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NYU Stern Professor Eric Dinallo Testifies Before the Financial Crisis Inquiry Commission
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On July 1, NYU Stern Professor and former Insurance Superintendent for New York State Eric Dinallo appeared before the Financial Crisis Inquiry Commission for a hearing on the role of derivatives in the financial crisis, specifically with respect to AIG. Professor Dinallo was Superintendent of the New York State Insurance Department from 2007-09, including the time of AIG’s financial troubles and the US financial crisis.
Professor Dinallo recounted that the source of problems was AIG's Financial Products division, a systemically risky entity owing to its relationships and transactions with many major commercial and investment banks in the US and around the world. He explained that deregulation allowed and encouraged risky financial practices; he called for specific regulations -- for example, requiring financial institutions to hold specific capital and reserves -- to keep similar crises from happening again.
Professor Dinallo joined NYU Stern as the Henry Kaufman Visiting Professor of Finance in September 2009. Prior to joining Stern, he served as the 39th Superintendent of the New York State Insurance Department where he was a national voice for efficient, effective regulation to protect both consumers and foster a healthy, competitive market for insurance.
Read Prof. Dinallo's written testimony>>
Professor Dinallo recounted that the source of problems was AIG's Financial Products division, a systemically risky entity owing to its relationships and transactions with many major commercial and investment banks in the US and around the world. He explained that deregulation allowed and encouraged risky financial practices; he called for specific regulations -- for example, requiring financial institutions to hold specific capital and reserves -- to keep similar crises from happening again.
Professor Dinallo joined NYU Stern as the Henry Kaufman Visiting Professor of Finance in September 2009. Prior to joining Stern, he served as the 39th Superintendent of the New York State Insurance Department where he was a national voice for efficient, effective regulation to protect both consumers and foster a healthy, competitive market for insurance.
Read Prof. Dinallo's written testimony>>