YouSaid · the spoken record

Dr. Luigi Zingales

lines on the record: 71
first: 2024-03-07
most recent: 2024-03-07
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Oh, because it's a stressful crisis. If it's a cyclical crisis, you know that if you just hold on, eventually the prices will come back up. In New York, you know prices, the trend has always been up and they've been downturn. But if you hold on enough eventually, this will pay off. But if you are in the business of Buggy Whip and then all of a sudden car started to come, holding on to buggy whips will now make them valuable. So I think that that's part of the problem.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“on regional banks that are less monitored than large banks. And so in those banks tend to be less resilient than large banks. And so the risk of seeing problems, again, like we see in SDB, we are real.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“There are two major differences. The first one is that we might be around a structural crisis, not just a cyclical one. The problem is that structural crisis manifests themselves first as a cyclical one, and then you realize you don't bounce back and so it's structural. I think with the enormous development of online commerce, et cetera, I think that we are more in a structural crisis. And so in that sense, it's a different crisis because in the other crisis, if you expand and pretended, you will sort of come up ahead. I'm not so sure that is going to be the case. And second, that as a result in part of regulation, the financial markets sort of concentrated a lot of the”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“And tell us about your view on commercial real estate. Where are the weaknesses of the financial system and how does it compare to prior weaknesses in commercial real estate 2008? I think early 1990, stuff like that.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“could rely on this pressure to keep inflation under control. I am concerned about the effect in the commercial real estate that start to be pretty severe. And I suspect that we're going to see other problems in regional banks that are particularly exposed to commercial real estate. So I don't think we're out of the woods yet. Certainly the outcome so far has been better than what I expected, but that's no guarantee that we'll continue this way.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I think that the outlook has been much better than I expected, to be honest. And part of it has been that the inflation has fallen without seeing a major impact on the economic activity. My suspicion, I don't have the data to prove it, my suspicion, is it is all a consequences of massive amount of immigration, most of it illegal. So if you have a lot of immigration you have a downward pressure on wages and you have high demand and you also have a fake higher productivity because you don't report the people who work. And so as a result, GDP goes up, you don't see more employed and say, oh, productivity goes up. But it's all the influx of illegal immigration. So in that sense, the Fed was lucky because”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Professor, as we reach a close, let's end where we started talking about the Federal Reserve, the Federal Funds rate now is at five and three eighths percentage. Do you think that the Federal Reserve, that interest rates are too restrictive and that the Federal Reserve needs to cut interest rates in order to prevent a recession or improve the banking system?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I think that part of it is that, yes, it is away from the swamp, but it's a bit like if you don't go to school for two years doing COVID, you are maybe catching up to the level of knowledge, but you're always a bit behind in your development as a result of two years where you didn't go to school. And I think that the American economy is a little bit like that.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“It makes me think of an interesting question, which is I know many different measures of economic strength, whether it's GDP or spending or investment declined drastically during the great financial crisis. And although they increased from 2009 to 2019, they were very much below trend. So people call that decadive loss growth. But I think for some measures such as like US spending, that it's actually not just above the trend of 2019, but it's above the 2007 trend. So do you think that, you know, I mean, you ask some questions about economic forecasting is very difficult, but do you think that the American economy is out of the post-great financial crisis slump?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Reduce the contribution of other fields, which are extremely important. But if you think about how devastating the financial crisis was and how to these days, the GDP per capita, the income per capita of Americans is lower than what it would have been if the financial crisis did not occur is really, really important to make a difference in that dimension. So I think that it's a very challenging area, but with enormous rewards if you improve even by an epsilon our understanding in that area.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I think he's actually, I find it is an extremely exciting feel, precisely because it's so complex and not so easy to reduce the mathematical formula. So I think that you need to know maths well, but you need to know psychology and sociology. So I think that what makes economics a wonderful topic to study is that it's very complex and so requires you to not only know math, but also know sociology and psychology and trying to put them all together. And it can be frustrating precisely because it's so difficult, but it's also very exciting. And I think impacts people in a dramatic way, I don't want to...”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“So, when talking about real money, and I think that that amount is in principle, should be rebated to customers through competition. But we know that the banking sector is not very competitive. So that is basically rent that is accumulated by banks in the process. So this will be rebated straight to the treasury. So that would be less taxes for both of us and the less profits of banks. So if you are Jimmy Diamond, you don't like this idea.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“So, the biggest factor is we always talk about senior age as the money, the interest that the Fed earns on its cash and its deposits. And that's a pretty substantial amount of money. We're talking about $30 or $40 billion a year in a normal year, especially as much more. But that's only the current level of seniority. Level of synergy associated with the fact that why do you keep your deposits at Citibank at five basis points when the cell phone rate is at five and a half or whatever it is? It's because of convenience. So that is also sinwage. And that's in the order of $200 billion.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Makes sense. I mean, that would be a very radical change to the financial system. So, I mean, I imagine so much would be different in that financial system than the one we currently have today. What else are the factors that else would it be different?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“All short term deposits. Now, I will only allow banks to take term deposits like a month or three months, and those will not be a substitute to money because they have term deposits.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Who gets paid, who doesn't get pay? So there will be some loans that are not renewed or some investors that lose their money. But they know that taking a risk. So if I want to have my safe payment system, I go and I deposit everything at the Fed and I take no risk.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“In centralized and in the Fed. So we eliminate the role of banks as creator of a form of money, taking deposits or taking line of credit, but it's a form of money. How does lending will take place? Lending will take place like it's taking place today in peer-to-peer lending or now I call marketplace lending in which you deposits for money for at least a month, but let's say two years or whatever, and that money goes to pay for a loan on the other side of the balance sheet. But you tend to have a match sort of asset and liability. So number one, there's not a lot of risk involved. But even if there is risk and the banks were to fail, will not be in doubt.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Is huge because currently if I have to pay you for the meal you pay for me, I can either, if I'm old-fashioned, give you a check, or I can transfer some money with PayPal, et cetera. But let's take the old-fashioned way of a check. My check can have no funds in the bank and you are left sort of without ability to get the money from me, okay? The difference is that if you pay through the Fed, you're simply transferring money that is at the Fed from your name to my name. And so the Fed knows exactly whether the money is there and they authorizes the transfer. And so there is no risk of payment because we transfer some stuff that is”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Can you share more light on the difference between the credit risk and the payments risk? Because when I think of Bank A goes down, the systemic risk is that the losses exceed the equity. And therefore, if Bank B has deposits or a loan to Bank A, then Bank B goes down. And then the dominoes fall. How would the Federal Reserve operating the payment system improve that situation so that Bank A could take as much credit risk as it wants?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Once that information is there, if the government wants it, they're going to get it. So I actually prefer a system in which the information is in the hands of the government. And as a result, we put some infrastructure to protect and to mandate how this can be done rather than put it in private hands. And you don't know how they're going to use it or trade that information.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I think that you are right, but there are ways to do it or to delegate an extra layer to do it. What is important to me is the risk, the balance sheet risk associated with payment is firstly ensured by the Fed and controlled by the Fed. And I think that that is the key element. And second, I know that a lot of people are reluctant to go in that direction because they say, oh, the moment that the Fed knows all this data, then they can use it against you and the government is evil, blah, blah, blah, blah, stuff. And I'm sympathetic to this view. However, let's remember that after January 6th, Bank of America volunteered the information of who withdraw the money around Capitol Hill to the Feds. They volunteer that information. So, what I'm saying is”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“So, my first question is This system of the Federal Reserve keeping information on everyone in the payment system, would that require an operational know-how? Because it sounds like you don't have a lot of confidence in the Federal Reserve to manage the individual's banks managing their most basic risk, which is interest rate risk. So it sounds like maybe this is a lot more complicated. Keeping data on every single person with a bank account.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“However, banks, not surprisingly, hate this, and they try to do everything in their power to make this process as difficult as possible. If you have this information centralized at the Fed, Then the Fed by mandate cannot lend to people. And so it's not a competitor. We'd be happy to share the information for whoever you want. And so I think for the first time, we can separate the business of payment from the business of lending in a major way. Okay, and the big advantage of this is then we can have a business of lending completely in private hands where people can sell and we don't care if they fail because they cannot disrupt the payment system. And then the payment system completely in public hands and nobody can threaten that they are too big to fail because nobody is too big to fail.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Today is much, in my view, much more efficient to have a central bank deal with our payment system, either directly or indirectly, because the technology is there and the centralization of the payment allows also the distribution of information. We know from the beginning of banking that handling your payment also provide the bank with a lot of information about you and so favors lending. However, the flip side of that is that information is only available to the bank. And so it's a monopoly vis- ⁇-vis that information. And so they can exploit a monopoly against you. And in Europe, the regulators are trying to undermine this by mandating open banking, which means that if you shop or pay with a Citibank, but then you want to provide”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“All the financial functions. So the smartphone has changed the way we shop, the way we read the newspaper, the way we even date, change everything. And so it is changing also the way we do finance. And I think that blockchain is just one of the potential applications, but I think that the picture is much, much bigger. I think that we are undergoing a dramatic change in the business model of banking, for example, at a level that we have not seen since the invention of banking.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Cost and drop enormously and even informational asymmetry has been reduced dramatically. I told you I was on a board of a telecom company and at the time it fall into action with a smartphone there was a discussion of whether we had a product that was ankle bracelet for convicted felons that when they were going on parole they would have to wear this so they could be located at every time and there was a discussion whether this was inhumane or not today everybody voluntarily carries a electronic ankle that installs smartphone that allows us to monitor everything you're doing and so that is really changing at the core”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“How you would put the goal of the class slightly differently? So I tell my students, at the essence, finance is nothing but transfer of values across space, across time, and across contingencies. And this transitional value is mostly impeded by two things. Number one, the transaction cost of organizing this. And number two is the asymmetry of information that might make me not trust you that you return your money later on or might induce you to run away with the money after I trust you. With the invention of the Little Device called Smartphone, we have changed dramatically these frictions.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Now, moving on to financial technology, fintech, you're teaching a course right now about the fintech revolution. And I gather just reading the two most salient technologies are one blockchain and two peer-to-peer lending. How would you describe the current state of financial technology and how would you place it in the context of starting with the 14th century with the Italians inventing double entry accounting? And then, you know, you got people inventing the credit default swap in the late 1900s. How would you assess the current state of finance and where do you think it's going?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“they're going to vote on various issues of values. And most people, especially if they pay a minimum amount, won't do that because you know that you're one of a hundred, you make a big difference. And if you are one of a million, you know that your contribution is irrelevant out of 100, I think you're more likely to participate. and your representative and so i think that that's an alternative this is to say i think that the problem you raise does exist but there are potential avenues to solve it and we should explore them rather than say it's impossible so let's keep the status quo”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“This is actually an idea that I'm developing with Ellen Landemore, who was a guest in my podcast and Oliver Hart, is the idea of maybe using alternative forms of democracy to solve this problem. So Ellen Landemore is famous because she promotes what are called season assemblies, which are randomly selected group of people trying to decide on a topic. And at the beginning seems crazy, but if you think of it, the birth of the democracy in Athens was based on Lotocracy. You randomly select people to represent the population. And so imagine that you randomly select 100 investors in Vanguard and you put them in a room, you supply them with information, and you ask them to decide.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“You're absolutely right. Almost half Americans don't even vote for the presidential election and they take only once every four years. Imagine for 500 elections every year that is unthinkable. However, I think you use the right analogy direct democracy. We don't necessarily need to have direct democracy. We can have one situation, we can have indirect democracy, i.e. you can add some guidelines you give to your Moodle fund. Most people these days own stocks through Moodle funds. And so you say, I pick this particular guideline and then the fund will make sure that your shares are both based on that guideline. And some of these guidelines already exist. Some might be creating the future, but it's a very cheap thing to do to implement that.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“So it would be nice to have them making this decision rather than having this charismatic CEOs that make big statement, but then it's not obvious what the statement means in practice.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“To go in front of the shareholder and say, Oh, we are going to save some money at the expense of making our plane a little bit less safe. I think that that would not be a non-stop. So I think that confronted with that possibility, they would make plane more safe, period. But second, on issue, for example, of emissions, I think that the optimal amount of CO2 emission is not zero, otherwise we should kill ourselves because we produce CO2 by breathing, right? So there is a trade-off. And the question is, how much are you willing to sacrifice for that trade-off? So let's have a vote. Are you willing to pay $100 a hundred dollars to reduce one ton of CO2 or are you willing to pay $50 a week willing to pay nothing? But at the end of the day, the share always are the one paying.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I'm a big supporter of what is called corporate democracy, the fact that we should give shareholders more power to actually determine how decisions about values are made in corporations. So there are trade-offs. If we tell people there is a win-win situation, I think it's easy, but I don't think everything is win-win. I think that in many situations there is a cost. As I said earlier, you need to pay some cost to make borrowing more secure. Are you willing to pay or not? I think that most people individually would like to do that. But then as a company, they end up not doing that. I think that that to me is a major failure. And I think what we need to have is some involvement and some honesty, first of all, I don't think that most companies will have the car.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I learned that the reason why there are so many charlatans in the spiritual dimension is because the spiritual dimension is so important. We are trying to find a higher purpose and we have a lot of organized religion, but you have a lot of also charlatans around. But the space for charlatans is proportional to how important the topic is. So I think that the issue of environmental social responsibility governance is a little bit on the side because I think we've made a lot of progress on that dimension. But the issue of the environment, the social are very, very big. As a result, the world is populated by a lot of challenges. And a lot of people who pretend, and I'm not saying that all of it is like this, but I think that we need to do some serious work.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“How do you think the ESG movement, environmental society and governance, which aims to apply somewhat quantitative metrics to how companies are run for ESG reasons, how successful has that been? It's become increasingly large in the US and very large in Europe. So one of the successes of that been in your view, as well as the shortcomings?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Because very often it's convenient to make a lot of money, be punished, and then ask for forgiveness or go to the Cayman Islands and live happily ever after without facing any responsibility.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“In which I can even remotely think that if the game is fair, I can win. But, you know, for $100 million, the temptation to play on other margins, like, for example, trying to corrupt the referee or to change the rules of the game or to play a bit of a strong sort of a elbowing game or whatever are pretty strong. And so one of the lessons that you learn in economics is when you increase incentive schemes on one dimension, you need to increase the incentives in the other dimension as well. Otherwise, this will lead to a stronger symmetry. And so if we want to keep people motivated, high paper performance is good, but on the other hand, there should be a very strong sort of punishment if you deviate. Also strong monitoring to avoid them to deviate to begin with.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I think that they do incentivize behavior, especially the equity market. I think that when it comes to trying to maximize profits, I think we have done remarkable progress since the 70s to today. My concern is that we're not made equal progress on other margins, in particular when you have a very steep incentive scheme when a lot of money rides on you succeeding, I think that the incentives to cheat and hide, et cetera, become very big. I always tell people, imagine that they put me in a basketball court and they tell me that if I win a game, I gain $100 million. Not only I'm short, so I'm already handicapped from basketball, but I don't know how to play basketball. So there is no way.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Do you think that public markets, I'm not just talking about markets, but the bond market, the stock market, help with corporate governance? In other words, they incentivize good behavior or do they do more harm than good in terms of corporate governance?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“You don't need to be a scientist to understand there is something deeply wrong. But they were able to explain themselves out. And it says, there are a lot of money on the table, you'll be surprised of how people can be convinced. In fact, there is a very famous sentence by Athol Sinclair. It's impossible to convince people of something whose salary depend on.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Oh, I think Wild Fago is another one we mentioned before. I think about Merck. I don't know if you remember that Viox scandal. The Viox was an anti-inflammatory that was walking in a different way than the traditional anti-inflammatory like aspirin or live. You know, it was tested. And in a clinical trial, they show that VAX was a little bit better on the stomach. However, they were five times as many health-related accidents than if you took Alib. In spite of that was approved and for three years was in commerce, the estimate is, I don't know how many thousands of people have died prematurely as a result of that. It's pretty stunning because the board member was composed of very smart people. But if you read the study,”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Boeing comes to mind as a public example of corporate malfeasance. What else comes to mind in terms of something which a company which in recent memory has really crossed the line to use a very salient example?”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I don't want board members who are too educated in data analysis. And so if I want to become a board member, I don't want to take the course because the course will disqualify me rather than qualify me.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“politics don't want to take that responsibility they are fighting back but i think that that's a very important issue because i think that with good auditing and good inspections you can monitor a lot of things and i have been on boards of companies in italy for several years and i've seen sort of how things get hidden when they want to hide them and how can be revealed by good inspection and good auditing so i think especially these days with statistical method and data analysis i think that is very very possible to have a good monitoring system in fact i would claim that somebody should write a program or do a course of data analysis for board members but you know again there is no demand for this because if i see”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“An interesting topic for today is that there is a big fight between the PCAOB, which is the creation of sub-oxygen, the PCOB for the listener, is the public company accounting oversight board. It's probably the most important agency you never heard of. Their job is to audit the auditors. And the PCOB has issued a rule that say that auditors are responsible also to report non-compliance by the companies. So that if I am the auditor and I notice something that is problematic, I have an active duty to report to the board of directors to the head of the risk committee and so on and so forth. And I think that”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Choices so many times that at the end nobody's responsible, right? And I think that that's problematic because you want people to feel a responsibility because they are going to act against it. And I think that 99% of the people, if they say, look, you make a little bit of money, but you really put at risk thousands of people falling down from the sky, they're not going to do it. And it's just people are motivated by money, but not only by money. The problem is that nobody feels that responsibility and everybody said, oh, I do my job, but I let somebody else do it. And that is passing the hot potato to somebody else at the end, nobody's responsible. And that's a cause of a lot of problems. So I think that in that dimension, this is important. The other thing which...”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“One of the important point of southern oxygen that was very contentious at the time was Section 404 that acquires companies to have internal controls to make sure that cash doesn't disappear from the face of Earth. And I think that in that respect has been fairly good as a result of that. Not perfect, but fairly good. Companies fought very aggressively against Section 404. But I think the result has been overall positive. One of my suggestions would be to extend this internal control system, integrity of the intelligence system, also for other dimensions like, for example, safety of pollutions or stuff that otherwise is not reported so that there is a clear channel of responsibility because in Boeing, you fracture the responsibility of”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“I am a big fan of the whistleblower statue. I think that it's been very, very useful in fraud against the government and also in IRS fraud. And since it has been introduced in a dull-created form in corporate fraud, has also improved. So I think that we should do some of that, but I think that it's a question of carrot and stick. You should add a carrot, but you should also add the stick and show a responsibility. And certainly, we want to avoid any confidentiality agreement when the life of people is at risk. So the fact that I inspect a bridge, I find a bridge to be dangerous, but I cannot say that because I have a contract with a company seems to be against the public interest.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT
“Is at risk. You have a duty to report even if you have nothing to do with a breach. It's a bit like if you're a policeman and you are on vacation, you have a duty to intervene when you see a robbery. I think that if you are a civil engineer, an expert in breaches, you need to intervene. My understanding is this is not the case in Italy. And what this company did is they hire multiple consultants. And until they got the right answer, right? So they go to the first consultant, the first consultant say, oh, this is problematic. We don't like you. Next one, and then finally, you find somebody that say everything is fine. But all these consultants were bound by the Constitution Charity Agreement. So they did some tests. They knew that the bridge was at risk, but they had no ability to go and expose this publicly, which is credible.”
2024-03-07 · Forward Guidance · The Erosion of Institutional Accountability | Dr. Luigi Zingales on Bank Failures, Whistleblowing, and The Fed · IDENTIFIED FROM THE TRANSCRIPT