Banking Structure and Jobs Discussed at TEDxWallStreet Conference

An interesting correlation derived at the TEDxWallStreet conference in early 2012 was between banking structure and jobs. The independently organized TED event conference was organized in partnership with Carbon NYC, a membership organization comprised of influential people in business, politics, and technology, among others. To join Carbon NYC, prospective members must demonstrate a high level of professional accomplishment, among other criteria.

According to one event speaker, Scott A. Shay, Chairman of the Board of Directors at Signature Bank, we can create jobs by dramatically changing the structure of the banking industry.

To do that, however, he said that we need to do three things.

First, big banks should be broken up into smaller, independent entities that lend to small businesses. The number of top banks has dwindled from 128 in the 1980s to just four in recent years, and they have become inaccessible to small businesses, which create a majority of jobs in the economy. Breaking them down would foster competition among banks.

Second, the Glass Steagall Act should be reinstated. The Act, which was repealed in 1999, kept risk speculative. Its repeal, however, led to one of the worst financial crises in recent history.

Third, big organizations should be given a reason to worry about a big bank’s credit worthiness. Because the nation’s capital is largely vested in relatively fewer banks, they have become “too big to fail” and prone to bailouts. Large organizations, which are major investors in such banks, should be made accountable for their investment decisions, Shay told conference attendees.

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The Attraction of Elite Clubs

Inclusive clubs are out, elite clubs are in. Just ask New York City-based Carbon NYC.

The group describes itself as an invitation-only organization of international business leaders and caps its membership size. Membership is extended to people who have accomplished “outstanding professional achievement and demonstrate a passion for non-work related pursuits.” Carbon NYC’s pursuits are not restrictive and span arts, philanthropy, technology, sports, and leisure. Every year, the club also holds a large-scale fundraising event with its Annual Spring Charity Soirée for a local non-profit organization.

Because its member demographic of moneyed individuals at an average age of 37 is highly attractive for advertisers, Carbon NYC also offers individual members exclusive access to luxury products and services.

Private networking clubs such as Carbon NYC are not exceptions in the era of digital social networking. Instead, they are increasingly becoming common because they help create a real network as opposed to a virtual network. In addition, they provide members with access to new products and offers sponsored by luxury brands that might be absent in other clubs.

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“Crowd-Sourcing” Capitalism

How do you crowd-source capitalism?

Questions like this were the theme of discussions at TEDxWallStreet, a conference that was organized in partnership with Carbon NYC, a private club made up of prominent figures in business, politics, and the arts, among other fields. Carbon NYC members and conference attendees were exposed to a diverse collection of ideas at the New York Stock Exchange under the over-arching theme of “Redefining Success” on Wall Street.

Speaker Jeff Stewart, Global CEO of Lenddo, who came up with the crowd-sourcing question, said the finance industry’s original plan had been to better allocate real-world resources. To achieve this end, financial service firms relied on a real-world network that vouched for an individual or institution’s credit worthiness. In recent times, however, finance became a toll bridge to the economy. Using technology, his company has designed a system that dis-intermediates credit officers in a lending environment. According to Stewart, crowds were and are the best way to allocate capital and risk. “The future of financial services is crowd-sourcing but, then, so is the past,” he said.

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