The Commons
L-R: Steven Schwarcz, Sarah Bloom Raskin, and James Cox
Ten years from the bottom
Duke Law financial experts analyze regulation before and after the Great Recession
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Duke Law Magazine • Fall 2019
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orrupting incentives, lack of transparency, and a dispersed, siloed system of regulatory agencies contributed to the financial crisis of 2008-2009. At a spring conference organized by the Global Financial Markets Center (GFMC), a trio of Duke Law financial experts cautioned that the current deregulatory environment could contribute to the next crisis. Rubenstein Fellow Sarah Bloom Raskin and Professors James Cox and Steven Schwarcz spoke on the legal and regulatory impact of the financial crisis during “Ten Years from the Bottom,” held March 20 at Duke’s Fuqua School of Business. The interdisciplinary event was co-sponsored by GFMC, the Duke Financial Economics Center, the Duke Center for Political Leadership, Innovation, and Service, and Duke Corporate Education. Introducing the panel, GFMC Executive Director Lee Reiners recounted how, in the 17 months leading up to March 2009, the value of all U.S. stocks dropped from a peak of $22 trillion to $9 trillion, fueled in part by a decline in home prices, a sell-off of mortgage-backed securities, the failure of Lehman Brothers, and the near failure of several other large financial institutions, including Bear Stearns, Citigroup, and AIG. The escalating crisis led to emergency legislation to stabilize the nation’s financial system, the brief suspension of the 2008 presidential campaign, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), a law that overhauled the nation’s financial regulatory agencies, to ensure a similar crisis would not happen again. Raskin, a former Federal Reserve Board governor who served as deputy treasury secretary for three years during the Obama administration, described the
