Tag: financial reform

Learning to Think About Shadow Banking

In retrospect, it is easy to see why most observers didn’t see the crisis coming.  The crisis was a stress test of shadow banking, “money market funding of capital market lending”.  In most universities, including mine, monetary economics and financial economics are separate fields with their own specialized language and faculty, and the regulatory apparatus […]

Financial Reform, Part One: TBTF

The word has come down, “Never again!” On October 14, 2008, the US Treasury announced a plan to recapitalize the US banking system, to the tune of $250 billion, starting with the nine biggest banks who were forced to take the money, whether they wanted to or not.  The government got its (our) money back, […]