The George G. Kaufman Center for Financial Policy Studies launched its inaugural conference with a clear mission: to honor Professor Kaufman’s five decades of contributions to financial sector policy research and to advance critical examination of public policy going forward. The Center was established through the generous support of Ms. Mimi Winter and is committed to hosting conferences, seminars, and workshops that engage researchers, policymakers, and industry leaders in meaningful dialogue.

This first conference focused on the role of financial services in promoting economic growth and the importance of a stable, well-regulated financial system. While the financial sector can fuel capital accumulation and growth, its structure—featuring limited liability, implicit and explicit safety nets, and systemic interdependence—makes it vulnerable to instability and societal costs.

Speakers explored historical examples such as payment system breakdowns and bank failures, illustrating how misjudged risks can cascade into widespread disruptions. Regulatory measures like improved risk oversight and capital requirements have since helped stabilize key parts of the system.

Beyond macroeconomic concerns, the conference also highlighted microeconomic issues—particularly the unequal access to credit that impedes wealth creation and intergenerational mobility. Speakers emphasized the need for solutions that promote equity without destabilizing markets, advocating for evidence-based policy changes that deliver Pareto improvements.

Sessions addressed three central challenges:

• The effects of limited liability, safety nets, and externalities on market discipline and moral hazard
• The use of capital requirements as regulatory tools
• Strategies to address credit inequities and risks from non-bank financial entities

The keynote address was delivered by Charles L. Evans, President of the Federal Reserve Bank of Chicago.

By encouraging rigorous analysis and open discussion, the Kaufman Center aims to support proactive, research-driven regulation—avoiding the pitfalls of crisis-driven policymaking and contributing to a more resilient financial system.

Date: Friday December 2, 2022
Time: 9:15 a.m. - 3:45 p.m.
Format: In-person
Location: Lewis Towers, Regents Hall, 111 E. Pearson Street

9:15 a.m.
Conference Opening

• Introduction
  Douglas Evanoff, Director, Kaufman Center
• Welcoming Comments and Keynote Speaker Introduction
  Mark C. Reed, President, Loyola University Chicago
• Keynote
  Charles L. Evans, President and CEO, Federal Reserve Bank of Chicago

10:15 a.m.
Networking Break

10:30 a.m.
Session 1: Bank Capital Regulation
Moderator: Tassos Malliaris, Loyola University Chicago
Session Discussant: Mark Carey, Federal Reserve Bank of Cleveland

• Bank Capital Buffers and Lending, Firm Financing and Spending: What Can We Learn from Five Years of Stress Test Results?
  Jose M. Berrospide, Board of Governors of the Federal Reserve System
  Rochelle M. Edge, Board of Governors of the Federal Reserve System
• Private Equity Investment in U.S. Banks
  Robert DeYoung, University of Kansas
  Michal K. Kowalik, Federal Reserve Bank of Boston
  Gokhan Torna, State University of New York—Stony Brook University
• Restoring Confidence in Troubled Financial Institutions after a Financial Crisis
  Charles W. Calomiris, Columbia University
  Mark A. Carlson, Board of Governors of the Federal Reserve System

Noon
Luncheon

12:40 p.m.
Luncheon Presentation
Michael Behnam, Dean, Loyola's Quinlan School of Business

1:00 p.m.
Session 2: Bank Uniqueness: Market Discipline, Market Competition and Moral Hazard
Moderator: Abol Jalilvand, Loyola University Chicago
Session Discussant: Ramon P. DeGennaro, University of Tennessee-Knoxville

• Do Financial Consumers Discipline Bad Lenders? The Role of Disclosure Awareness
  Mark L. Flannery, University of Florida
  K. Philip Wang, University of Florida
  Cathy Zhang, University of Florida
• How Important Is Moral Hazard For Distressed Banks?
  Itzhak Ben-David, Ohio State University
  Ajay A. Palvia, Federal Deposit Insurance Corporation
  René M. Stulz, Ohio State University
• A New Framework for Banking Competition: Protecting the Value of Bank Specialness
  Allen N. Berger, University of South Carolina
  Arnoud W. A. Boot, University of Amsterdam

2:30 p.m.
Break

2:45 p.m.
Session 3: Regulatory Extensions to Achieve Social Goals—Financial Access and Market Stability in Financial Markets
Moderator: Douglas Evanoff, Loyola University Chicago

• The Case for Regulatory Rulemaking Activities in Mortgage Markets and What Additional Research is Needed to Guide these Activities
  Jane Dokko, Federal Reserve Bank of Chicago
• Challenges for Effective Oversight of Non-Bank Financial Institutions
  Nicola Cetorelli, Federal Reserve Bank of New York

3:45 p.m.
Adjourn