Round Table: The Global Financial Crisis: Alternative Architectures of Financial System Shyam Sunder, Yale School of Management First Mediterranean Critical Studies in Accounting and Finance Conference Hammamet, Tunisia, July 6-7, 2009

Rethinking the Architecture The financial crisis calls for some basic rethinking of the financial architecture along many dimensions 1.Degree of integration and insulation in the global system (capital convertibility) 2.Control of systemic risk (deposit insurance, size of institutions) 3.Separation of commercial and investment banks and control of leverage 4.Transparency of financial transactions (exchanges, clearinghouses) 5.Opaque regulatory jurisdictions beyond law (Cayman Is.) 6.Dynamics of financial regulation, instruments, transactions, and organizations (degrees of freedom in the system) 7.Regulatory competition (getting ready to fight the last war, creativity) 8.Interaction between politics and regulation (mortgage security, compensation, capture, no ultimate solution) 2

Thank You! 3