Perspectives on Financial Restructuring

As Henry Kissinger used to say in our White House staff meetings, when discussing economics, "It is with an unaccustomed sense of humility that I address you on this subject." This distinguished group of scholars and practitioners, all pros on the subject of financial restructuring, requires me to approach the subject in the same way. While my background gave me a certain familiarity with the workings of the financial system, not the least of which was trying to meet my borrowing commitments, I must admit restructuring of the system was not a primary concern of my past. That changed dramatically as I began to work my new job at the Federal Deposit Insurance Corporation-the FDIC. My colleague in the Ford administration, former Treasury Secretary William Simon, early on observed that most regulators and legislators approached the subject of banking law reforms as though they were trying to reenact the old fable about the blind man and the elephant. After due consideration, his perception changed. He decided that an elephant was by far too clean, noble, benign, and, above all, petite, to accurately, or humanely, compare with the body of banking regulations. When he made the comparison in later years, he felt he had to swap a brontosaurus for the elephant to get things in proper scale. Of course, my comments are to be about perspective, and perspective, or the lack of it, is what the old fable is about. I would guess