Darrell Duffie (Author of How Big Banks Fail and What to Do about It)
‘Too Good to Fail’: Big Ideas for a Big Bank with Values
Financial Markets and Portfolio Management. Darrel Duffie, Dean Witter Distinguished Professor of Finance at the Graduate School of Business, Stanford University, is one of the leading scholars in financial economics and has written numerous brilliant research articles and books on financial markets and institutions. How big banks fail and what to do about it is no exception as it neatly explains the key underlying mechanisms that can cause large financial institutions to fail. The main theme of the book is that short-term repo funding, prime brokerage, and OTC derivatives are prone to runs similar to classic bank runs on demand deposits. Therefore, these contracts entail significant systemic risk, as became obvious during the — financial crisis. As the title suggests, the book not only describes failure mechanisms, but concludes by proposing various revisions to regulation and Skip to main content.
Historians have recorded turning points for time immemorial. For the chroniclers of capitalism, the collapse of Lehman Brothers a decade ago this week stands as the major tipping point in modern financial history. The talk in the City will be of the days before Lehman and those after. It triggered the largest economic shock since the Great Depression and is known now as the Great Recession. UK real GDP fell sharply in and did not return to its pre-crisis level until Business investment experienced a sharp downturn in and took until to recover its peak.
People are distrustful of big banks, perhaps today more than ever before. Amalgamated Bank has a year history of building a bank to serve the needs of workers. The bank also worked with European institutions to pioneer remittance products that allowed immigrant garment workers in the U.
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More about this book
Dealer banks--that is, large banks that deal in securities and derivatives, such as J. Morgan and Goldman Sachs--are of a size and complexity that sharply distinguish them from typical commercial banks. When they fail, as we saw in the global financial crisis, they pose significant risks to our financial system and the world economy. How Big Banks Fail and What to Do about It examines how these banks collapse and how we can prevent the need to bail them out. In sharp, clinical detail, Darrell Duffie walks readers step-by-step through the mechanics of large-bank failures.