The financial crisis that began in 2007 in the United States swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. Bringing together three leading financial ecomists to provide an international perspective, Balancing the Banks draws critical lessons from the causes of the crisis and proposes important regulatory reforms, including sound guidelines for the ways in which distressed banks might be dealt with in the future. While some recent policy moves go in the right direction, others, the book argues, are t sufficient to prevent ather crisis. The authors show the necessity of an adaptive prudential regulatory system that can better address financial invation. Stressing the numerous and complex challenges faced by politicians, finance professionals, and regulators, and calling for reinforced international coordination (for example, in the treatment of distressed banks), the authors put forth a number of principles to deal with issues regarding the ecomic incentives of financial institutions, the impact of ecomic shocks, and the role of political constraints. Offering a global perspective, Balancing the Banks should be read by anyone concerned with solving the current crisis and preventing ather such calamity in the future.
Mathias Dewatripont is professor of economics at the Universite Libre de Bruxelles (ECARES and Solvay Brussels School of Economics and Management), annual visiting professor of economics at the Massachusetts Institute of Technology, and research director of the Center for Economic Policy and Research. Jean-Charles Rochet is professor of mathematics and economics at the University of Toulouse I. Jean Tirole, the winner of the 2014 Nobel Prize in Economics, is chairman of the Foundation Jean-Jacques Laffont at the Toulouse School of Economics, scientific director of Toulouse's Industrial Economics Institute, and annual visiting professor of economics at the Massachusetts Institute of Technology.
Winner of Nobel Prize in Economics 2014.
Jean Tirole, Jean-Charles Rochet, Mathias Dewatripont