Page 121 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Technology

Interview David Siegel

But some might say, “OK, we have these rules
and regulations in place in the financial world,
and yet we have problems.” We had the finan-
cial crisis, most people remember that.

Absolutely, these are very hard problems.
You’re not going to have a group of people sit-
ting down, spending an hour saying this is how
it should work, these are the rules, we’re done.
Even with speed limits on highways, you can
have bad accidents.

Safe to say, though, that the big players would
dominate this process and that some of the
smaller players would get hurt. How do we
make sure that doesn’t happen?

That was the problem with the predecessor to
Finra. You have to design this entity in such a
way that the interests of small and large firms “The lack of
are balanced. A lot of innovation occurs in transparency

32 smaller firms. I think the government should creates
▷ The co-chair of hedge fund reserve the right to take additional action if problems
Two Sigma Investments says they think the regulatory body isn’t doing a beyond the
oversight of Silicon Valley should good job. most obvious”
emulate Wall Street’s model� What?
If you think about these companies, there’s
not a lot of transparency about what they’re
Is it time for the Googles and the Facebooks doing with the information they’re gathering,
and the Twitters of the world to be regulated? how they’re using it.

Well, it’s certainly time for these incredibly And the lack of transparency creates prob-
successful companies to take on additional lems beyond the most obvious ones. Imagine
responsibilities for how they interact with if financial firms could disclose their finan-
our society. I think it may be time for firms to cial information any way that they wanted to.
create a set of ground rules to make society There’s a lack of trust and confidence.
more comfortable with what they’re doing.
With Europe getting out in front of the U.S.
So why look to the financial industry for in trying to define anticompetitive practices,
examples? especially trying to define privacy, how soon
does this kind of self-regulating body have to
Search and social media in a way are brokers come together in the U.S.?
in an information marketplace. If you think
about the regulatory structure of the finan- Well, I think now would be a really good time
cial marketplace, I see analogies to Finra, to start. These firms are now really important
the Financial Industry Regulatory Authority. and critical infrastructure to the global
It’s essentially an industry consortium that economy, and the process of trying to better
is sanctioned by the government to provide understand ways that they can operate that
investor protection and promote market integ- would truly promote trust and confidence
rity. When you have that kind of trust, then the is not easy. So let’s get going. <BW> PHOTOGRAPH BY 731
businesses thrive and make a lot of money. �Carol Massar and Jason Kelly