1st ferdinand pecora prize of dogs, black swans and endangered species : a perspective on financial regulation laudatio of andrew g. haldane by luigi federico signorini palermo, 15 december 2017 i am happy to deliver the laudatio for andrew haldane on the occasion of his nomination, by unanimous decision of the international rome conference on money, banking and finance, as the first person to be awarded the ferdinand pecora prize. it is also a pleasure to welcome in palermo a brilliant colleague and a friend. ferdinand pecora was a native of this island. he was born in nicosia in 1882, and emigrated to the united states as a child, in 1886. there, he started his career as an assistant district attorney in new york city, where he earned an excellent reputation as a prosecutor. but his good credit eventually turned against him : his application as district attorney was rejected, due to fears that an overly fervent pecora could bring local politicians to court. after this turn of events, pecora left the district attorney ’ s office for private practice until the beginning of 1933, when he was appointed chief counsel to the us senate ’ s committee on banking and currency. in this assignment he was the fourth – and last – chief counsel in the inquiry launched by the senate committee to investigate the causes of the wall street crash of 1929. it was largely as a result of what came to be known as the ‘ pecora investigation ’ that the us congress passed the ‘ glass - steagall ’ banking act of 1933, the securities act of 1933, and the securities exchange act of 1934. this set of measures produced a radical change in the architecture of financial supervision in the united states, establishing a system that was to last for about two generations. the banking act mandated federal deposit insurance and separated commercial and investment banking ; it created a federal open market committee and restricted bank competition and ‘ speculation ’. these simple yet powerful measures were meant to prevent the recurrence of severe financial crises. was this arrangement optimal? maybe it was fit for the times ; but, decades later, the intellectually unavoidable trade - off between stability - oriented supervisory constraints and efficiency - oriented market freedom resurfaced in the policy debate. beginning in the 1970s, in a changed cultural climate and with memories of the great depression fading, the glass - steagall rules were gradually weakened. the idea of unshackling market forces had

in march and april. also, the growth in broadly - defined liquidity has been declining since the middle of 1997. 1 this report was written based on data and information available when the bank of japan monetary policy meeting was held on may 19, 1998. 2 the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on may 19, as the basis of monetary policy decisions. private bank lending remains sluggish. although corporate financing via the capital markets and government financial institutions continues to expand, the increase in overall corporate financing seems to indicate a clear slowdown under the stagnant economic conditions. banks remain cautious in extending loans with a view to improving their medium - term profitability and financial soundness. in the capital markets, the difference in fund - raising costs of firms has remained relatively large according to their creditworthiness. in such circumstances, some firms, especially small and medium - sized firms, have been facing difficult financing conditions and this influence on the economy continues to warrant a careful monitoring. * * * nb this bis review is available on the bis world wide web site ( http : / / www. bis. org ). _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _