Written by John Lounsbury
Stephen G. Cecchetti, Brandeis International Business School, presented the 2019 Annual O. John Olcay Lecture on Ethics and Economics on the topic of “Finance for People: Some Do’s and Don’ts” on September 18 at the Peterson Institute for International Economics.
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About Prof. Cecchetti from the Brandeis Faculty Guide:
Rosen Family Chair in International Finance in the Brandeis International Business School
Departments/Programs
Degrees
University of California, Berkeley, Ph.D.
University of California, Berkeley, M.A.
Massachusetts Institute of Technology, B.S.
Expertise
Macroeconomics, monetary policy, banking, central banking and financial regulation.
Profile
Stephen G. Cecchetti is the Rosen Chair in International Finance at the Brandeis International Business School, Vice Chair of the Advisory Scientific Committee of the European Systemic Risk Board, a Research Associate of National Bureau of Economic Research, and a Research Fellow of the Centre for Economic Policy Research. From 2008 to 2013, Professor Cecchetti served as economic adviser and head of the monetary and economic department at the Bank for International Settlements. During his time at the Bank for International Settlements, Cecchetti participated in the Basel Committee on Banking Supervision and the Financial Stability Board post-crisis global regulatory reform initiatives to establish new international standards for ensuring financial stability.
In addition to his other appointments, Professor Cecchetti, from 1997 – 1999 served as Executive Vice President and Director of Research at the Federal Reserve Bank of New York; and from 1992-2001 he was editor of the Journal of Money, Credit, and Banking.
One focus of the lecture is consideration what is ethical in in recent developments in personal financial capabilities. Has technology outpaced the capabilities of people to use it effectively? Prof. Cecchettti comes to some unsettling conclusions about financial literacy which seems totally incompatible with the technology capabilites that people today carry around on their smart phones. With all the new technology, opportunities arise for increased fraud and predation, even by concerns that should have fiduciary responsiblity. Prof. Cecchetti syas he thinks a lot more people should be going to prison; that regulation needs to be increased; and that education needs to be improved.
Prof. Cecchetti also raises a number of questions about lack of efficiency associated with the latest fintech. He points out that, for example, the cost of financial intermedation has remained fairly constant over 130 years at ~1.5% to 2% of transactions.
This video is approximately 1 hour 22 minutes long, divided into a 5 minute introduction by Adam S. Posner, 53 minutes lecture, followed by 23 minutes of Q&A. The lecture is accompanied by excellent slides.
Source: YouTube
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