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Tuck Global Capital Markets Conference |
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Event Overview The Center for International Business at the Tuck School of Business at Dartmouth held its first annual Tuck Global Capital Markets Conference on February 15. David H. McCormick, under secretary for international affairs for the U.S. Department of the Treasury, gave opening remarks. Frederic Mishkin, member of the Board of Governors of the Federal Reserve, gave the keynote address. Senior financial services professionals from across the United States joined the Tuck community to discuss issues ranging from competition among global financial centers to the rise of sovereign wealth funds. "The leadership here at the Tuck School was prescient, even clairvoyant, in scheduling a conference on global capital markets at this time—the timing could not be better," McCormick said in his address on open investment and American prosperity. He cautioned against protectionism and emphasized the need for reasoned investment policies governing sovereign wealth funds, national security reviews, and bilateral investment treaties. "We need your enthusiasm for advocating your views on investment with policymakers at home and abroad, within Washington, and within your home states," he said. "Together, we must make the case to America that open investment is a competitive advantage." In his talk, entitled "The Federal Reserve's Tools for Responding to Financial Disruption," Mishkin addressed the tools available to the Fed during times of crisis and signaled the Fed's priorities going forward. "Since the onset of financial market strains late last summer, the Federal Reserve has been acting in a decisive, timely, and flexible manner in fostering the objectives of price stability and maximum employment. In particular, the Federal Reserve's actions have been aimed at supporting market liquidity, mitigating the downside risks to economic activity, and promoting moderate growth over time." During a panel on the competitiveness of the U.S. capital markets, experts discussed reasons for the decline in the competitiveness of the U.S. capital markets in recent years. Robert Leary, chairman and CEO of ING Investment Management Americas, cited changes in the global business climate and the nature of the legal and regulatory environments in the U.S. as compared to countries such as the United Kingdom. Panelists also suggested measures that U.S. companies and the U.S. government could take to enhance competitiveness. A second panel focused on barriers to cross-border mergers and acquisitions. Panelists, including Gordon Dyal, head of global mergers and acquisitions at Goldman Sachs, and Benjamin Braun, managing director of mergers and acquisitions at Merrill Lynch, agreed that barriers are on the rise worldwide and that this is a troubling development. Panelists cited causes ranging from different internal political realities and industrial policies among the major economic players of the world, to the rise of sovereign wealth funds. They also suggested ways to ensure that U.S. regulations are fair, predictable, and transparent. The conference concluded with a presentation by Tuck finance professor and former president of the American Finance Association, Kenneth French, entitled "The Negative Sum Game." French shared the results of his latest research comparing the costs associated with active investment in the U.S. stock market to the estimated cost of passive investment. He found that from 1980 to 2006, investors spent an average of 0.65 percent of the aggregate value of the market each year searching for superior returns. French also explained that if the typical active investor switched to a passive market portfolio, he would have increased his average annual return by 80 basis points over this period. "As capital markets become truly global, the challenges become more difficult and the solutions require new and innovative approaches," noted Professor Andrew B. Bernard, the center's director. "Our forum brought together top academic, policy, and business leaders together to address today's problems in a constructive environment." The conference received sponsorship from Morgan Stanley and from the John Sloan Dickey Center for International Understanding at Dartmouth College.
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| ©2007 The Trustees of Dartmouth College. All rights reserved. | ||||||||||||||||
