Saurav SinghNovember 8, 2023Last Updated: November 9, 2023
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Robert F. Engle Quotes
Robert F. Engle is an American economist. Robert F. Engle was awarded the Nobel Prize in Economic Sciences.
Famous Quotes by Robert F. Engle
Credit default swap gives you something to do. You can buy some credit default swaps from them to protect yourself against the bankruptcy of people who owe you money.I mean, we’ve always had gold bugs, but now we sort of realize that Treasure Bills might be in the same category. And we have derivatives like credit default swaps which are in this category, and we have derivatives like volatilities that are actually an asset class that we can invest in which are now – would out perform if we have another financial crisis.I think we’re fooling ourselves if we think that regulators are going to be able to outsmart the bankers. So, the task of designing regulatory reform is trying to make more or less foolproof regulation and that’s one of the advantages of the systemic category.I think global coordination is tremendously important. I hope we can see this happening through the G20 and through coordination of regulatory regimes around the world. I guess those are the main features of this bill that are important.So what is the role that credit default swaps can play in an economy? Well my feeling is that if these things actually will now be traded on either exchanges or some kind of central clearing, they are going to be a very good measure of the credit worthiness of different companies.I agree with a lot of the points in Taleb’s book, but I don’t agree with many of his conclusions. It seems to me that he rightly points out that risk managers miss a lot of the risks, but the conclusion is that he draws, is that we should abandon risk management, whereas my conclusion is we should improve it.The collateralized debt obligation, the CDO, is a structure which allows you to more or less continuously choose how much risk you want to take in a whole batch of securities. And the reason why they got us into so much trouble is that it’s hard to figure out how much risk you really are taking.Well if you’ve got information about a company, or you believe that a company is undervalued, you can go out and buy their stock and you can make some profit on it.That is, many times we’re not risking our own money, we’re risking somebody else’s money, or maybe that someone is going to back stop or downside, but we still get the upside.There are a lot of ways that investment banking models work, but these risks are not internalized by the people that are taking them.That is, many times we’re not risking our own money, we’re risking somebody else’s money, or maybe that someone is going to back stop or downside, but we still get the upside.I’d like to see a little more action on the energy side of things. I’ve been pushing for some kind of a carbon tax for years, and it seems to me we’ve had lots of opportunities to do it.
