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- W2892091115 abstract "The global financial crisis is best understood as a widespread bank run on shadow banks. Precrisis vulnerabilities followed from the relaxation of Minsky’s four constraints on financial fragility, including an upward-sloping yield curve; runnable capital; low buffers for banks; and credit risks. Pro-cyclical conventional expectations among counterparties provided a pool of short-term capital for banks to fund risky investments while enabling runnable capital; banks’ ergodic risk measures for measuring regulatory capital boosted bank risk tolerance while lowering precautionary buffers; and credit ratings allowed risk-averse counterparties to purchase shadow banking liabilities while blinding investors to credit risks in asset-backed securities. Prior to the crisis, the United States’ financial system was overreliant on short-term capital and overexposed to credit risks with insufficient capital buffers. When the housing bubble burst, losses triggered a creditor panic in short-term funding markets that took off prior to the crisis." @default.
- W2892091115 created "2018-09-27" @default.
- W2892091115 creator A5060388373 @default.
- W2892091115 date "2018-01-01" @default.
- W2892091115 modified "2023-09-25" @default.
- W2892091115 title "The Rise of Fragile Finance" @default.
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- W2892091115 doi "https://doi.org/10.1007/978-3-319-91346-9_4" @default.
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