A Note from the CFP Director It has been an amazing year of change and progress at the Center for Financial Policy during my first year as Director. The foundation that Dr. Lemma Senbet, our prior Director and my mentor, built has well prepared us for making further advances, and we have started on some very big initiatives. I’ll share those with you shortly, but, first, I want to review the year that we had, in case you missed some or all of our activities. First, we had a major change of leadership in many areas. Concurrent with my appointment as Director last September, Dr. Kathleen Hanley was appointed Senior Academic Advisor of the Center. Kathleen has had many years of experience as an academic (at the University of Maryland’s finance department) and as an economist-­‐
regulator (at the Securities and Exchange Commission and the Federal Reserve Board). Her research encompasses many aspects of our mission, including the structure of trading markets, systemic risk, and capital formation. Kathleen’s involvement has been instrumental in launching two new conference partnerships, with the SEC and with FINRA, both of which we intend to continue into the future. Last May, we held a first-­‐ever joint conference (of any university) with the SEC at their headquarters in Washington, with academic papers presented and open discussions of these papers. Our first joint conference with FINRA will be held this Fall on the structure of trading markets. I am very pleased to have Kathleen on board as she brings a wealth of policy knowledge to the CFP. Most of you know Michelle Lui, who was our former Assistant Director and who was invaluable to the creation and organization of the CFP. As a testament to her abilities, Michelle has assumed an even bigger role as the new Executive Director of the Financial Management Association, and is now located in Florida. We continue to maintain a link to Michelle as a “Special Affiliate” of the CFP, and wish her well in her new leadership role! On May 5th, our new Assistant Director, Ms. Kristen Fanarakis, joined us. Kristen is a former currency manager on the buy-­‐side for Putnam Investments in Boston, and sales-­‐trader on the sell-­‐side for Citibank, Morgan Stanley, and Merrill Lynch in New York. I am very fortunate to have Kristen join me, as she has an enormous amount of energy and talent, and she is helping to steer the Center in new directions in the private sector, as well as being key to our new fund-­‐raising initiatives. And, assisting us is another talent, Ms. Valerie Mahar, who is our Graduate Assistant for the next academic year. Valerie has deep experience with event-­‐planning, formerly with another center at Smith, and she also brings many valuable insights to the execution of our mission, which is to inform, learn from, and to help shape financial policy in the public and private sectors. Clearly, I am very lucky to have such a team! Now, to our activities of the past year. Let me list them briefly, since we have been fortunate to have co-­‐hosted several conferences and events in pursuit of our mission. Also, please note that the agenda and, in many cases, materials from the conferences are available at our website, www.rhsmith.umd.edu/centers-­‐excellence/cfp. Past Academic Year’s Activities and Events (Fall 2013/Spring 2014): 1. In October, we were host to the biennial Academic and Practitioner Conference on Mutual Funds and ETFs, sponsored by the Investment Company Institute—the leading organization representing the U.S. mutual fund industry. It was a big honor to be selected to co-­‐host this event, and academic participants presented papers on topics such as the effect of flows to ETFs on the prices of their underlying securities, and academics and regulators and mutual fund industry participants engaged in panel discussions on topics such as money market funds. Keynotes were delivered by 2. Also in October, Dr. Henry Kaufman, a major benefactor of the CFP, held “The Henry Kaufman Forum on Religious Traditions and Business Behavior” at the Smith School. Dr. David Sicilia, an academic affiliate of the CFP from the University Maryland’s History Department, headed up the organization and execution of this very interesting conference. Topics such as how religion can influence morally responsible behavior in organizations were discussed by some of the nation’s leading thinkers in presentations, and keynotes by Laura Berry of the Interfaith Center for Corporate Responsibility and Charles Geisst, Professor of Economics and Finance at Manhattan College. It was, indeed, a unique and very educational conference! 3. In November, we continued our yearly joint conference with the Mutual Fund Directors Forum, a non-­‐profit membership organization for mutual fund independent directors. The topic this year was fair-­‐valuation, which was timely as the SEC had recently charged eight former directors of a mutual fund with failing to oversee the valuation of portfolio securities. Professor Chester Spatt of Carnegie Mellon University was our keynote speaker. 4. In May, we held the above-­‐mentioned joint conference with the SEC at their headquarters. Keynote speaker was the SEC Chair, Mary Jo White, and academic papers on topics such as a proposed solution to the problems posed by high-­‐frequency traders were presented. These were carefully selected in a highly competitive open call for academic papers that focused on issues of current relevance to the SEC. We also recently hosted our first event with FINRA on September 17, 2014. The Conference on Market Fragmentation, Fragility and Fees brought together academics, regulators and practitioners to discuss the key issues related to equity market microstructure and ways to resolve market shortcomings. Jack Brennan, Chairman Emeritus and Senior Advisor at The Vanguard Group, gave the keynote at the reception and Richard Ketchum, CEO of FINRA, delivered the conference keynote. If you were not able to attend, please visit our website to review those speeches, papers and presentations. In addition, CFP Senior Fellow Professor David Kass organized a speech by his longtime friend, Dr. Martin Feldstein of Harvard University on what is ahead for the U.S. economy. And, Dr. Bill Longbrake continues to write the “Longbrake Letter,” an in-­‐depth coverage of current events in the economy and insightful commentary. CFP Senior Fellow Professor Cliff Rossi contributes frequently through his writing and media exposure on risk-­‐management and other topics. And, Steve Wallenstein continues to provide valuable guidance for the CFP, as well as thought leadership in many areas of interest for us. As you can see, there is much to talk about. As we expand our already significant presence into the private sector, we hope to add corporate and individual sponsorships of our Center in order to add the monetary resources needed to expand. It is a good cause, that of using the Academe to its fullest potential to serve the public and the financial practices of the private sector. I hope that you find our mission and achievements compelling, and that you bookmark and visit our web presence, www.rhsmith.umd.edu/centers-­‐excellence/cfp. Thank you for your support for our mission. To yours and our continued progress and success, Russ Wermers Director, Center for Financial Policy