Grossman Presents Papers in Switzerland, Norway

Richard Grossman, professor of economics, recently presented a talk titled, “An historical perspective on regulatory competition versus cooperation: the view from economics” at the third annual Conference of the University Research Priority Program. The conference, held June 1-2 at the University of Zurich Institute of Law, was titled, “International Aspects of Financial Regulation: Competition vs. Coordination.”

Grossman’s talk focused on cross-border cooperation between international bank regulators in the wake of the U.S. subprime and European debt crises—an effort to enhance banking stability. Examples include the Basel capital accords and European Stability Mechanism. Grossman put these into historical context by looking at episodes of cooperation—and competition—between federal and state regulators in the U.S. during the 19th and early 20th centuries. He presented evidence on several episodes in which state and federal regulators loosened regulations to help banks under their supervision gain a competitive advantage over banks in neighboring jurisdictions. Although cooperation is feasible in some areas of regulation, Grossman argued that regulators will always be inclined to compete—that is, favor their own banks at the expense of others.

On June 20, Grossman presented a paper at the Third CERP Economic History Symposium, held at Norges Bank, Norway’s central bank, in Oslo.

The paper, co-authored by Grossman and Masami Imai, professor of economics, professor of East Asian studies, is titled “Taking the Lord’s Name in Vain: The Impact of Connected Directors on 19th Century British Banks.”