Stay updated with breaking news from Martin Hellwig. Get real-time updates on events, politics, business, and more. Visit us for reliable news and exclusive interviews.
In a recent analysis, professors Anat Admati, Martin Hellwig, and Richard Portes present a scathing critique of the ...
It has long been understood that deposit guarantees and too-big-to-fail (TBTF) policies create a moral-hazard problem—they incentivize banks to take on too much risk by shielding depositors and shareholders from losses in excess of equity (“left-tail” outcomes)—in American banking.1 Congress passed the Federal Deposit Insurance Corporation Improvement Act (FDICIA) in 1991 to mitigate the moral-hazard problem by restricting forbearance and implicit subsidies for undercapitalized banks.
Seven books, and two films, for people curious about financial catastrophe | The Economist reads
Peter Bofinger questions last week’s award of a prestigious economics prize to an orthodox school which could not anticipate the 2008 crash.
We need to help banks stay out of trouble, not just help them during a crisis.