When She Talks, Banks Shudder
Bankers are nearly unanimous on the subject of Anat R. Admati, the Stanford finance professor and persistent industry gadfly: Her ideas are wildly impractical, bad for the American economy and not to be taken seriously.
But after years of quixotic advocacy, Ms. Admati is reaching some very prominent ears. Last month, President Obama invited her and five other economists to a private lunch to discuss their ideas. She left him with a copy of “The Bankers’ New Clothes: What’s Wrong With Banking and What to Do About It,” a 2013 book she co-authored. A few weeks later, she testified for the first time before the Senate Banking Committee. And, in a recent speech, Stanley Fischer, vice chairman of the Federal Reserve, praised her “vigorous campaign.”
Dennis Kelleher, chief executive of Better Markets, a nonprofit that advocates stronger financial regulation, said Ms. Admati has emerged as one of the most effective advocates of the view that regulatory changes since the 2008 crisis remain insufficient. “She has been, as one must be,” Mr. Kelleher said, “dogged from the West Coast to the East Coast to Europe and back again and over again.”
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
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http://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html?smid=re-share&_r=0
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