In a conversation with Yale SOM’s Andrew Metrick, Paul Tucker, chair of the Systemic Risk Council and former deputy governor for financial stability at the Bank of England, says that financial markets are still facing serious stability risks.
Yale SOM’s Gary Gorton argues that financial crises happen because short-term lending, while essential to the economy, is also vulnerable to panic when parties lose confidence in each other. In a new paper, Gorton proposes a method of regulating short-term debt and preventing future crises.
Leverage-induced fire sales contributed to the worst stock market crashes in history. Prof. Kelly Shue studied account-level data from the Chinese market crash in 2015 to illuminate how much leverage matters.
Yale SOM’s Andrew Metrick and the Yale Program on Financial Stability are studying the global financial crisis of 2007-09, working to create the knowledge and tools to prepare the next generation of policymakers who find themselves in the eye of a monetary maelstrom.
Nobel Laureate Robert J. Shiller says that an event on the magnitude of the 2008-2009 financial crisis has to have many causes, but he sees “the spirit of the times” as a driving force behind many of them. In a lecture at Yale SOM, he described how he sees this spirit acting in everything from Fed policy to the growth in casinos.