Alumni Lecture Series - Howard Davies event

On Tuesday 9 February 2010, the LSE Alumni Relations team welcomed over 240 alumni and guests back to the School's Sheikh Zayed Theatre in the New Academic Building to hear LSE director Howard Davies deliver his annual alumni lecture on 'The Challenges for Central Banking in the aftermath of the global financial crisis'.

A podcast of the lecture is available here, and more photos of the event can be seen on the LSE Alumni Association Facebook page.

In his lecture, Howard explored research that demonstrated that central banks had got off quite lightly in the apportioning of blame for the current crisis compared to bank executives and governments, and commented on media opinion pieces by economists and academics, particularly in the UK and the US, on the role of central banks in the global financial crisis.

He examined the charge sheet that various commentators have laid at the door of the central bankers and analysed their impact on the development of the crisis: too low rates for too long post-2001 in the US by the Fed, the narrow focus on retail price inflation, a less than rigorous approach to financial stability, the withdrawal of institutional supervision from 1997 in the Bank of England's remit and the Fed's failure to use its powers to supervise the mortgage market.

He analysed the various proposals to reform the role of central banks and concluded the restoration of responsibility for financial stability to the mandate of the Bank of England was a good thing.

The lecture was chaired by distinguished LSE alumna Rachel Lomax (MSc Economics 1968) deputy governor of the Bank of England from 2003 to 2008. She offered interesting insights into how the Bank of England and the Treasury had dealt with previous recessions and economic crises in the 1980s and 1990s. She and Howard agreed that one of the key challenges was that central bankers and regulators focused so much on dealing with the problems of the past such as inflation, that the dangers of the present, such as asset price bubbles, were not fully understood or appreciated.

The lecture was followed by a feisty and lively debate as alumni were keen to press Howard and Rachel on issues such as the role of global imbalances, whether the models of the housing markets in Canada and Australia had contributed to their less severe experience of the crisis, the tripartite system of regulation in the UK, the likelihood of efforts to create international guidelines for central banking being scuppered by national interests, the Obama administration's proposals to reform American banks, the debate on the separation of retail and investment banking, the proposed Tobin tax and the causes of the crisis.

The audience were then invited to the drinks reception where they had the opportunity to meet, network and enjoy further informal discussion with Howard and Rachel.