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Why banking crises happen in America but not in Canada

John contrasts Timothy Geithner’s firefighting approach to financial crises with the analysis of their political origins of Calomiris and Haber in Fragile by Design

To secure stability, treat finance and fast food alike

If I had a million pounds for every time I have heard a possible reform opposed because “it wouldn’t have prevented Northern Rock or Lehman Brothers going bust”, I might now have enough money to bail out a bank.

Fannie Mae is a needless and risky model for UK housing

Ambiguity is often attractive to politicians and costly to taxpayers.

Bungled bailout heralds shift in attitudes

The belief that the right response to the failures of Basel I and II is a more elaborate version of the same global regime is a triumph of hope over experience.

Take on Wall St titans if you want reform

Effective banking reform should aim at structures, not at intensified supervision. Resilient systems are simple ones.

Why economists stubbornly stick to their guns

Why do we so often find that events reinforce what we already believe? John explains how confirmation bias characterises reactions to the financial crisis.

The nightmare of taking on ‘too big to fail’

John reviews the interim report of the Independent Banking Commission. The direction of travel is right but the devil is in the detail

Turning back the clock to ‘Hovis banking’

The suggestion that we might partially turn back the clock has been described as a call for “Hovis banking”, referring to an advertisement that plays on nostalgia. The commercial succeeds because we believe the bread our grandparents ate, before innovations in technology and marketing, was nicer and more wholesome. Perhaps that is true in banking as in baking.

Don’t blame luck when your models misfire

We will succeed in managing financial risk better only when we come to recognise the limitations of formal modelling. Control of risk is almost entirely a matter of management competence, well-crafted incentives, robust structures and systems, and simplicity and transparency of design.

Middle England should spare a thought for Modigliani-Miller

The value of Modigliani-Miller – like any good model in physics or economics – lies as much in the questions it raises as in the truths it reveals.