Evaluating Policies to Prevent another Crisis: An Economist's View
No 20100, NBER Working Papers from National Bureau of Economic Research, Inc
I consider four policies created to address the financial crisis: (1) the ability-to-repay requirement in mortgage underwriting; (2) reform of rating agency compensation, (3) risk retention in securitization, and (4) mandatory loan renegotiation. I show that according to standard models, policies (1)-(3) do not address the standard asymmetric information problems that afflict financial markets. Policy (4) could reduce the deadweight losses associated with asymmetric information but requires that policy makers allocate gains and losses.
JEL-codes: D61 D82 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Published as in Cato Papers on Public Policy
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20100
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().