The Great Leveraging

Taylor, Alan

The Great Leveraging

Chapter 4 in The Social Value of the Financial Sector:Too Big to Fail or Just Too Big?, 2013, pp 33-65 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe following sections are included:The Great Leveraging: Five Facts and Five Lessons for PolicymakersFact 1. Crises: Almost Forgotten, Now They’re BackFact 2. Consequences: Crises are Depressing and DeflationaryFact 3. Extreme Leverage: Size of the Banking Sector Is UnprecedentedFact 4. Global Asymmetry: EMs Buy Insurance, DMs Sell ItFact 5. Savings Glut: Short-Run Panic versus Long-Run DemographySumming Up the Facts: What Is Happening?Lesson 1: Past Private Credit Growth Does Contain Valuable Predictive Information About Likelihood of a CrisisLesson 2: As Symptoms of Financial Crises, External Imbalances Are a Distraction, and so Are Public DebtsLesson 3: After a Credit Boom, Expect a More Painful “Normal Recession” as Well as a More Painful “Financial Crisis Recession”Lesson 4: In a Financial Crisis with Large Run-Up in Private Sector Credit, Mark Down Growth/Inflation MoreLesson 5: In a Financial Crisis with Large Public Debt, and Large Run-up in Private Sector Credit Mark Down your Forecast Even MoreSumming Up: What Next for Macroeconomics and Policy?References

Keywords: Depository Institutions; Banks; Too-Big-to-Fail; Financial Innovations (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: The great leveraging (2012)
Working Paper: The Great Leveraging (2012)
Working Paper: The Great Leveraging (2012)
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