BU Now » Federal Reserve Bank

AIG bill still hitting taxpayers

Dick Taffe — Thu, 10 Jun 2010 21:42:08 +0000

The Congressional Oversight Panel says in a scathing report that the government failed to exhaust all options before bailing out the insurance giant American International Group – although the rescue did help the financial system avert collapse. Nonetheless, the watchdog panel says taxpayers may never be paid back all of the $182 billion funneled to support AIG. Former Federal Reserve Bank examiner Mark Williams, who teaches finance in the School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, says the report speaks to the elevated role that policymakers have in conducting stronger risk management.

“Taxpayers deserve better decision making that incorporates basic risk-management tools, including risk measurement, worst-case forecasting, monitoring, and frequent reporting. With significantly more taxpayer money at risk, now it is time for policymakers to exercise better risk management.”

Contact Mark Williams, 617-358-2789, williams@bu.edu

Congress close to financial reg reform

Dick Taffe — Fri, 21 May 2010 20:40:49 +0000

The most extensive overhaul of financial regulations since the 1930s has cleared its big hurdle in the U.S. Senate and how can head to President Obama for a signature after a conference committee works out remaining differences between the House and Senate versions. But former Federal Reserve Bank examiner Mark Williams, who teaches finance in the School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, cautions that only four of the world’s 30 global financial giants that could take down the world’s economy are covered under this reform bill — yet the problems are globally systemic.

“The U.S. is now in the position to lead again but will need to encourage other nations to follow. Until global uniformity is reached, high systemic risk will remain.”

Contact Mark Williams, 617-358-2789, williams@bu.edu

Risk, not size, is bank industry’s woe

Dick Taffe — Tue, 02 Feb 2010 22:08:42 +0000

The problem isn’t that banks are too big; they’re just taking excessive risk. Ex-Federal Reserve Bank examiner Mark T. Williams, who teaches finance in the School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, says in a Reuters commentary that any meaningful financial reform must address lending standards while tightening oversight and policing.

“A country made up of ten well-capitalized big banks is much stronger than one with over 7,000 small banks taking dangerously big bets.”

Contact Mark T. Williams, 617-358-2789, williams@bu.edu