Future of Finance Initiative | mainefarmsforthefuture.com

If money and credit are the lifeblood of the economy, then finance is its cardiovascular system. When that system fails, as it did following the collapse of Lehman Brothers last September, the results can be catastrophic.

Last week, The Wall Street Journal assembled roughly 100 of the brightest minds in finance to discuss not just how to restart the global financial system, but how to reconstruct it, so both the spectacular excesses and catastrophic failures of the past decade can be avoided.

The group included financiers such as George Soros and Blackstone Group co-founder Stephen Schwarzman, prominent academics such as Nobel Prize winners Myron Scholes and Robert Engle, and former government leaders including ex-Treasury Secretary Robert Rubin and ex-Fed chief Paul Volcker. Using a deliberative process devised by The Journal, the group debated dozens of principles on which a new financial system might be constructed, and in the end adopted 20 of them, which are published in this report.

Participants were encouraged to keep their focus on the Future of Finance, but the current crisis was impossible to avoid. Treasury Secretary Timothy Geithner spoke to the group on the same day that he unveiled his plan for a new Public-Private Investment Program to buy toxic assets from the banks. There was considerable skepticism among members of the group about whether that plan would work, but also an eagerness to suggest ways of improving its odds of success.

The group also was urged to consider the problem in all its global ramifications. Australian Prime Minister Kevin Rudd, who addressed the group on its opening night, and British Prime Minister Gordon Brown, who addressed many of the participants in New York after the close, both emphasized the importance of coming up with new institutions that can manage a world with multiple, interrelated financial centers.

The Future of Finance Conference Opens

2:04

WSJ?s Heidi Moore and Annelena Lobb report from The Wall Street Journal?s Future of Finance Initiative, where U.S. Treasury Secretary Timothy Geithner is the keynote speaker. More than a hundred CEOs, investors and academics will meet to discuss the credit crisis.

The participants were challenged to set aside, as much as possible, their self-interest, and consider changes that were good for the financial system and society overall. But inevitably, self-interest reared its head. When the results of the deliberations were presented to Lawrence Summers, director of the White House National Economic Council, and to Prime Minister Brown, they were offered in that spirit: While they reflect the enormous knowledge and expertise of the participants, they also, to some degree, reflect their financial stakes as well.

One underlying theme of the discussions was that, in the end, Wall Street and Main Street are in this together. The people on Main Street can?t survive without a functioning finance system. And those on Wall Street can?t hope to prosper until they?ve repaired the social rift that has been graphically demonstrated by, among other things, the outburst of public anger over the bonuses paid to executives of AIG.

As several speakers pointed out, the world today faces not only a financial and economic crisis, but also a political and social crisis. To be successful, solutions must address all aspects.

? Alan Murray

Printed in The Wall Street Journal, page R1

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