The current crisis has taught us some valuable lessons. At its core, the crisis illustrates the need to disregard age-old principles. Unfortunately, creditors’ dogged adherence to some longstanding doctrines has led to misconceived policies, inflicting unnecessary pain on some without putting an end to the crisis. For some, the question of whether recovery will come soon enough is still up in the air.
After the Stress Test: Lending in Times of Uncertainty
European banks have just made it through the latest round of stress tests. But now what? Will lending make a come back? Looking toward the future, do these tests really guarantee a clean bill of health? These are just a few of the questions that many people are asking themselves. But really, one question sums […]
Securitization Makes a Come Back: Haven’t We Learned from the Crisis?
Even after having been identified as one of the culprits of the 2007-2008 financial crisis, securitization is making a come back, with support of some central bank officials. Why? Securitization refers to the pooling and repackaging of assets in securities with claims on the cash flows generated by the asset. The final product of such […]
Financial Crisis: Can “It” Happen Again?
“Can ‘It’ Happen Again?” Such was the title of a well-known paper written by economist Hyman Minsky in 1982. “It” referred to financial crises. His answer at the time was in the affirmative. And so it remains today. The crisis that started in August 2007 has affected economies in different ways and in different degrees. […]
The Volcker Rule
Finally the Volker rule is in place. The five U.S. financial regulatory agencies – yes five: the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Commodity Futures Trading Commission – agreed on the rule to […]
