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ACA Summit Salzburg Global Seminar

ACA Summit Salzburg Global Seminar. “New Rules for Global Finance” Nicholas W. Conger (WVWC) & Nora Myers (UCWV) October 15, 2011. Appalachian College Association (ACA) Mellon Foundation Fellowship. Salzburg Global Seminar. Austria. Austria. Austrian Alps – The Sound of Music.

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ACA Summit Salzburg Global Seminar

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  1. ACA Summit Salzburg Global Seminar “New Rules for Global Finance” Nicholas W. Conger (WVWC) & Nora Myers (UCWV) October 15, 2011

  2. Appalachian College Association (ACA) • Mellon Foundation Fellowship Salzburg Global Seminar

  3. Austria

  4. Austria

  5. Austrian Alps – The Sound of Music

  6. Grand Tetons National ParkWyoming

  7. Salzburg Global Seminar

  8. Schloss Library

  9. Schloss Dining Room

  10. Weiner Schnitzel

  11. Apple Strudel…but…

  12. Vienna, Austria - 1st Time in Vienna Salzburg Global Seminar

  13. Belvedere Palace – Prince Eugene

  14. City Hall

  15. Schonbrunn Palace - Hapsburg

  16. St. Stephens Cathedral

  17. Vienna Opera House

  18. Vienna Opera House

  19. University of Vienna Universität Wien

  20. Vienna National Library

  21. Bratwurst & Sauer Kraut

  22. Café Sacher & Sacher Tort

  23. Viennese Coffee

  24. Tram Hotel Hotel & Tram to VNB

  25. Austrian National Bank Oestereichische National Bank (ONB)

  26. Federal Reserve Board (FED)

  27. Government Sponsored Enterprises (GSE’s)

  28. Salzburg Global Seminar

  29. Conservatorship of GSEs - September 7, 2008

  30. 2008 Global Financial Crisis Review of the Carnage…

  31. http://www.cfr.org/world/crisis-guide-global-economy/p19710 2008 Global Financial Crisis

  32. 2008 Global Financial Crisis “The Worst Crisis Since 1929” • Commercial Bank Failures in Ireland, UK, Iceland • Hedge Fund Failures • Investment Bank Failures or Near Failure • Two GSE’s placed into Conservatorship • Global Insurance Company – CDS • Massive U.S. Central Bank & U.S. Treasury Infusion of Capital New Rules for Global Finance

  33. Architect's of the Multi-Trillion* Fiscal Bailout • Hank Paulson – U.S. Treasury Sec • Tim Geitner – NY Fed President • Ben Bernanke – FED Chairman • White House – President’s Bush & Obama • Congress: Chris Dodd-Barney Frank New Rules for Global Finance

  34. Northern Rock Bear Stearns Lehman Brothers Merrill Lynch Bank of America Fannie Mae and Freddie Mac Citibank AIG Troubled Global Financial Institutions

  35. Salzburg Global Seminar New Rules for Global Finance: Proposals for Regulatory Reform – Topics: • Capital Adequacy • Regulatory Structure Reforms • Oversight of Derivatives • Risk Management • Systemic Risk Europe – Asia - USA Salzburg Global Seminar

  36. Ewald Nowotny – Governor, ONB

  37. Financial Stability: The Role of the EU & the UK FSB & FSA • European Union (EU) Stimulus Plan • UK: Financial Stability Board (FSB) and FSA (Financial Services Authority) Starting with the EU… Salzburg Global Seminar

  38. 27 Member Nations • European Council • European Commission • European Central Bank • Maastricst Treaty - 1993 The European Union

  39. The Euro 1€ Coin The Euro - The Common Currency of 17 of the 27 member countries of the European Union

  40. The European Central Bank HQ: Frankfort, Germany -- President: Jean-Claude Trichet

  41. November 2008 • €200 Billion = $300 Billion • Macro Economic Plan to Limit the Economic Slowdown: • S-T Stimulus to increase Demand and maintain employment • L-T investment in strategic sectors (Research & Innovation) EU Stimulus Plan

  42. October 2008 • £500 Billion = $850 Billion • Restore Market Confidence and Stabilize Banks • S-T: Loans & Guarantees • Direct Investment in Bank Capital • Anglo Irish Bank Corp Act 2009 UK Bank Rescue Package

  43. European Financial Regulatory Reform and Impact on Banks • UK: Centre for Regulatory Strategy: Need for Coordinated Regulatory Framework Reforms • London School of Economics: Capital Adequacy (Charles Goodhart: Basel II was a “miserable failure”) • Austrian Financial Market Authority: Euro Zone Problems are Country Concerns “We are moving in the right direction” Salzburg Global Seminar

  44. Asian Financial Stability and Reform • Asian Development Bank-Manila (President Kuroda) • Financial Institutions Stability – Deputy Governor Vanikkul, Bangkok, Thailand • China Banking Regulatory Commission Fan Wenzhong “My SGS A-Ha - OMG Moment” Salzburg Global Seminar

  45. Asian Development Bank: President Kuroda • Global Challenge is Economic Growth & Economic Reform Concurrently (Stimulus & Restraint) • Implementation Challenge Within and Across All Regions of the World Financial Stability Reforms - Asia

  46. Thailand Financial Institutions Stability – Governor Vanikkul • 1997 Currency Crisis (Baht) – Lessons Learned • Traditional Conservative Banking Model:10% Growth (ROE)… • …Not 25% (Western Target) Financial Stability Reforms Asia

  47. China China Banking Regulatory Commission Fan Wenzhong • 1997 Currency & Crisis (Baht) - Russia LTCM NPL @ 25% • China Hired Banking Experts • New Business Model & Risk Management… Financial Stability Reforms - Asia

  48. Basel III - Already Implemented Staggered Implementation (2019) (12% Average) • Regulatory Agencies Centralized • New Risk Management Metrics: Risk Adjusted-ROE NPL’s now at 1-2% Capital @ 12% PLL > 200% China Banking Regulatory Commission (CBRC)

  49. U.S. Financial Regulatory Reforms Center for American Progress (David Min) The Brookings Institution (Douglas Elliott) • History of US Banking System – Glass Steagall • Regulatory Structure Fractured – Needs Harmonized • Large Banks Getting More Concentrated = ^ Risk • Lesson Learned: Due Diligence for PLS Salzburg Global Seminar

  50. US Financial Regulatory Response • Initial Stimulus Packages (TARP): $700 Billion • Multiple Follow-On FED Programs: • Asset-Backed Commercial Paper • CP Funding Facility • GSE Debt & MBS Purchases • Money Market Investor Funding Facility • Term ABS Loan Facility • US Gov’t Bond Purchases Over $3 Trillion…and still counting Salzburg Global Seminar

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