars throughout the fall for students in its affiliates: the School of Law, the School of Management, the College of Communication, the College of Arts & Sciences, and Metropolitan College.
Hurley says the new center was conceived at a meeting in 2009 at Brown’s home with deans and professors from LAW, CAS, and SMG. The discussion turned on the financial crisis and the University’s potential to be a research and expertise hub on the topic. It became clear that faculty experts “are in their separate silos,” Hurley says. “I have an inventory of 90 names of people that are laboring in this same area—people who teach here. And the amazing thing to me is that, for the most part, these people have never met one another.”
“We hope the center will be the go-to resource for law and policymakers,” says Maureen O’Rourke, dean of LAW. “Few schools can match the breadth and depth of faculty expertise that BU has in the area.” She also hopes that the center, housed at least for now at LAW, will attract students to the school’s three-decade-old graduate program in banking and financial law, the first of its kind in the country.
A widely accepted view of the cascading bank bailouts worldwide is that “the right hand didn’t know what the left was doing,” Hurley says. “The regulators didn’t know what the institutions they were regulating were doing. The Fed didn’t know what the shadow banking system was doing. The risk managers didn’t know what the businesspeople were doing.” Last month, a federal report agreed, pinning the “avoidable” financial collapse on government and corporate screwups.
Addressing those problems requires knowledge from multiple disciplines, something Hurley says he came to appreciate even before the financial meltdown. The financial reform signed by President Obama last year is inadequate, he says: “It was a political compromise. So the problems are still on the table. The need for this kind of interdisciplinary approach is greater than ever.”
Asked what role the new center might play once the financial crisis is resolved, Hurley says possible activities might include a certificate-granting education program for financial regulators. Another would be advocating for financial literacy education, not only for BU students, but for Massachusetts public schools. “Most people don’t know squat about investing,” he says, at a time when retirement has come to hinge on it.
The closing session of The State of Financial Reform conference, on Monday, February 28, at 1:30 p.m., is open to the public by registration. Sessions on Sunday and earlier Monday are by invitation only. The conference is at the BU Executive Leadership Center, School of Management, fourth floor, 595 Commonwealth Ave.
Rich Barlow can be reached at firstname.lastname@example.org.+ Comments