Bob Pozen

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

Bob Pozen — Thu, 13 May 2010 17:13:21 +0000

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]

Bob Pozen — Thu, 06 May 2010 18:42:24 +0000

May 6 (Bloomberg) -- 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. (Source: Bloomberg)

A case of regulatory jitters [Boston Globe]

Bob Pozen — Sun, 02 May 2010 08:48:18 +0000

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]

Bob Pozen — Fri, 23 Apr 2010 17:22:38 +0000

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 guaranteed and their time horizon is long term, such creditors have interests closely aligned with those of government regulators, says Mr. Pozen, who is also a lecturer at Harvard Business School.

A better fail-safe than CoCo bonds [FT]

Bob Pozen — Wed, 21 Apr 2010 16:00:18 +0000

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]

Bob Pozen — Fri, 26 Mar 2010 03:29:38 +0000

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]

Bob Pozen — Wed, 24 Mar 2010 23:09:20 +0000

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.

Defusing the Banks’ Financial Time Bomb [BusinessWeek]

Bob Pozen — Thu, 11 Mar 2010 19:17:19 +0000

Review by By Geoffrey Miller. Without tough reforms, writes Robert Pozen, we’ll probably face an ugly repeat of recent history

America’s budget deficit needs bipartisan action [FT]

Bob Pozen — Tue, 02 Mar 2010 18:32:51 +0000

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]

Bob Pozen — Mon, 01 Mar 2010 19:43:34 +0000

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 remedies — most of them delectably controversial — for preventing calamities.