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December 10, 2012 at 08:47 AM
The Office of Financial Research (OFR) and the Financial Stability Oversight Council (FSOC) recently held a major conference on systemic risk — the danger that the entire world financial system will collapse and leave us all in a world that looks like Hoboken, N.J., the day after Sandy hit. (Creepy.)
The OFR and the FSOC, arms of the Treasury Department, said the focus of the conference was measurement and analysis of financial intermediation.
I think that’s a fancy way of referring to “financial services companies.”
As in, life insurers. Disability insurers. Long-term care insurers. Health insurers.
I found out about the conference late and, sadly, didn’t watch the live Webcast. The Treasury Department had the video and slides up for a few hours, and I did go through all 70-something slides.
So far, no one from the Treasury Department has gotten back to me with answers about the conference. I’ve asked around, and there’s no evidence that anyone from the insurance industry was at the conference.
As far as I can tell, the list of conference speakers included no one from an insurance trade group, an insurance company or an insurance regulatory agency.
Robert Merton, an economist from the Massachusetts Institute of Technology, created what looked like a beautiful, circular, Spirograph drawing of the financial services sector. The Great Global Economic Spirograph showed that, before 2008, many insurance companies were deeply connected with (surprise!) many banks, securities brokers and mutual fund companies.
But I saw no evidence from the slides that anyone at the conference spent much time talking about the psychopathic killer elephant in the room: The effort by the Treasury Department’s fellow federal financial services regulators, the Federal Reserve Board officials, to keep interest rates artificially low over a period of many years.
