Restoring Trust: Financial Crises and Regulatory Responses in the Bush Era and Beyond
Thursday, March 3, 2016
5:00 p.m. Reception
5:30 p.m. Lecture
The Honorable Richard C. Breeden
24th Chairman of the Securities and Exchange Commission and
Former Assistant to the President for Issues Analysis
The Mosbacher Institute’s Conversations in Public Policy series continued on Thursday, March 3, 2016, with a talk by Chairman Richard C. Breeden, the 24th Chairman of the Securities and Exchange Commission (SEC) and former Assistant to the President for Issues Analysis under President George H.W. Bush. He was engaged in an on-stage conversation by Chairman Donald E. Powell, the 18th Chairman of the FDIC. After welcoming remarks from the Dean of the Bush School of Government and Public Service, Ryan C. Crocker, and an introduction of the two chairmen by Dr. Lori Taylor, Director of the Mosbacher Institute, Chairman Breeden delivered his prepared remarks centering on regulatory relief.
Chairman Breeden’s work under then Vice President Bush was to identify overbearing agency rules and decrease the regulatory costs and burdens imposed by those rules. He insisted regulations, while necessary, should not hold back consumers. Instead, appropriate financial-market regulation balances safety and soundness, consumer protection, and competition and efficiency. Breeden also insisted regulations should not prevent consumers from investing, regardless of whether investments are safe or risky.
Breeden next discussed the savings and loan crisis President Bush faced when he assumed the Presidency in 1989. Breeden recalled President Bush’s determination to solve the problem, no matter the pain, and his insistence the program do its job. President Bush used his “honeymoon” period working with Congress to ensure the crisis was addressed. Breeden opined that the President’s dedication to resolving the savings and loans crisis was his finest domestic accomplishment.
Following these remarks, Chairman Powell joined Chairman Breeden on stage to discuss the government’s role in controlling capital markets and how the 2008 financial crisis might have been handled in hindsight.
In addition to his presentation, Chairman Breeden enjoyed several meetings with students and faculty, including speaking to Dr. Taylor’s class on Public Finance and Dr. Mary Hilderbrand’s class on Institutional and Governance Reform.
L-R: Dean Ryan Crocker, Chairman Richard C. Breeden, Chairman Donald E. Powell, Dr. Lori Taylor, and Fred McClure, CEO of the George Bush Presidential Library Foundation
Dean Ryan Crocker
Dr. Lori Taylor, Director of the Mosbacher Institute
Chairman Richard C. Breeden
Chairman Richard C. Breeden and Chairman Donald E. Powell, the 18th Chairman of the FDIC
24th Chairman, U.S. Securities and Exchange Commission Chairman, Breeden Capital Management
Richard Breeden served as the 24th Chairman of the U.S. Securities and Exchange Commission from 1989 to 1993, a time of tumultuous change in geopolitics, markets and technology. He was appointed to this position by President George H. W. Bush, and he was unanimously confirmed by the US Senate.
After beginning his career practicing securities law and corporate transactions in New York, Breeden came to Washington in 1981 to work in the Administration of President Reagan and Vice President Bush. For several years Breeden served as Deputy Counsel to Vice President Bush, working primarily on efforts to curtail the burdens of excessive regulatory programs. He also served as staff director of a multi-year study led by the Vice President on how to improve effectiveness and reduce excessive costs in the US financial regulatory system.
Following President Bush’s inauguration, Breeden became Assistant to the President for Issues Analysis, focusing on long run domestic and economic policy issues. In particular, Breeden led the White House effort to end the financial crisis in the U.S. Savings and Loan industry, which was imperiling over $1 trillion in deposits of more than 110 million Americans. Only three weeks into his term in office, President Bush announced an aggressive program using $500 billion in bonds to finance the closing of hundreds of insolvent firms, while protecting their depositors and making a wide variety of corrective regulatory changes. The President’s program also created the Resolution Trust Corporation, which helped sell the assets of failed firms back into private ownership to repay the program’s costs. The President’s leadership won strong bipartisan support, and the program swiftly ended decades of instability.
In late 1989, President Bush nominated Breeden to lead the SEC. Under Chairman Breeden’s leadership, the SEC overhauled its rules to allow large and small companies to raise capital with fewer barriers and lower expense. It also worked to promote investor interests through many initiatives such as better accounting and disclosure standards, access to new types of mutual funds and investment products (authorizing the first ETFs, for example), and improved proxy rules. While he reinvigorated the SEC’s efforts to fight fraud through greater resources and stiffer penalties, Chairman Breeden also supported many initiatives to lower barriers to innovation and competition, and to use market mechanisms in place of regulation wherever possible.
With the fall of the Berlin Wall, Chairman Breeden led the SEC in reaching out to assist many “emerging market” countries around the world in creating or improving US-style capital markets, and to improve global cooperation in investigations of illegal conduct. Working with countries from Eastern Europe to Latin American to China, the SEC helped make global markets more efficient, and safer. The SEC also assisted hundreds of foreign companies to raise capital in the U.S. for the first time, and to accommodate themselves to more robust and timely disclosures to investors. Overall, Chairman Breeden’s tenure at the SEC resulted in many long lasting benefits for the US economy and for investors that have stood the test of time.
In the years since leaving the SEC, Breeden has pursued a wide range of activities including consulting with businesses and government agencies, running successful investment partnerships and serving on more than a dozen corporate boards in the U.S. and Europe. As a bankruptcy trustee, corporate monitor or board advisor, he has helped several major firms including WorldCom/MCI, Inc. and the accounting firm KPMG through restructurings or law enforcement oversight as a result of financial or ethical crises.
Breeden is currently assisting the Department of Justice in managing a fund to pay more than $4 billion in forfeited assets to victims of the crimes at Madoff Securities. Breeden has administered similar funds to compensate victims of unlawful conduct at WorldCom, Enron, and other companies where illegal conduct damaged investors. By the end of the Madoff case, he will have evaluated over $160 billion in damage claims from investors, and will have distributed over $8 billion to compensate more than 1.5 million victims of illegal conduct.
Breeden is a graduate of Stanford University, and the Harvard Law School. He and his wife Linda live in Greenwich, CT, and he is the proud father of five sons. In 2016 he received the William O. Douglas Award for lifetime achievements on behalf of investors from the Association of SEC Alumni.
In the course of his career of over 40 years, Breeden says that George H. W. Bush is the greatest man he has ever known, and a continuing inspiration. His time working with the President remains the greatest privilege of his life.
Former chairman of the FDIC
Donald E. Powell became the 18th Chairman of the U.S. Federal Deposit Insurance Corporation (FDIC) on August 29, 2001, and served through late 2005. He resigned to become Federal Coordinator of Gulf Coast recovery efforts following Hurricanes Katrina and Rita.
A life-long Texan, Powell has close to 40 years of experience in the financial services industry. Prior to becoming FDIC Chairman, Powell was President and CEO of The First National Bank of Amarillo, which he started in 1997. He began his banking career in 1963 as Loan Officer and Secretary at the First Federal Savings & Loan of Amarillo. In 1971, he joined Boatmen's First National Bank of Amarillo, where he became Chairman, President and CEO. He left Boatmen's to start The First National Bank of Amarillo.
He has served on a variety of boards, including Chairman of the Board of Regents of the Texas A&M University System, as a Director for the Bank of America Corporation, and Chairman of the Amarillo Chamber of Commerce. He is currently the Chairman of the Bush School’s Advisory Board.
Powell also has a long history of community service, ranging from the City of Amarillo Housing Board to the Franklin Lindsay Student Aid Fund and Cal Farley's Boys Ranch. He also has served on the boards of High Plains Baptist Hospital and the Harrington Regional Medical Center.
Powell received his Bachelor of Science degree in economics from West Texas State University and is a graduate of The Southwestern Graduate School of Banking at Southern Methodist University.
George Bush Presidential Library and Museum
1000 George Bush Drive West
College Station, TX