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Too Big to Save? [C-SPAN]
Too Big to Save? [C-SPAN]
February 8, 2010 – 9:58 am | No Comment

Robert Pozen looks at the causes of the 2008 financial collapse and says that the financial system needs to be reformed so that we don’t see a repeat down the road. He argues for changing the incentive system on Wall Street and calls for strengthening the government regulation of financial markets. (1 hours, 9 minutes)

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How to keep politics out of rating agency reform [FT]
May 13, 2010 – 1:13 pm | No Comment

How to keep politics out of rating agency reform [FT]

By requiring a neutral third party to select the rating agency, Congress would significantly improve the quality of bond ratings relied on by small institutions and individual investors. Yet this approach avoids excessive political influence on the ratings process by limiting the government’s role to the minimum necessary to avoid ratings shopping.

Pozen Doesn’t See Greece Crisis Hurting U.S. Rebound [Bloomberg Video]
May 6, 2010 – 2:42 pm | No Comment

Robert Pozen, chairman of MFS Investment Management, talks with Bloomberg’s Matt Miller and Carol Massar about the impact of Greece’s sovereign debt crisis on the US economy. US stocks tumbled the most in a year on concern Europes debt crisis will halt the global recovery.

A case of regulatory jitters [Boston Globe]
May 2, 2010 – 4:48 am | No Comment

Local banks, insurers, financial firms brace for a new regimen of rules. Tracking these investments [derivatives] is critical, according to many observers. More important even than putting them on an exchange, said Pozen, the chairman of MFS Investment Management, is having a central clearing firm that processes those trades and can be examined by regulators.

They’ve Got It: Fixes for the Financial System [New York Times]
April 23, 2010 – 1:22 pm | No Comment
They’ve Got It: Fixes for the Financial System [New York Times]

By SEWELL CHAN and BINYAMIN APPELBAUM. Robert C. Pozen, chairman of MFS Investment Management and author of “Too Big to Save? How to Fix the U.S. Financial System” (Wiley, 2010), wants to require banks to issue an existing kind of bond known as long-term subordinated debt. “Subordinated debt is bought by very sophisticated investors who insist on conditions like capital requirements and covenants to make sure that banks don’t take on too much risk,” he says.

Since their investment is not ..read more

A better fail-safe than CoCo bonds [FT]
April 21, 2010 – 12:00 pm | No Comment
A better fail-safe than CoCo bonds [FT]

CoCo with its mandatory conversion presents the unappetising combination of bond returns with equity-type risk. Sub-debt with an option to convert offers bond risks with the potential for equity-type returns. Which one would you choose?

Financial Crisis Reading List [New York Times - Economix]
March 25, 2010 – 11:29 pm | No Comment
Financial Crisis Reading List [New York Times - Economix]

By David Leonhardt. “One book that may deserve more attention than it’s received is “Too Big to Save,” by Robert Pozen, a former vice chairman of Fidelity Investments. I found Chapter 6 — on capital requirements — especially useful. As Mr. Pozen writes, these requirements are ‘the most criticial component of any regulatory system for commercial banks or investment banks.’ “

How to design a fair bank tax [Financial Times]
March 24, 2010 – 7:09 pm | No Comment
How to design a fair bank tax [Financial Times]

It is unfair to impose a bank tax on all financial institutions with over $50bn in assets regardless of whether they received any direct federal assistance during the financial crisis. Congress should raise roughly the same amount by imposing the tax only on the very large financial institutions that received direct federal assistance and it should base the size of the tax on the amount of that assistance.

America’s budget deficit needs bipartisan action [FT]
March 2, 2010 – 1:32 pm | No Comment
America’s budget deficit needs bipartisan action [FT]

Although a bipartisan agreement will be hard to achieve in the current Washington environment, both parties should recognise that a package of entitlement reforms is less dangerous than an explosion of US interest rates in the coming years.

A Selective Defense of “Too Big to Fail” [Barron's]
March 1, 2010 – 2:43 pm | No Comment
A Selective Defense of “Too Big to Fail” [Barron's]

Reviewed by Jim McTague. Here’s an idea for curbing the rapine of all those financial executives thumbing their noses at the taxpayers who rescued them from ruin: Limit their annual salaries to $300,000 to $400,000, and institute three-year performance programs that award bonuses to good stewards, but not the bad.

That’s just one of several provocative ideas found in this thorough, intelligent and straightforward book by money manager Robert Pozen, which traces the ontogeny of the financial crisis and offers ..read more

The US public debt hits its tipping point [Boston Globe]
February 23, 2010 – 3:28 pm | No Comment
The US public debt hits its tipping point [Boston Globe]

CONGRESS RAISED the federal debt limit this month by $1.9 trillion to a record level of $14.3 trillion. Given the projected budget deficit for the next year, the gross public debt of the US government will probably hit that $14.3 trillion limit by the end of 2010. This huge expansion of public debt is not just an abstract concern of economists; it is likely to hurt the practical situation of most American families and firms.

Cinderella’s moment [The Economist]
February 12, 2010 – 3:30 pm | No Comment
Cinderella’s moment [The Economist]

A special report on financial risk. Robert Pozen … thinks bank boards would be more effective with fewer but more committed members. Cutting their size to 4-8, rather than the 10-18 typical now, would foster more personal responsibility. More financial-services expertise would help too. After the passage of the Sarbanes-Oxley act in 2002 banks hired more independent directors, many of whom lacked relevant experience. The former spymaster on Citi’s board and the theatrical impresario on Lehman’s may have been ..read more