Malloy's Financial Advice Resonates in Europe
July 21, 2011
Professor Michael Malloy took center stage on July 19, 2011, at the 8th Annual International Law Conference in Athens, and his presentation echoed loudly when European leaders announced a sweeping expansion of the role of their European Financial Stability Facility rescue fund to help nation states such as Greece.
In his paper, “Zone Defense: The Euro Zone and the Crisis in Financial Services Markets,” the Pacific McGeorge Distinguished Professor and Scholar argued that the crisis in the Euro Zone countries underscores the need for aggressive, systemic supervision and regulation, not a dismantling of the Euro Zone. He criticized the slow response to the fiscal crisis in Greece and Ireland.
Asked what he would recommend to the parties involved, Malloy said “To begin with, Greece should have suspended all external payments and announced its intention to default, absent effective renegotiation of the external debt. This would have driven the parties to the table and a broad restructuring or ‘re-profiling’ could have occurred. Instead, preserving the Euro was the main theme, to Greece’s detriment.”
Two days later, the European Commission advocated a “temporary default” for Greece to push forward a bond-swap restructuring of Greek external debt.
An internationally recognized expert on bank regulation, Malloy speaks annually at the International Law Conference, which is sponsored by the Athens Institute for Education and Research. The former SEC enforcer and bank regulator has authored or edited more than 100 books and book-length supplements in fields such as international banking.