IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom


Flashcode 2 url IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
https://en.irefeurope.org/649


Engineering the Financial Crisis Systemic Risk and the Failure of Regulation

In one of the first studies critically to examine the Basel Accords, Engineering the Financial Crisis reveals the crucial role that bank capital requirements and other government regulations played in the recent financial crisis. Jeffrey Friedman and Wladimir Kraus argue that by encouraging banks to invest in highly rated mortgage-backed bonds, the Basel Accords created an overconcentration of risk in the banking industry.

In addition, accounting regulations required banks to reduce lending if the temporary market value of these bonds declined, as they did in 2007 and 2008 during the panic over subprime mortgage defaults.

The book begins by assessing leading theories about the crisis—deregulation, bank compensation practices, excessive leverage, "too big to fail," and Fannie Mae and Freddie Mac—and, through careful evidentiary scrutiny, debunks much of the conventional wisdom about what went wrong. It then discusses the Basel Accords and how they contributed to systemic risk. Finally, it presents an analysis of social-science expertise and the fallibility of economists and regulators. Engagingly written, theoretically inventive, yet empirically grounded, Engineering the Financial Crisis is a timely examination of the unintended—and sometimes disastrous—effects of regulation on complex economies.

You can purchase the book here.

Share this article :

Related contents ...

The consequences of the Covid-19 lockdown: what does history teach us?
Sergio Beraldo,

The consequences of the Covid-19 lockdown: what does history teach us?

(Not) Making Good the COVID-19-Related Damages: A Law and Economics Lesson
Riccardo de Caria,

(Not) Making Good the COVID-19-Related Damages: A Law and Economics Lesson


Venture Capital in Germany: Nothing ventured, nothing gained
Fabian Kurz & Alexander Fink & Translated by Anna-Maria Kohnke ,

Venture Capital in Germany: Nothing ventured, nothing gained

New working paper: certified corona immunity as a resource
IREF,

New working paper: certified corona immunity as a resource



Any message or comments?

Show Form

 css js



CLOSE

Monthly newsletter
Receive our publications for free

By continuing browsing our website, you agree with our cookies policy