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Regulators will get the blame for the stupidity of crowds

Just as dammed water finds new channels of escape, crowdfunding seems to provide a way around the blockage.

Is it better to play it safe or to place bets that risk bankruptcy?

Although transactions with low probability of large loss and high probability of small gain carry the potential for disaster, they can appear attractive for a very long time – perhaps for ever.

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.

The Nobel committee is muddled on the nature of economics

Financial economics, for half a century a showpiece in economic departments, is today struggling to maintain credibility in the face of the financial instability of the past two decades.

Spotting a banking crisis is not like predicting the weather

The further one moves from mechanisms that are well understood and events that are frequently repeated, the less appropriate is the use of probabilistic language.

The world must learn to deal with the reality of failure

Having invented the concept of GSifi to describe too-big-to-fail banks, the world’s financial regulators are on the hunt for other businesses which can be treated in a similar way.

The mystery of QE

John considers the evidence for quantitive easing as an effective driver of growth, in this short video for the FT.

Quantitative easing and the curious case of the leaky bucket

In the modern financial economy, the main effect of QE is to boost asset prices, as market gyrations of recent weeks have clearly illustrated. But is the pursuit of higher asset prices an effective or desirable means of promoting economic growth?

Britain is leading the world on banking reform

Globally, the Bank of England has been the main source of fresh and sceptical thinking on the future of the financial sector. While this has won it few friends in the City of London, such unpopularity is a mark of success not failure.

Prosecutors must uphold the law, not cut deals with the accused

The financial crisis left a few individuals responsible for it very rich while its consequences made millions not responsible for it much poorer. If this involves no crime, then we have failed to define or prosecute crime appropriately.