David Zaring

Professor at Wharton. Financial regulation, administrative law.

[David Zaring @ZaringDavid]

Kalsi has a politics tab, and a Supreme Court tab, but regulations ... not yet. A couple of low $ EPA policy changes, but nothing like that for the SEC, the FDIC, or OCC. The Fed has plenty of monetary policy action, but little else, other than this: https://t.co/sVDQ0EXwhf

[David Zaring @ZaringDavid]

The FDIC is trying to federalize its reach in a way that makes sense to me, someone who banks with an FI with no presence in PA. https://t.co/yLbVkm9eXQ

[David Zaring @ZaringDavid]

OCC's final approval of Coinbase's trust charter took 6 months - that's faster than Ripple (318 days) and Paxos (338 days so far), but slower than Fidelity or BitGo. I'll be interested to see if ICBA amends its complaint to add Coinbase as a defendant. https://t.co/MsEOfy6Osv

[David Zaring @ZaringDavid]

Other than the Trump firms, the list of companies to investigate from Team Warren doesn't really differ from the list put together ten years ago. https://t.co/B9yqCdSEXr

[David Zaring @ZaringDavid]

... will do that, and, I dunno, tech service firms will not. Is AI making the bank unsafe and unsound? Then consider it, but don't bother if it isn't. 2/2

[David Zaring @ZaringDavid]

This guidance from OCC to supervisors - consider AI, but don't consider it as its own thing - is familiar. It's why Trump regulators have opposed a climate rule at the SEC, public companies already have to disclose materials risks, so ski resorts ... 1/2 https://t.co/qcfmj51cfU

[David Zaring @ZaringDavid]

It would be funny if it took a wave election to make this obviously correct, small ball, good governance thing happen. I, for one, am calling on the next Congress to update the Paperwork Reduction Act to better handle electronic forms.

[Tyler Gellasch @TylerGellasch]

Merge the SEC and CFTC.

Two separate regulators adds complexity, costs, and confusion for everyone. It creates market risks with massive regulatory arbitrage- which have never been greater. And it costs taxpayers a fortune. End it.

[David Zaring @ZaringDavid]

This story about AML evasion has a lot - it shows that KYC is tough to do, that a small bank in China isn't doing it for Russian and Iranian shellcos, and that the US won't sanction it because China will get mad. And then there's the why go public angle - reputation? wit's end?

[Alexander Osipovich @aosipovich]

New: ZCCB, an obscure regional bank in eastern China, has emerged in recent years as a key conduit for Russian and Iranian money flows. But even as it raised red flags under both Biden and Trump, the US held off on sanctioning it. With @RoryWSJ @kowsmann https://t.co/TiaOoxfj6K

[David Zaring @ZaringDavid]

I will co-sign this. AI was lame 3 years ago, now it is amazing, and the entire economy is being reoriented around it. It probably will not change the world as much as some think, but I find the degree of change, with no public oversight at all, to be unsettling.

[Sylvain Catherine @sc_cath]

My views on AI have radically shifted over the past few weeks, after spending way too much time reading about it and watching interviews of industry leaders and experts.

First, I really love the tools. I spend $200 on Claude every month and the product is worth every penny for me. Probably even more. I think the existing tools can deliver significant increase to future GDP and help us solve major global challenges faced by humanity.

However, I just cannot comprehend why the industry is not much more regulated, as its leaders and employees seem to request themselves. I meet a lot of people who have heard of the hugging face incident but don’t know the actual chain of events. If you don’t, you definitely should spend a least an hour reading about it.

I also do not know why we need to follow the path that frontier labs are following, to develop ever more powerful models. It seems to me that they are enormous gains that are readily available if we deploy the current technology in economic and scientific organizations without pursuing a super intelligence that they say might kill us and more likely wreak havoc in society. I know a lot of people think these warnings are marketing tricks, and that’s a reasonable assumption. But I don’t see the point of taking such risks.

My median scenario is that of many economists: AI will diffuse slowly and lift gdp growth by a percentage point or so, will cause some economic disruption on the way, but ultimately people will get new jobs and maybe work less.

However, I am deeply uncomfortable with the absolutely wild level of uncertainty around this prediction. And to be honest, even setting the doom scenarios aside, I find the utopia scenarios of some industry leaders actually dystopian. And I think a large majority of the public would agree if they paid attention to what they’re saying. To their credit, they themselves agree publicly that they should not be the ones making these choices. A large majority of the public is now very skeptical of AI as a source of human progress, in particular among younger adults who use it the most. They should have a say.

I don’t want to convince you of anything but to get informed about this topic, express yourself and vote accordingly.

[David Zaring @ZaringDavid]

I did not realize that law professors comprised 75% of the quartet behind the California wealth tax proposal! (And where is Zucman?) I'm not sure my business school colleagues would be surprised, though. https://t.co/C2sAAJSGx7

[David Zaring @ZaringDavid]

Further reading from my prescient colleague @Petercontibrown, who saw that this was happening in 2016! 2/2 https://t.co/7Mx85IRHil

[David Zaring @ZaringDavid]

With Lagarde leaving the ECB, the run of lawyers running central banks will end? Mais non! JD onlys on the Fed Board: Warsh, Bowman, Barr, Powell, v. three economists, ending the Ph.D era before Powell, which ended the banker/lawyer era in the 60s. 1/2 https://t.co/REB51NFUFB

[David Zaring @ZaringDavid]

@rakespro It might appear so, but I'd want to see a string of firms collapsing ... then we really would be in the world of bank runs.

[David Zaring @ZaringDavid]

@PatAndriola Agree, if banks are still partnerships. As they corporatize, deferred compensation has to be the way to go? Though that's bad for rock stars. Anyway, the Morley was pointed out to me by someone else, don't want to take too much credit. I'm guessing he will get some calls!

[David Zaring @ZaringDavid]

Two instances of people comparing biglaw to banks. This arguing for deferred compensation to handcuff partners to their firms, and John Morley arguing that the partnership model leads to runs, as partners try to beat each other out the door. Why not both? https://t.co/ppjR3122fT

[Rohan Goswami @rogoswami]

Weil‘s imminent collapse is freaking out Big Law — a problem largely of their own creation. What is the solution? Perhaps they need to take some cues from their banking brethren. @semafor

https://t.co/mjuJULNSgl

[David Zaring @ZaringDavid]

This memo on large bank CEO pay - increasing quite a bit through one time awards, with investors expressing concern in say-on-pay votes, is interesting throughout. https://t.co/fkpcrv87ap

[David Zaring @ZaringDavid]

Warsh wants the Fed to talk less, and people have observed that board members and reserve bank presidents give speeches all the time - except right before an FOMC meeting, which is why the last Fed speech, by Bowman on supervision, was published on 10/14. https://t.co/XZsDUHG7Qs

[David Zaring @ZaringDavid]

My LLM says it's an extreme outlier, and the AI-related companies Coreweave and Cerebras, also out recently with S-1s, don't go there (they each discuss natural disaster catastrophes only). 2/2

[David Zaring @ZaringDavid]

Anthropic's S-1 deploys the catastrophic/e term 10 times, 6 of which are about AI existential risk. Something of a bummer S-1, though by design, the form is dedicated to worst case scenarios. 1/2 https://t.co/j1H6WuL2h2

[David Zaring @ZaringDavid]

Community bankers almost always lean right, but the Kansas Bankers Assn is spending $1 million against Republican senator Roger Marshall. The issue: the endless fight between bankers and retailers on swipe fees; he also wants to cap credit card rates. https://t.co/fGLAXItmut