Lessons from Northern Rock: Banking and shadow banking
Willem Buiter 04 March 2008
The UK Treasury Committee recently released a report on the lessons from the plight of Northern Rock. In the first of a two-column series, Willem Buiter analyses the shortcomings of the report’s recommendations for reducing problems in the banking and ‘shadow banking’ sectors.
Two highly readable reports on the lessons learnt from the Northern Rock debacle have been published recently. The first is the Treasury Committee Report The Run on the Rock published on January 26.
securitization, liquidity, financial stability, Northern Rock, bank failure
Subprime 'crisis': observations on the emerging debate
Charles Wyplosz 16 August 2007
A basic principle of high uncertainty is to be careful. This principle also applies to analyses of the situation, even if decisiveness in the face of turmoil is at a premium. Better wait than make things worse. Here a few observations to sort through the emerging debate.
As financial anxiety keeps mounting worldwide, comments flourish and joyfully contradict each other. Central banks are bailing out dangerous gamblers, says one. They are skillfully preventing a 1929-style crash, says another one. Things are being gradually normalized, some assert. This is just the beginning of a vicious circle of unforeseen meltdown, just wait, warn others.
subprime crisis, mortgages, securitization