In January a panel of distinguished private equity professionals spoke to members of the Columbia community on the outlook for regulatory reform across the globe in the wake of the financial crisis. This panel was part of Columbia Business School's 16th Annual Private Equity and Venture Capital Conference. Panelists included moderator David Carey, senior writer for The Deal, LLC; Steven Davidoff, associate professor of law at University of Connecticut Law School; Micah Green, partner at regulatory advisory group Patton Boggs; and Kirk Radke, partner at law firm Kirkland & Ellis.
The discussion began with a synopsis of Washington's regulatory response to the financial crisis. "Following the $750 billion bailout, there was always going to be a pound of flesh in return," said Micha Green. "TARP evolved into an equity purchase program; [Treasury Secretary Henry] Paulson told larger banks they would volunteer, and the Administration simultaneously called this a bailout (coincident with AIG events)." Mr. Green also noted that several trillion dollars went to various financial institutions, while many Americans lost their jobs and others fell behind on mortgages. Subsequently, banks are repaying their borrowed funds, but there is huge headline risk relating to executive compensation.