. see harris interactive poll ( 2011 ). see corelogic ( 2011 ). i have argued that financial institution leverage undercuts financial stability. however, in practice, i believe that it would be administratively challenging to have different tax treatments for given corporations based on whether they are “ financial ” or “ nonfinancial. ” hence, my suggested policy proposal applies to all corporate debt. bis central bankers ’ speeches i regard these two proposals for the tax code as being entirely natural ones to consider in light of the recent financial crisis. but i would also encourage policymakers in the tax arena to ask broader questions about the mortgage interest and corporate interest tax deductions. what are the social benefits associated with these deductions? can these social benefits be achieved using an approach that does not undercut the stability of the financial system? for example, suppose that a policymaker likes the mortgage interest deduction because he or she believes that it encourages home ownership. that policymaker could consider replacing the mortgage interest deduction with a tax credit that offsets part of a buyer ’ s down payment toward a home purchase. such a tax credit would encourage home ownership without simultaneously providing more incentives for households to accumulate more debt. similarly, a policymaker may like the corporate interest tax deduction because it stimulates business investment. that policymaker could consider replacing the corporate interest tax deduction with a lower corporate income tax rate. the lower corporate income tax rate would encourage business investment without simultaneously providing incentives for corporations to acquire leverage. let me wrap up. in a speech last october, janet yellen, the vice chair of the board of governors of the federal reserve system, gave a speech about the roots of the recent financial crisis. 9 as i have done today, she emphasized the critical role played by excessive household and financial institution leverage in generating the crisis. she described how the changes in supervision and regulation contained within the dodd - frank act would put new and important brakes on these kinds of build - ups. i agree with her completely about these benefits of the new supervisory and regulatory regime. but i also agree with her statement that “ systemic risk surveillance will demand herculean efforts by the regulatory agencies. ” in my view, this observation means that other elements of the policy environment need to be as supportive as possible of the regulatory agencies. it is for this reason that i believe that policymakers should be willing to reconsider the extent of leverage subsidies within the u. s. tax code. that brings me

amando m tetangco, jr : the central bank of the philippines – supporting academic excellence speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the bsp up centennial professorial chairs launching ceremony, quezon city, 7 october 2008. * * * senator angara, president roman, chancellor cao, our friends from the up community, fellow supporters of up, special guests, good afternoon. on behalf of the bangko sentral ng pilipinas, i am here to launch the seven bsp - up centennial professorial chairs. we believe that setting up professorial chairs is the best way to institutionalize our support to academic excellence that is the hallmark of the university of the philippines. as i said before, the concentration of up alumni in legal, political and government circles as well as in the scientific pool speaks volumes about the university ’ s central role in nationbuilding. by helping mold the minds of the nation ’ s best and brightest or what we call iskolars ng bayan, by stoking the engine of innovation, and by providing an intellectual compass and healthy critique to public policymaking, up has contributed and continues to contribute to the advancement of our country. the bsp - up centennial professorial chairs managed by the up foundation inc. are professorial chairs donated by the central bank of the philippines in 1982 - 1983 during up ’ s diamond jubilee celebrations. the original endowments for these chairs was p150, 000 each. we raised each endowment to p1, 500, 000 by donating an additional p1, 350, 000 per chair. meanwhile, the bsp up centennial professorial chair in business administration has an endowment of p1. 5 million from several donations made by the cbp and the bsp since 1981. we raised the endowment to p3 million through an additional donation of p1. 5 million. the terms also have been enhanced to maximize the benefits to the chairholder. since 1983 when the professorial chairs were first awarded, they have been held by distinguished scholars whose research and public service have contributed significantly to the shaping of policy decisions, the enactment of landmark legislation and the formation of institutions, both in the government and private sectors. the decision of the bangko sentral to establish additional professorial chairs namely, the bsp sterling professorial chair in monetary and banking economics at the up school of economics and the bsp sterling