The Sanford C. Bernstein & Co. Center for Leadership and Ethics hosted a research symposium, “Preventing the Next Financial Crisis: Lessons for a New Framework of Financial Market Stabilization,” on Thursday, December 11. The symposium brought together leading academics, industry experts and financial journalists to examine the origins of the financial crisis and discuss what actions policymakers might take to correct it and prevent it from happening again. The symposium was organized by Bruce Kogut, the Sanford C. Bernstein & Co. Professor of Leadership and Ethics and director of the Bernstein Center; Patrick Bolton, the Barbara and David Zalaznick Professor of Business; and Tano Santos, who was recently appointed as the Franklin Pitcher Johnson, Jr. Professor of Finance and Economics. Kogut opened the conference by providing an overview of the financial crisis as well as the responses by policymakers. Dean Glenn Hubbard followed Kogut, adding that policy actions aimed at easing the crisis will only be effective if they are designed to restore confidence, restore credit, bolster capital and enhance collateral. Christopher Mayer, senior vice dean and the Paul Milstein Professor of Real Estate, spoke as part of the panel, “The Credit Crisis: What Happened?” Mayer gave details of his plan, developed with Dean Hubbard, to lower mortgage rates. By Mayer’s calculation, lowering rates to 4.5 percent would bring more than 1.5 million people into the housing market and cause approximately 30 million people in the U.S. to refinance their mortgages, giving them an average monthly savings of $420. “That’s a new car in every driveway,” he said. Bengt Holmström, the Paul A. Samuelson Professor of Economics at the Massachusetts Institute of Technology; Suresh Sundaresan, the Chase Manhattan Bank Foundation Professor of Financial Institutions; and Santos spoke as part of the panel, “The Role of the Federal Reserve, Treasury and SEC.” Frederic Mishkin, the Alfred Lerner Professor of Banking and Financial Institutions, delivered the forum’s keynote address, “The Federal Reserve Liquidity Policy During the Subprime Meltdown.” He disputed the idea that monetary policy is ineffective in solving financial crises, saying, “I think it’s an absolute fallacy that monetary policy isn’t effective during a financial crisis. It’s just plain wrong.” Mishkin spoke of the need for such policy to be quick and targeted to the areas that need liquidity most. “You have to be aggressive early,” he said. “You don’t wait to see the whites of their eyes. You have to be preemptive and anticipatory.”