On October 22, 2012, the Atlantic Council hosted a members’ roundtable with Dr. Simon Johnson, the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management, on the issue of financial reform and what steps the United States should take in order to prevent a repeat of the 2008 financial crisis.

Unfortunately, financial reform has been largely absent from the political dialogue during the current election cycle; however the possibilities of another global financial meltdown remain if no further reforms are implemented. Dr. Johnson discussed several ideas from moderate politicians and economists on either side of the political aisle outlining how to reform the financial sector in a way that both removes economic distortions and lowers risk. Dr. Johnson identified three fundamental issues: limiting bank size, lifting capital requirements, and reducing the complexity of financial products. Dr. Johnson also emphasized that there is widespread agreement that labeling certain banks as “too big to fail” both limits competition and entrenches systemic risk. Still, without an imminent threat to the system, there is little political will to institute the right kind of change.

In addition to his position at MIT, Dr. Simon Johnson is also a senior fellow at the Peterson Institute for International Economics, a cofounder of BaselineScenario.com, a member of the Congressional Budget Office’s Panel of Economic Advisers, and a member of the FDIC’s Systemic Resolution Advisory Committee. He is also a member of the private sector systemic risk council founded and chaired by former FDIC chair Sheila Bair. He holds a BA in economics and politics from the University of Oxford, an MA in economics from the University of Manchester, and a PhD in economics from MIT.

This roundtable is part of a larger series of Corporate and Individual members’ programming, which seeks to provide members the opportunity to dialogue directly with experts and policymakers on the most relevant topics of the day.