What is wrong with today’s banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer banking system would require sacrificing lending and economic growth. The bankers’ new clothes examines this claim and the narratives used by bankers, politicians, and regulators to rationalize the lack of reform, exposing them as invalid.
The book argues that we can have a safer and healthier banking system without sacrificing any of the benefits of the system, and at essentially no cost to society. Banks are as fragile as they are not because they must be, but because they want to be–and they get away with it. Whereas this situation benefits bankers, it distorts the economy and exposes the public to unnecessary risks.
Weak regulation and ineffective enforcement allowed the buildup of risks that ushered in the financial crisis of 2007-2009. Much can be done to create a better system and prevent crises. Yet the lessons from the recent crisis have not been learned.
- Anat Admati, George G.C. Parker Professor of Finance and Economics at the Graduate School of Business, Stanford University. She serves on the FDIC Systemic Resolution Advisory Committee and has contributed to the Financial Times, Bloomberg News, and the New York Times.
- Martin Hellwig, Director, Max Planck Institute for Research on Collective Goods. He was the first chair of the Advisory Scientific Committee of the European Systemic Risk Board and the cowinner of the 2012 Max Planck Research Award for his work on financial regulation.
- Discussant - Nadia Calviño, Deputy Director General for Financial services policy, DG MARKT, European Commission
- Discussant - Thomas Leysen, Chairman of the Board of Directors, KBC Group
- Chair - André Sapir, Senior Fellow, Bruegel and Professor at ULB
- Venue: Bruegel, Rue de la Charité 33, 1210 Bruxelles
- Time: 15 May 2013, 12:45 - 14:30 (A light lunch will be served before the event starts at 13:00)
- Contact: matilda.sevon[at]bruegel.org