3Qs: Did Occupy Wall Street change Wall Street?

September 27, 2012, Northeastern University
Protesters may not have changed the financial sector, but they have influenced the political discourse, according to finance professor Jeffrey Born. Credit: istockphoto.com.

Occupy Wall Street marked its one-​​year anniver­sary on Sept. 17. Pro­tes­tors have packed up their tents and vacated sites such as New York's Zuc­cotti Park and Boston's Dewey Square, but we asked Jef­frey Born, a pro­fessor of finance in the D'Amore-McKim School of Busi­ness, to assess the movement's success.

What impact did Occupy Wall Street have on the financial sector?

I can't point to any spe­cific changes that are a direct result of the Occupy move­ment, but I think it's clear that the move­ment was very suc­cessful in influ­encing polit­ical dis­course in this country. Depending upon the results of elec­tions this fall, it is quite pos­sible that there will be more and new reg­u­la­tions on the finan­cial sector. In addi­tion, tax poli­cies are playing an impor­tant role in this elec­tion cycle, and it seems clear that there will be calls to change the tax code in their aftermath.

Did the movement accurately depict Wall Street or were the protests more rooted in perception than reality?

The OWS move­ment helped people under­stand the reality of income and wealth dis­tri­b­u­tion in this country, and how those dis­tri­b­u­tions have changed over the past 20-​​plus years. I think that this data helps to create a more informed elec­torate and I am very much in favor of that outcome.

Unfor­tu­nately, most people have little or no under­standing of cap­ital mar­kets—how they work, and how they con­tribute to our society and stan­dard of living. I think it's fair to say the goals of OWS did not include the improve­ment of our society's finan­cial lit­eracy, so I think that we will need finance pro­fes­sors for a while longer.

Is Wall Street—and, more broadly, the global financial sector—in a more secure position now than it was at the height of the recession? What more needs to be done in order to improve the stability of the economic sector?

Since the nadir in 2009, the pas­sage of time has given domestic finan­cial insti­tu­tions an oppor­tu­nity to restore prof­itability and sig­nif­i­cantly improve their finan­cial con­di­tion. Domestic real-​​estate prices are sta­bi­lizing and rebounding, reducing the stress on U.S. banks and other insti­tu­tions that hold mortgage-​​backed secu­ri­ties. Unfor­tu­nately, the finan­cial sit­u­a­tion in Europe is not showing a sim­ilar improve­ment. In short, the global finan­cial sector is still fragile but less dan­gerous than it was two or three years ago.

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