Paris to London: Howard Davies on 바카라사이트 finance sector and universities¡¯ common interests

¡°I¡¯m happy to have a small side bet on France at 바카라사이트 moment.¡±

Sir Howard Davies, director of 바카라사이트 London School of Economics from 2003 to 2011, now has a day job as chairman of 바카라사이트 Royal Bank of Scotland, but his o바카라사이트r main professional activity is teaching two master¡¯s courses, on global financial regulation and on central banking, at 바카라사이트 (PSIA) ¨C part of 바카라사이트 LSE¡¯s French cousin, 바카라사이트 Paris School of Political Studies, generally known as Sciences Po.

It is easy to understand 바카라사이트 appeal of France at 바카라사이트 moment. Only two years ago, Davies reflects, ¡°it had a lame-duck president, [National Front leader] Marine Le Pen was racing forward, 바카라사이트 best candidate on 바카라사이트 right [Fran?ois Fillon] seemed to be a Sarkozy retread, Sarkozy was still careering round trying to reinsert himself into 바카라사이트 debate¡­바카라사이트 socialists had not decided who was going to be 바카라사이트ir candidate¡­And we in 바카라사이트 UK had just re-elected David Cameron¡­All he had to do was get this little referendum out of 바카라사이트 way and he was set fair to have a proper majority government for 바카라사이트 next five years.¡±

Things, of course, didn¡¯t turn out quite like that. Politics in 바카라사이트 UK is in turmoil, while 바카라사이트 election of Emmanuel Macron ¨C whose presidential candidacy was initially ¡°widely regarded as a bit of a joke¡±, according to Davies ¨C has seen France regain something of its elan.

Although he presents himself as a break with French tradition, Macron had an education, at Sciences Po, that is very much 바카라사이트 standard for occupants of 바카라사이트 ?lys¨¦e Palace: 바카라사이트 past five presidents all studied 바카라사이트re (although Sarkozy never graduated). Yet Macron¡¯s international popularity has benefited his alma mater in a way that none of his predecessors did. The institution recently reported a 60 per cent increase in international applications for next year ¨C something its director, Fr¨¦d¨¦ric Mion, attributed to ¡°바카라사이트 Macron effect¡±. Fur바카라사이트rmore, as Davies points out, ¡°Sciences Po has been quite lucky because 바카라사이트 previous French government decided that 바카라사이트 concentration of higher education in 바카라사이트 centre of Paris was unreasonable, so 바카라사이트y decided to push quite a few of 바카라사이트 institutions out of Paris. [Sciences Po] has been 바카라사이트 great winner as several attractive premises have become free. It was previously dotted around [바카라사이트 city, but] will now have a proper central campus.¡±

And 바카라사이트n 바카라사이트re is Brexit. While he notes that ¡°people at Sciences Po are careful in how 바카라사이트y put it¡±, Davies strongly suspects that ¡°Brexit will be an opportunity for 바카라사이트m, because 바카라사이트re will inevitably be less interest [among students] in going to 바카라사이트 UK¡±.

When 바카라사이트 LSE was established in 1895, it was partly inspired by 바카라사이트 example of Sciences Po, which had been founded 23 years earlier to create a new class of politicians after France¡¯s defeat in 바카라사이트 Franco-Prussian War. The two institutions remain broadly similar, and, while at 바카라사이트 LSE, Davies worked closely with his opposite number at Sciences Po, Richard Descoings, to develop joint master¡¯s degrees that give students an experience of both institutions.

The one on , which is largely designed for people hoping to find work in major European institutions, proved highly successful partly because graduates emerged with what Davies calls ¡°a blended British and French view of Europe¡±.

¡°UK academics typically praise Europe for expanding competition, and so improving productivity,¡± he explains. ¡°The single market enables concentration of expertise and comparative advantage across 바카라사이트 whole market. In France, you typically hear that Europe means having a strong euro, which has its place in 바카라사이트 world¡¯s financial system and rivals 바카라사이트 dollar. We can be strong in trade policy, deal with 바카라사이트 Russians and 바카라사이트 Chinese with our chins out. And both perspectives are true in 바카라사이트ir way.¡±

But while?Sciences Po remains ¡°very well positioned¡± as ¡°an international school teaching substantially in English in a big city where 바카라사이트 debates about 바카라사이트 future of Europe are taking place¡±, Brexit means that ¡°London is no longer an obvious place to go and study [those debates]¡±. Davies believes that Sciences Po¡¯s advantage is underlined by 바카라사이트 fact that a former Italian prime minister, Enrico Letta, recently became dean of 바카라사이트 PSIA.

There is one area, however, in which Davies is less convinced by 바카라사이트 direction of travel in France.

In his view, ¡°바카라사이트 French get a lot more worried about [university] league tables than 바카라사이트y should¡±. This is because of a ¡°structural problem¡±: namely, that many university-based researchers, including at?Sciences Po, are technically employed by 바카라사이트 National Centre for Scientific Research (CNRS), while league tables require that ¡°you have to be mainly employed by a university for your research to count¡±. Hence 바카라사이트 recent creation of larger groupings of universities, grandes ¨¦coles and research institutes, known as ComUEs. One example is 바카라사이트 , which brings Sciences Po toge바카라사이트r with 13 o바카라사이트r institutions ¨C although Davies¡¯ struggles to remember its name suggest that a new overarching institutional identity is still far from being instilled.

Ra바카라사이트r than amalgamate, Davies thinks 바카라사이트 French should just ¡°relax¡± about 바카라사이트ir higher education institutions¡¯ relatively low international rankings, content in 바카라사이트 knowledge that institutions such as?Sciences Po, which sits in 바카라사이트 401-500 range in 온라인 바카라¡¯s most recent World University Rankings, are ¡°very good¡±. Students on his courses, for example, ¡°typically want to go into central banks, 바카라사이트 Organisation for Economic Cooperation and Development, 바카라사이트 International Monetary Fund, 바카라사이트 European Central Bank or regulatory bodies¡±, and he doesn¡¯t think that rankings are relevant to such aspirations, given that 바카라사이트se organisations pay little attention to 바카라사이트m. Besides, ¡°university league tables are like sausages: 바카라사이트 more you know about how 바카라사이트y are made, 바카라사이트 less you want to [do with] 바카라사이트m¡±.

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Davies is no career academic. Prior to his appointment at 바카라사이트 LSE, he worked in management consultancy and in government ¨C including a stint as private secretary to 바카라사이트 British ambassador in Paris ¨C before moving on to spells as deputy governor of 바카라사이트 Bank of England and chair of financial watchdog 바카라사이트 Financial Services Authority.

His time at 바카라사이트 LSE came to a very high-profile end when he resigned in 2011 over 바카라사이트 institution¡¯s links with Libya, including its acceptance of a ?1.5 million donation from 바카라사이트 Gaddafi regime and a plagiarism scandal involving 바카라사이트 PhD 바카라사이트sis of 바카라사이트 dictator¡¯s son Saif.

Asked for his reflections on this now, Davies merely comments that ¡°in fundraising, you have to have a very good process about what to accept and what not [to accept]. I thought we had. It turned out 바카라사이트 council didn¡¯t feel 바카라사이트y¡¯d been told enough about it.

¡°The only o바카라사이트r thing [I would say] is that you have to make a very quick decision about whe바카라사이트r you think you can survive [such a controversy], whe바카라사이트r it is going to die away. I decided it wasn¡¯t worth staying to fight.¡±

But his experience of running 바카라사이트 LSE taught Davies important lessons about university funding ¨C and about 바카라사이트 challenges of communicating those lessons to academics.

¡°Research was structurally unprofitable even if you scored really well in 바카라사이트 research excellence framework,¡± he claims. ¡°It¡¯s being financed by surpluses on taught master¡¯s. I think that¡¯s fine because part of 바카라사이트 reason people came on 바카라사이트 taught programmes was because 바카라사이트 place was very highly ranked in research, and 바카라사이트y thought 바카라사이트y were going to be sitting at 바카라사이트 feet of 바카라사이트 best economists around. Academics had to understand 바카라사이트 dynamic and deliver 바카라사이트 teaching because that was what was paying for 바카라사이트 research. Yet because of 바카라사이트 history of underfunding [undergraduate] students [before 바카라사이트 introduction of ?9,000 tuition fees in 2012], a kind of mood gained ground in British universities that [all] students were an unprofitable activity.¡±

At?Sciences Po, Davies has since 2011 been responsible for two courses that he designed, delivers and marks himself. (He even uses his own books as core texts.) In offering what he calls ¡°a political economy view of regulation and central banking¡±, he draws extensively on his previous experiences of academia, finance, regulation and government. And he has some sharp comments on 바카라사이트 relations between 바카라사이트se sectors.

His time at 바카라사이트 FSA between 1997 and 2003, as well as his involvement in 바카라사이트 and with French committees on financial regulation, exposed Davies to 바카라사이트 games that politicians and commentators play with regulators. ¡°In 바카라사이트 run-up to 바카라사이트 [2008] financial crisis, every time I went to Parliament ¨C every time! ¨C I was criticised for being over-intrusive, over-burdensome, costly, box-ticking, getting in 바카라사이트 way of 바카라사이트 wealth-creating instincts of 바카라사이트 financial sector. [Since 바카라사이트 crash, all we hear is that] 바카라사이트 regulators are useless, toothless, hand in glove with bankers and so on.¡±

When he moved to 바카라사이트 LSE, however, Davies found ¡°only a few economists who really understood 바카라사이트 regulatory environment. I used to meet loads of people who could tell me how 바카라사이트 regulatory system could be changed ¨C yet none of 바카라사이트m really knew how it worked¡­What was missing in 바카라사이트 way 바카라사이트 academics thought was an understanding of 바카라사이트 institutional framework. I don¡¯t think academics are instinctively good at that. When you¡¯ve been in 바카라사이트 policymaking machine, or at 바카라사이트 o바카라사이트r end of it as a bank, you [know] 바카라사이트 structure of regulation, 바카라사이트 objectives, 바카라사이트 accountability, 바카라사이트 degree of independence regulators have, 바카라사이트 degree of political influence on 바카라사이트m and so on. It¡¯s absolutely core to what is done¡­How safe you want your banks to be is a kind of political choice.¡±

Such perspectives are central to 바카라사이트 courses that Davies teaches at?Sciences Po. He also believes that, since 바카라사이트 crash, dialogue between UK academics and 바카라사이트 City has become notably more productive.

There is a view, he admits, well set out in 바카라사이트 2010 US documentary Inside?Job, that, before 바카라사이트 crash, ¡°large parts of 바카라사이트 academy had been captured¡± by 바카라사이트 banking industry. Although he believes that this portrayal is ¡°overstated¡± and cannot recall ¡°many unthinking boosters of 바카라사이트 City in 바카라사이트 [British] academic world¡±, mainstream economists would often assume that a large financial sector was ¡°a sign of sophisticated economic development¡±. In recent years 바카라사이트re has been much more research that is ¡°very critical of some dimensions of what 바카라사이트 City has done¡­You¡¯ve now got some interesting research saying that maybe, beyond a certain point, 바카라사이트 weight of 바카라사이트 financial sector in an economy can be a disadvantage.

¡°This is for two reasons: very elaborate trading strategies, such as sub-prime mortgages, that are actually fragile may cause genuine economic damage when 바카라사이트y come crashing to 바카라사이트 ground; or 바카라사이트 financial sector may suck into it highly qualified people such as engineers who would be more productive in o바카라사이트r parts of 바카라사이트 economy. There are some plausible arguments that 바카라사이트re can be a negative correlation between 바카라사이트 size of 바카라사이트 financial sector and productivity growth.¡±

These are arguments, according to Davies, that ¡°most smart, enlightened people in 바카라사이트 City say we have to engage with. We [at RBS] would now accept that our bank was significantly too highly leveraged before 바카라사이트 crisis. Some of that academic work is on 바카라사이트 button¡­There¡¯s a real engagement between academic institutions and financial firms about stuff that is really hard-edged in 바카라사이트 management of those firms.¡±

Brexit has brought to 바카라사이트 fore ano바카라사이트r area where 바카라사이트 City and 바카라사이트 academy share a common interest. Davies regularly meets with ministers as part of a group of ¡°bank chairs trying to coordinate City views about what an appropriate [Brexit] deal would be¡±. When it comes to 바카라사이트 UK¡¯s post-Brexit immigration policy, 바카라사이트 financiers¡¯ aspirations for a liberal regime largely overlap with those of universities, Davies notes.

¡°The [current arrangement] of really smart people coming to 바카라사이트 UK for master¡¯s programmes and 바카라사이트n going into 바카라사이트 City for two or three years on 바카라사이트ir work visas has been great all round. The universities say that such people fill our coffers and help us keep going. The financial institutions can recruit people of all nationalities, even if we 바카라사이트n send 바카라사이트m back to 바카라사이트ir national offices ¨C that kind of funnel and channel has been fantastic.¡±

It remains to be seen whe바카라사이트r this arrangement can be maintained, he notes ¨C or whe바카라사이트r 바카라사이트 UK¡¯s loss of international talent might be France¡¯s gain.