In the Alumni spotlight, we showcase our Cal Berkeley Alumni from near and far. We are thrilled to feature Troy Paredes, whose impressive career led to his appointment as a Commissioner of the U.S. Securities and Exchange Commission by President George W. Bush in 2008, and was followed by a thriving consulting career. Before becoming a Commissioner, he had been a professor of corporate and securities law. Troy and his wife, Laura Irons Paredes '97 (History) have been members of the Charter Hill Society for Economics since its inception.
Q: You were appointed a Commissioner of the U.S. Securities and Exchange Commission by President George W. Bush and continued to serve under President Obama. What are some insights you can share about this transition and work with multiple administrations?
A: I had the honor of serving during an especially historic period, throughout the financial crisis and its aftermath. I was there from August 2008 until August 2013. At the SEC, protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation is always front and center, although people can in good faith differ over how best to achieve this regulatory mission. I aspired to keep an open mind, whatever the administration and with whomever I worked. I knew I didn’t have the answers to everything and that I could learn a lot from my colleagues on the Commission and the agency’s dedicated staff. While I had taught securities regulation and written about it for years, I still benefited tremendously from others as I wrestled with how to vote on significant matters.
Q: How did UC Berkeley prepare you for your career?
A: Diversity of thought and perspective is so important. I’ve spent a good deal of time – both as an academic and in the private sector – considering the hallmarks of good decision making. It’s clear to me that you should hear from, and take seriously, different viewpoints, including those that challenge you. One of my favorite quotes is from Peter Drucker, who wrote, “The first rule in decision-making is that one does not make a decision unless there is disagreement.” At Cal, I got the benefit of encountering philosophies and analytic approaches that encouraged me to hone my own thinking.
Q: What is your vision for your current consulting practice, Paredes Strategies LLC, and for your podcast, “Appetite for Disruption”?
A: My consulting practice centers on helping businesses achieve durable success. That can be strategy, compliance, risk management, governance, or culture. For example, a company that doesn’t properly prioritize compliance puts its prospects at risk. I work to bring to bear my experience in the private sector, in government, and as a professor to see things from various vantage points, to consider the different interests that may be implicated, and to take a holistic look at whatever the circumstances are.
As for the podcast, it’s a ton of fun. We focus on all things fintech, including regtech. Lately, we’ve done a lot on blockchain and artificial intelligence, both of which, I think, present incredible potential. Each episode teaches me something. It’s encouraging to hear from entrepreneurs whose creativity and commitment can solve problems and create new opportunities for people.
Q: You and your wife, Laura, have been a part of the Charter Hill Society since its inception in 2016. What drew you to join?
A: I owe much to Berkeley generally and the Econ Department specifically. The blessings I’ve had are linked to my time at Cal and to what I learned as an economics major there. So when given the chance to support the school through the Charter Hill Society, how could I say no? It’s terrific having a small part in helping Econ remain world-class, where incredibly innovative research is done and where students learn from the best economists around.
Q: You are working a great deal in the cryptocurrency/blockchain and fintech space. How can regulators keep up with this fast paced and ever changing financial landscape?
A: When I was at the SEC, I always tried to start by understanding the underlying facts. That’s difficult enough when things are pretty stable, but still multidimensional and interdependent. Even when things seem relatively straightforward, you still need to anticipate how a regulatory change may affect a wide range of market participants, how different players may react to the change in period 1, how the period 1 reactions will spur other reactions in period 2, then try to figure out what will happen in period 3, and so in. In other words, how will the dust settle over time in reaching something akin to a general equilibrium? Now add a technology that is potentially revolutionary like blockchain to the mix. Wow.
What’s key is for the private sector, academia, and regulators to collaborate in ensuring that the right policies are set and implemented so that regulation doesn’t unduly stifle technology that offers a real promise of making our lives better. Along these lines, I commend the SEC for forming a Distributed Ledger Technology Working Group.
Q: Is there a Berkeley Economics student memory that really stands out for you?
A: I still remember trying to wrap my mind around an indifference curve. Struggling with that concept speaks to the value of studying economics. Namely, econ taught me a new way of thinking about things, such as optimizing given constraints, the benefits of competition, choices between equity and efficiency, the complexity of dynamic versus static analysis, and the like. I’ve relied on this learning over and over, probably everyday in some way. For example, I advocated for cost-benefit analysis and data-driven decision making as an SEC commissioner. I’m sure this perspective on regulation grew from my econ roots at Cal.
Troy and Laura Irons Paredes are members of the Charter Hill Society for Economics (CHSE), a community of donors supporting the faculty & students of Berkeley Economics via three-year commitments to the Annual Fund. To learn more joining CHSE, please contact Assistant Dean Christian Gordon.