I was in Washington on February 19 attending the inaugural meeting of a non-partisan, non-profit organization that could best be described as a “Project” or “Think Team.” Unlike “Think Tanks” with resident scholars who apply their thinking to pressing political and economic issues as they evolve, the “Financial Regulation Reform Collaborative” or simply, “The Collaborative” is a new concept for a new era. With a projected life of 18-24 months, The Collaborative’s mission is to find solutions for reforming financial services regulation for the overall benefit of the public.

It is based on two premises -

• Financial services regulations have served the public poorly through poor design and execution during a time of problematic business practices. The design of and principles guiding financial regulations require fundamental rethinking.
• To ultimately benefit the public, financial services regulatory reform must protect consumers and investors while, at the same time, ensuring that the financial markets innovate and operate efficiently.

Last week’s gathering, under Chatham House Rules, was comprised of 50 distinguished academic economists, consumer finance advocates, ex financial market regulators, legal scholars, congressional staff representatives and representatives of financial institutions. A series of panels delved into the questions of how to best approach ensuring the safety and soundness of the financial system in the future, the various paths and probable outcomes for regulatory reform and how best to build safety nets and controls into the system for the sake of consumer protection.

After watching the Congressional hearings last week in which 9 CEO’s spent 6 hours answering questions about TARP funding, executive compensation, getting lending flowing again and interest rate changes since the initial infusion of Federal Capital, it was refreshing to be in a room of knowledgeable industry executives, some of the leading banking and finance institutions’ executives, legal and economic scholars and former regulators, actually delving into and discussing paths out of this mess. The diversity of attendance, the deeply engaged participation of everyone and the substance of the discussion left me hopeful that this group may actually make a difference and be heard.

Major details about the FRRC will be “airing” shortly. In the meantime, I would be happy to connect you with this group. Please just drop me an email. I believe this group has promise and could provide significant input and value to our lawmakers as they try to sort out the best course of action.