[Also interesting 3rd tier financial regulatory gossip at the link, if you're interested in that sort of thing]
http://www.ft.com/cms/s/0/e2c10df6-619d-11de-9e03-00144feabdc0.html
June 25 2009 Financial Times
SEC gets tough on Wall St tribalism By Gillian Tett
In recent years, Henry Hu, a finance professor of Texas University, has often been a thorn in the side of the banking world. In his academic research, Hu has repeatedly highlighted the systemic risks created by credit derivatives and other complex instruments.
Most recently, he has expressed alarm about the so-called "empty creditor" problem -- or the fact that lenders, such as banks or hedge funds, are increasingly using credit derivatives to hedge in ways that create perverse incentives to tip companies into default.
Now, however, Hu is being given a chance to put his theoretical musings into practice. The Securities and Exchange Commission will soon announce that Hu is joining the agency, in a senior risk position. And that will give him practical input on many policy issues -- such as the emotive "empty creditor" matter.
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Full at: http://www.ft.com/cms/s/0/e2c10df6-619d-11de-9e03-00144feabdc0.html
Michael