Tag Search Results

Rise in US and UK inequality principally due to financialisation and executive pay

The people who ran big companies were always relatively well paid, but the meaning of “relatively well paid” is now altogether different. Finance employs more people, recruits more able people and pays them a lot more. These effects have not been seen in countries, such as France and Germany, that have proved more resistant to financialisation.

Why simple and robust regulation is the way to reduce financial complexity

Much of the complexity of modern finance is the result of regulatory arbitrage – avoiding or minimising restrictions by engaging in a transaction with more or less identical effect but more favourable regulatory treatment. Many regulators still cling to the hope that it could be eliminated if only rules were sufficiently extensive and sufficiently carefully prescribed. But this is an illusion.

How the health and safety culture can curb moral hazard

What does the death rate from violent accident in England over seven centuries tell us about moral hazard in the financial system?

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

Angry economics students are naive – and mostly right

Economics students are – yet again – expressing dissatisfaction with the content of their curriculum. They are right

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.