The Sunny Side Of Financial Regulation

Since the financial crisis began, the Securities and Exchange Commission and members of Congress have been examining the financial regulatory environment. Some people in the financial industry seem to be excited about the idea of new regulations, which they say could lead to more business and more jobs.

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RENEE MONTAGNE, host:

Imagine spending a day with people who work in finance on Wall Street. That must be a depressed group. They're suffering huge losses, surrounded by massive layoffs and scorned by many of their fellow Americans. NPR's Adam Davidson actually did spend a day this week with finance professionals and found that some of them are downright giddy.

ADAM DAVIDSON: This week was the annual conference of SIFMA, a finance industry trade group. It was at the Mariott Marquis Hotel in Times Square, and I told Lynnette Hotchkiss, head of the Municipal Securities Rulemaking Board, that I thought everyone would be really down.

Ms. LYNNETTE HOTCHKISS (Municipal Securities Rulemaking Board): You know, I've been at these conferences for about 10 years and this is the most crowded and the most energetic, and...

DAVIDSON: Energetic?

Ms. HOTCHKISS: Yes. Yeah, clearly people are interested in what the speakers have to say about the future of regulation.

DAVIDSON: Did you hear that? The future of regulation. For Hotchkiss and a lot of other people here, the shock and pain of the past few weeks has given way at least a little bit to hope.

Ms. HOTCHKISS: It is a wonderful opportunity to look at the entirety of the financial regulatory framework in the United States and maybe start with a blank sheet of paper.

DAVIDSON: A blank sheet of paper. Hotchkiss says, a lot of US regulation was a panicky response to the last big crisis - you know, the Great Depression - so it's outmoded and confusing, it drives people like her crazy and now maybe they can throw all that old stuff out and get something that makes sense.

Ms. LYDIA DIGUIDO(ph) (Sybase): It's a good year for Sybase. It's a very good year for Sybase.

DAVIDSON: That's Lydia Diguido with, well, Sybase, and I had one question for her. What is Sybase?

Ms. DIGUIDO: OK, Sybase is a data management company that specializes in managing and mobilizing information to the point of action.

DAVIDSON: I have no idea what any of that means.

Ms. DIGUIDO: Did you ever put money in a bank? OK. Did you ever trade stocks?

DAVIDSON: Mutual funds.

Ms. DIGUIDO: OK...

DAVIDSON: I think I'm going to take over here, I learned that Sybase software helps banks keep careful track of all the things they buy and sell. Diguido says they've been selling a lot of their software this year. Why? Because - here's her sales pitch - Sybase gives financial companies the tools that could have predicted the current crisis if they were used properly.

Ms. DIGUIDO: That's not to say we're seers over here, but it's very clear...

DAVIDSON: Seers, you mean like prophets?

Ms. DIGUIDO: Seer, like S-E-E-R. We're not seers, but.

DAVIDSON: Two years ago, three years ago like you were saying, people didn't care what their data showed, just hey, we're making money.

Ms. DIGUIDO: Exactly, exactly. And now that's not necessarily the case.

DAVIDSON: You need to know your data.

Ms. DIGUIDO: And you need to also - you need to know your data and you also need to demonstrate certain things to regulators that maybe you didn't have to in the past.

DAVIDSON: There were a lot of people at this conference who had ideas for making money in the new post-crisis, new regulation economy. One man sells software that monitors every phone call that employees in a bank make. He says proudly that it's just like what the NSA does - eavesdrop to find dangerous activity. He's hoping Congress passes a law mandating that all banks record phone calls. He says several countries in Asia and Europe already do. Joe Sullivan runs International Market Recruiters, a headhunting firm specializing in financial professional temp work.

Mr. JOE SULLIVAN (International Market Recruiters): More regulation coming in next year should also help us to send people out.

DAVIDSON: More regulation means more accountants, more lawyers.

Mr. SULLIVAN: Potentially. It means more work is going to need to get done in a place where everybody's lean-mean already.

DAVIDSON: So, more temps. Look, a lot of people in finance, maybe most of them, are of course really scared and unhappy these days, but it's the American way to see opportunity even in the worst times. It probably should be kind of reassuring that even this month, even in New York you can find a conference full of finance people who are already planning how to profit from the crisis. Adam Davidson, NPR News, New York.

MONTAGNE: And you can learn more about the current state of the economy on our Planet Money podcast and blog, which you can find at npr.org.

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