financial institutions and markets and also their supervision – which is in front of Congress today. 5. Is there a silver lining to the current economic distress the world is experiencing? If there is a silver lining, it would have to be that only in periods of great duress is significant change made. But you have to be careful of that. In the ’30s, the government enacted the banking acts of ’33 and ’35 and established the FDIC and the SEC. This was a sharp deviation from the past, and this system performed reasonably well for a number of decades. Similarly, now, the major industrial powers will need to recognize that financial institutions play a unique role, and their public responsibility is significant. Rules and regulations for behavior will need to be put in place. No one does that when things are going well. 6. Do you see a need for more such regulation on an international level? Since my view has been that we live in a global world, I believe we must have extraordinary coordination with other nations, because the markets will arbitrage and the problems will crop up wherever rules are less strict. It will not be easy to come by, but there ought to be a global board of overseers of major financial institutions, in which the major powers would participate. 7. The 20th century has been called the American Century. Who or what do you think will be central to the 21st century? The 21st century will be one of global integration. The barriers to trade and financial markets are coming down. The functioning of economic and financial
systems has to become far more integrated. The US still will be the dominant country, because we are a democracy with rules of law and behavior; also our education system at the university level is far more diverse and larger than anywhere else in the world. It’s not easy to get that kind of body of knowledge going in a developing country. The US will continue to play a leadership role. 8. What lessons did you learn at Stern – academic or otherwise – that were most useful to you over the course of your career? One of the lessons I learned is to approach problems by looking at both sides. Don’t prejudge the answer, try to prove it to yourself. I also learned – primarily from my mentor, Marcus Nadler (retired Stern finance professor and leading financial economist) – to try to simplify complex issues. He could take complex economic issues and explain them, putting forth both the plusses and the minuses of an issue and come down to a reasonable answer. My professors had one foot in the real world – the financial world – and one in the academic world and were able to blend that. 9. Why do you prize education so highly? Ignorance is not bliss, it is dangerous. It breeds wrong conclusions. Only over the longer term can we make social and economic changes and that can only come through education. Unless we can raise the level of educational competence, dangers will increase. 10. What are you most proud of? I’m lucky and proud to be here, in America. I could have been caught up in the Holocaust rather than become an American. It’s only when you know the difference that you value this country. ■
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