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Saturday, January 19, 2013

Financial Collapse: A 10-Step Prevention Plan

Alan Blinder lists "10 financial commandments, all of which were brazenly violated in the years leading up to the crisis":

Financial Collapse: A 10-Step Recovery Plan, by Alan S. Blinder: ...let me try to encapsulate what we must remember about the financial crisis...:
1. Remember That People Forget ...
2. Do Not Rely on Self-Regulation ...
3. Honor Thy Shareholders ...
4. Elevate Risk Management ...
5. Use Less Leverage ...
6. Keep It Simple, Stupid ...
7. Standardize Derivatives and Trade Them on Exchanges ...
8. Keep Things on the Balance Sheet ...
9. Fix Perverse Compensation ...
10. Watch Out for Consumers ...
Mark Twain is said to have quipped that while history doesn’t repeat itself, it does rhyme. There will be financial crises in the future, and the next one won’t be a carbon copy of the last. Neither, however, will it be so different that these commandments won’t apply. ...

    Posted by on Saturday, January 19, 2013 at 02:07 PM in Economics, Financial System, Market Failure, Regulation | Permalink  Comments (25)

          


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