Center for Financial Policy Hosts Distinguished Speaker Event Series

Jaime Caruana, General Manager for the Bank for International Settlements (BIS)

The Center for Financial Policy at the University of Maryland’s Robert H. Smith School of Business hosted Jaime Caruana, General Manager for the Bank for International Settlements (BIS), on April 15, 2013 as part of the center’s Distinguished Speakers Event Series.

Caruana – whose speech was titled “Shadow banking: issues and regulatory approaches” – opened by first expressing his excitement in being hosted by the University of Maryland and the opportunity to speak for the event series stating, “I like these kinds of events because of the intellectually challenging questions that come from these events at universities” and called to students “for a better approach towards finance than my generation.”

Caruana went on to discuss the importance of the study of the shadow banking industry, which has grown to over $67 trillion. He described it as a “very dynamic and complex adaptive system” which moves rapidly. Shadow banking is the term for all non-bank financial activity including money markets, hedge funds, and off-balance sheet investment vehicles. Caruana agreed that it is necessary to monitor and regulate, and touched on different approaches, but concluded that “regulation won’t be the solution, and regulation is not the problem, but we will need a variety of policies for the financial system to work better” integrating values of responsibility and accountability. He suggested that remedial measures should include a more resilient system of market-based finance with stable funding structures and restrained leverage, better risk management, and more transparent markets.

Caruana took the position of General Manager of the BIS in April 2009. As the Bank’s chief executive officer, he carries out the policy determined by the Board of Directors and is responsible to the Board for the management of the Bank.

Previously, Caruana was Financial Counselor to the Managing Director as well as Director of the Monetary and Capital Markets Department at the International Monetary Fund.

From 2000 to 2006, he was the Governor of the Bank of Spain, Spain’s central bank, and in that capacity, served on the Governing Council of the ECB. He was also the Chairman of the Basel Committee on Banking Supervision from 2003 to 2006 and has been a member of the Financial Stability Forum (now the Financial Stability Board) since 2003. From 2004 to 2006, he chaired the Coordination Group, a senior group of supervisory standard setters from the Basel Committee, the International Organization of Securities Commissions (IOSCO), the International Association of Insurance Supervisors (IAIS) and the Joint Forum.

Prior to joining the Bank of Spain, Caruana served as Director General of the Spanish Treasury and headed an investment services company and a fund management company for nearly 10 years.

Upcoming events hosted by the Center for Financial Policy include:

• Congressional Briefing, April 23, hosting Andrew Olmem, former Republican Deputy Staff Director and Chief Counsel at the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Register online.
• Emerging Markets forum, April 26, “Emerging Markets at the Crossroads: Current Challenges and Future Prospects” with Keynote Speaker Ian H. Solomon, United States Executive Director of The World Bank.