I’m at day 2 of the Economist’s Buttonwood Gathering, a conference on “fixing finance”. Lots of stuff to write about. Expect multiple pieces over the next few days. So far I’ve seen Soros, Summers, Geithner, Elizabeth Warren, Stephen Roach, and others.

There’s been very lively discussion in the panels. Earlier today there was a debate on whether financial innovation is good for economies. Jeremy Grantham and Richard Bookstaber represented the anti-FI argument, and Myron Scholes and Robert Reynolds presented the pro-FI case. Both sides made good points, but Grantham’s argument was most convincing, to me at least. An immediate poll showed that his side won handily, 75/25. More details on this soon.

My main critique so far is that there’s very little discussion about the Fed’s role in creating crises. Larry Summers predictably dodged all Central-bank related questions. Jeffrey Sachs had some excellent comments about Greenspan’s reckless monetary policy, and Goldman’s questionable use of the discount window. The topic popped up a few other times, but there seems to be an almost willful avoidance of it.

Niall Ferguson has the most interesting quote of the conference. It was in reply to a question from the audience about sustainable solutions to this crisis:

The problem of being a declining empire has no solution.

Thanks again to Seeking Alpha for the press pass.