UF finance professor to serve as chief economist with SEC

Published: Tuesday, July 22, 2014 at 5:38 p.m.
Last Modified: Tuesday, July 22, 2014 at 5:38 p.m.

When Mark Flannery was interviewing for the job of chief economist at the Securities and Exchange Commission, one of the commissioners wanted to talk more about the other SEC.

That commissioner, however, was a Georgia Bulldog, and Flannery -- a finance professor at the University of Florida Warrington College of Business Administration since 1989 -- knew better than to go there.

Turned out to be a wise decision.

The Securities and Exchange Commission announced Tuesday that Flannery will be its chief economist and director of its Division of Economic and Risk analysis.

Flannery says he is looking forward to the challenge.

“I didn’t have to do it. I could stay here and enjoy the life of a Gator,” he said. “It will be a challenge to continue the good work of my predecessor and have an opportunity to provide economic analysis that affects policy in financial markets.”

Flannery said he was referred to the SEC by Craig Lewis, who stepped down in May to return to Vanderbilt University as professor of finance at the Owen Graduate School of Management. Deputy directors Scott Bauguess and Jennifer Marietta-Westberg have been acting as co-directors in the meantime, the SEC said.

“Professor Flannery is a widely respected economist with extensive experience in many areas relevant to the SEC’s mission, including the regulation of financial institutions, corporate finance, private funds, and credit ratings agencies,” SEC Chair Mary Jo White said in a statement.

Flannery will take an extended leave of absence from UF for the initial one-year appointment. “My dean has been very supportive of that,” he said.

Flannery’s appointment contributes to the business college standing among its peers. And it also helps Flannery’s own development as a professor in the same way a sabbatical would, giving him tons of new experiences to share in the classroom and with his colleagues.

As chief economist and director of DERA, which was created in 2009, Flannery will lead a team of 100 economics experts who provide analysis to help the commission with its rulemaking, examination and enforcement functions.

All rules being considered by the commission must go through a credible cost-benefit analysis to understand the economic implications of those new rules.

DERA analysts also must determine the best way to allocate resources among 400 examiners, who bear the responsibility of overseeing 10,000 investment advisers.

And DERA analysts must calculate the economic losses incurred by alleged activities such as insider trading to help litigators determine the appropriate punishment.

Flannery said he also will be an adviser to the SEC chair on matters that come before her as a member of the Financial Stability Oversight Council.

He said he looked forward to applying his theoretical and academic training to practical use, helping design the rules that serve as a watchdog function.

“The Chief Economist and DERA bring economic analysis to complement and supplement the legal analysis originating in other Divisions of the SEC,” Flannery said.

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