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The Mighty Who ? Hu ! Texas Law School Prof to Head New SEC Office of Economic Analysis and Office of Risk Assessment

By Andis Kaulins

Hu Gadarn, the first king of the Britons, during whose time a series of great floods occurred (probably the formation of the English Channel) was "also known as Hu the Mighty ... was said to have brought the Welsh to Britain from Deffrobani (the Summer Country) ... he taught them to plough, and invented the medium of song to aid memory."

Hu's Oriental namesake, Henry Hu, Professor of Law at the University of Texas Law School, an expert in derivatives,

source of photograph: Bloomberg
has now been named the new "king" as it were to head a new SEC division in charge of risk assessment of financial products, with the goal of avoiding the kind of financial floods that have inundated the world economy in the past several years due in part to great failings by regulatory bodies.

The BLT (The Blog of Legal Times) as posted by Jenna Greene quotes the Mighty Hu:

"The derivatives revolution, the rise of hedge funds and institutional investors, technological change, and other factors have transformed both capital markets and corporate governance,? Hu said in the SEC release announcing the new division. ?I look forward to working with the Commission and to using an interdisciplinary approach that is informed by law and modern finance and economics, as well as developments in real world products and practices on Wall Street and Main Street."

Reuters (Reporting by Karey Wutkowski; editing by Tim Dobbyn) in SEC creating new division to police market risk (update 1) writes:

"The SEC is seeking increased authority over an array of financial products and sectors, such as the hedge fund industry, after the global financial crisis highlighted the mispricing of risk by investors and other market players."

According to Bloomberg ) in SEC Said to Pick Texas Professor Hu to Oversee Risk Analysis:

"Hu, who has researched how complex securities and credit derivates pose systemic risk, will lead SEC staff members who identify areas of potential abuse and analyze the costs and benefits of regulating them.... Hu will report to Chairman Mary Schapiro...."

( Joshua Gallu in Washington at jgallu@bloomberg.net; David Scheer in New York at dscheer@bloomberg.net; Jesse Westbrook in Washington at jwestbrook1@bloomberg.net. )

We remain skeptical that government regulatory agencies will be able to reign in the most serious risks, simply because human greed is boundless and those seeking to take advantage of that weakness are a vast multitude. But of course we must try to do the best we can, so that this is most certainly a step in the right direction. Nevertheless, big money is seldom ruled, rather, big money rules. That is the major problem faced in governing the world economy.

Hat tip to Martha Neil at ABA Journal and her article Law Prof to Head New SEC Division Regulating Risky Financial Products.

Full post as published by LawPundit on September 17, 2009 (boomark / email).