Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation

Contents

CONTENTS List of Figures and Tables vii Glossary of Abbreviations and Acronyms ix Introduction 1 1 Bonuses, Irrationality, and Too-Bigness: The Conventional Wisdom About the Financial Crisis and Its Theoretical Implications 5 2 Capital Adequacy Regulations and the Financial Crisis: Bankers' and Regulators' Errors 57 3 The Interaction of Regulations and the Great Recession: Fetishizing Market Prices 86 4 Capitalism and Regulation: Ignorance, Heterogeneity, and Systemic Risk 112 Conclusion 144 Appendix I. Scholarship About the Corporate-Compensation Hypothesis 157 Appendix II. The Basel Rules off the Balance Sheet 163 Notes 175 References 189 Index 201 Acknowledgments 211 This page intentionally left blank ...