I think the credit default swaps can take the place of the rating agencies who really have missed the ball in this procedure and are quite conflicted by the way the ratings are paid for. So, I would like to see credit default swaps become an evermore important way of understanding credit risk in the economy.
Robert F. EngleA lot of ambitious code has been written into the law for those and we will have to see if it actually works, if we have another example of a big financial institution going bankrupt.
Robert F. EngleI think global coordination is tremendously important. I hope we can see this happening through the G20 and through coordination of regulatory regimes around the world. I guess those are the main features of this bill that are important.
Robert F. EngleThere are a lot of ways that investment banking models work, but these risks are not internalized by the people that are taking them.
Robert F. EngleWell if you've got information about a company, or you believe that a company is undervalued, you can go out and buy their stock and you can make some profit on it.
Robert F. EngleI agree with a lot of the points in Taleb's book, but I don't agree with many of his conclusions. It seems to me that he rightly points out that risk managers miss a lot of the risks, but the conclusion is that he draws, is that we should abandon risk management, whereas my conclusion is we should improve it.
Robert F. Engle