When she announced her retirement in December 2012, BMO Chief Economist, Sherry Cooper, closed a chapter on a career that has taken her to the Federal Reserve Board in Washington and later to Canada as Co-head of global fixed income at Burns Fry. As she shifts her focus to board work, speaking engagements, and writing, we sat down with Cooper to get her views on globalization, education, and the world she sees emerging in the next 30 years.

With your distinguished career, can you share some of the key lessons you’ve learned when it comes to professional education requirements and global opportunities?

I am a big proponent of continuing education, particularly for establishing a sound foundation through post-graduate studies, including MBA, Master of Finance, and Ph.D. The CFA program mandates continuing education. Education is a never-ending process, with technology and global conditions changing very quickly around us. We need to be adaptive.

There are rapid changes happening, as well as tremendous unexpected volatility in markets. We also have a good deal of risk in the system, with global economic and financial volatility a constant. All these will affect our careers, investments, and our personal lives. It is therefore important that we develop Plans A, B, and C for our careers. It may be realistic to establish interest in more than one area, to have more than one career path, and to embrace the opportunities that come with the change.

Has the 2008 financial crisis changed the landscape for new professionals entering the investment and finance industry?

The 2008 global financial crisis will impact the financial services industry for years to come. A more restrictive regulatory environment will considerably reduce the profitability of the industry. Before the financial crisis, the financial sector represented almost 20 percent of the U.S. economy. No more. Today, banks and other financial institutions have shrunk in number, and those that remain have slashed their payrolls and continue to do so. Comparing today’s environment to the industry before the crisis, return on equity has fallen and will likely fall further in the future.

The financial industry will continue to contract as a result of increasing regulatory requirements for higher capital and lower financial leverage. There will be fewer risk-taking activities, and the industry will continue to look for cost-cutting opportunities, probably through downsizing and cuts in employee compensation. This is a global phenomenon. Canadian financial institutions were in much better shape than those in other developed markets, building on the strength of our financial regulatory system. As well, over the past two years, the Office of the Superintendent of Financial Institutions Canada (OSFI) has implemented new rules on home equity lines of credit and has tightened underwriting requirements to rein in home lending. The government has done the same through more restrictive Canada Mortgage and Housing Corporation (CMHC) insurance practices.

CFA charterholders will continue to find opportunities at large financial institutions; however, they should also look at a broader career landscape, since all businesses require financial expertise. They will find opportunities in the finance or investment functions of the industrial sector, manufacturing or technology industries, and in healthcare.

You mentioned that you are interested in board opportunities. How do you think corporate governance should change to prevent another financial crisis?

More broad-based skill sets are needed than are currently required for corporate board membership. In the past, board membership was made up of CEO s and legal and accounting professionals. In the future, boards will expand their membership to include experts in finance, economics, technology, and risk management. Business strategy in a global perspective will be key, and compliance functions will receive far more attention. Emerging areas of concern will also be added for discussion at the board level, for instance, environmental concerns or government policy issues.

There is also a need for greater diversity on corporate boards. With more women entering the workforce worldwide, gender diversity is more urgent than before. Also, as businesses become more global, we need board representation by foreigners.

You bring up the topic of globalization. What complexities do you see emerging for businesses that operate in multiple countries?

Every business needs to set up a compliance department function. Compliance lawyers and accountants will be a growing field. Boards will be held much more accountable, and they will take public accountabilities far more seriously than before. One example of the trend is the growing power and resources devoted to the risk committees at all corporations.

In this electronic age, how will corporate issuers keep up with the increasing demand for investor communications and the increasing complexity of regulatory requirements?

In the context of the Sarbanes-Oxley Act requirements, it will mean specialized talent in investor relations departments. CFA members can consider broadening their work into this field. To a certain extent, this results in resources allocation without generating revenue in the short term, but it is required under the Act. In the long term, this initiative will increase company revenue by eliminating loss from unexpected large claims.

Can you provide us with some thoughts on how the eurozone can become a sustainable structure? What conditions need to be put in place to maintain the euro in the future?

Unified monetary authority is not enough, as we have seen. A unified fiscal authority is also needed, creating the United States of Europe, but this will inevitably be a very gradual process. It is enormously difficult politically, as no country wants to lose its sovereignty. A common currency structure is generally effective only among countries whose economies are similar, for instance, among Germany, Netherlands, and France versus the Greek economy.

“In the future, the U.S. will no longer have financial hegemony, but it is likely that the dollar will still play a central role.”

However, central fiscal decision making may result in a loss of sovereignty or a diminished role for sovereigns. A complete unification will take a long time, and it is very likely that Germany, the biggest member state, knows this. The associated costs may be enormous. Look, for example, at the German unification experience. The current unemployment rate in eastern Germany is much higher than in western Germany as trained labor moved from east to west where the living standards and job opportunities were greater. Even after all these years, German unification is not complete from an economic perspective.

For the euro currency union, there are a number of reasons culturally and historically for those countries to maintain the currency union structure. Greece has indicated its willingness to stay in the currency union. However, a lot depends on the support and commitment of Germany. In the near term, however, a Greek exit is not likely, and the eurozone financial crisis has moved off the boiling point. The European Central Bank (ECB) has taken meaningful actions to reduce risk and assure that Spain and Italy are now able to raise capital at more reasonable interest rates. Ireland’s financial position has improved as well. Greece will default on its debt, but Greece alone is small and containable. The key issue is improved banking regulation and oversight, which Mark Carney will continue to lead as the Chair of the board at the Financial Stability Board

Will there be a new world order 30 years from now? Will major reserve currencies in the U.S., Europe, and Japan give way to the currencies of rapidly growing economies such as the Chinese renminbi and Indian rupee?

I do not think that this will be fully attainable in 30 years. China has exploded in development. However, if we measure the wealth of nations in per capita income, the United States will remain the wealthiest country, even 30 years from now. The U.S. overtook the U.K. in per capita income well before the Second World War. Yet it was only after World War II that the U.S. dollar became the global reserve currency. In the future, the U.S. will no longer have financial hegemony, but it is likely that the dollar will still play a central role. There will continue to be diversification in the portfolio holdings of central banks to other currencies, including the Swiss franc, the Japanese yen, the euro, and the Canadian dollar.

The Chinese renminbi will be significantly stronger in 30 years than it is today. But to attain the status of a major reserve currency, the country must have a freely trading and floating currency. It must have an independent central bank, a market-oriented functioning financial system, an effective judicial system, generally accepted accounting practices, and a social safety net to further stability.

How do you see the U.S. economy evolving in the next 30 years? Does the future of the U.S. hinge on energy independence?

First of all, energy independence can be achieved, not just through increased domestic production, but also through a reduction in demand and more efficient use of energy and technology. Complete statistics are not yet available in order to foresee whether the U.S. can attain total independence in 30 years. The cost of natural gas is much lower in the U.S. than in other countries. Natural gas is increasingly used to produce electricity. Since energy is an important cost in the production process, we will continue to see manufacturing relocating to the U.S., and foreign manufacturers will continue to be attracted. This will enhance growth and prosperity in many sectors in the U.S. I expect that the U.S. economy will continue to enjoy a renaissance that has already begun. That renaissance has been overlooked so far by the public, the politicians, and the media, but the stock market may well be a harbinger of much better things to come. I do believe the U.S. will set its fiscal house in order in the President’s second term. Over the next 30 years, the U.S. economy will grow at a stronger pace than any other developed country, roughly three percent annually. Although this is not as strong as when the baby boomers were entering the labor force, the U.S. will benefit from increased immigration and a continued boom in innovation.