Rethinking the Principles of Bank Regulation: A Review of Admati and Hellwig's The Bankers' New Clothes

Roger Myerson

Journal of Economic Literature, 2014, vol. 52, issue 1, 197-210

Abstract: In an important new book, Anat Admati and Martin Hellwig raise broad critical questions about bank regulation. These questions are reviewed and discussed here, with a focus on how the problems of maintaining a stable financial system depend on fundamental problems of information and incentives in financial intermediation. It is argued that financial regulatory reforms can be reliably effective only when their basic principles are understood by informed citizens, and that Admati and Hellwig's book is a major contribution toward this goal, as it clearly lays out the essential case for requiring banks to have more equity.

JEL-codes: G01 G21 G28 G32 L51 M48 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/jel.52.1.197
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Citations: View citations in EconPapers (21)

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