Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-09
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Description
There is virtually universal agreement that the fundamental cause of the global economic and financial crisis of 2007-2009 was the combination of a credit boom and a housing bubble, but it is much less clear why this combination of events led to such a severe financial crisis. Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-2009 argues that what made this economic shock unique and led to such a severe financial crisis was the behavior of many of the large, complex financial institutions (LCFIs) that today dominate the financial industry. These LCFIs ignored their own business model of securitization and chose not to transfer credit risk to other investors. Instead, they employed securitization to manufacture and retain tail risk that was systemic in nature and inadequately capitalized. Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-2009 provides a brief history of how the U.S. financial system evolved into its current form. It presents the manner in which banks built tail (systemic) risk exposures in large measure to get around capital requirements, in contrast to their earlier business models, and it explains how lax regulation contributed to these outcomes. It also examines alternative explanations for the financial crisis. The authors conclude that global imbalances and loose monetary policy were relevant proximate contributors to the crisis by producing an asset-price bubble in the United States that ultimately led to the financial crisis. Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-2009 concludes with a discussion of possible remedies to charge banks for manufacturing tail risks and to contain such propensity in the first place. And while the focus is on the United States, the authors review risk-taking and realized losses by LCFIs in other parts of the world.
Product Details
Price
$65.00
Publisher
Now Publishers
Publish Date
March 25, 2010
Pages
92
Dimensions
6.14 X 9.21 X 0.19 inches | 0.31 pounds
Language
English
Type
Paperback
EAN/UPC
9781601983404
BISAC Categories:
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Become an affiliateAbout the Author
Matthew Richardson is Curator of Social History at Manx National Heritage. He has a long term interest in military history, in particular the First and Second World Wars. This is his eleventh book for Pen and Sword, and is the culmination of many years of study and research into the role of the Isle of Man between 1939 and 1945\. He is fortunate enough to have met and spoken with many of the contributors whose words appear in this book.
Thomas Cooley is Emeritus Professor of English at The Ohio State University. He is the author of articles and books on American literature, including The Ivory Leg in the Ebony Cabinet: Madness, Race, and Gender in Victorian America and Educated Lives: The Rise of Modern Autobiography in America. He is also the editor of Back to the Lake, The Norton Sampler, and other textbooks in rhetoric and composition.