PART 1 Video summary The video discusses the persistent dangers posed by banks, despite reforms following the financial crisis. It highlights the updated edition of the book “The Bankers’ New Clothes,” which adds new chapters addressing ongoing issues in banking. The discussion covers the failure of reforms to eliminate ‘too big to fail’ banks, the unresolved issues of cross-border coordination, and the political challenges in regulating banks. The video also touches on recent banking crises, such as Credit Suisse and Silicon Valley Bank, emphasizing the need for more effective oversight and regulation. 1. Introduction to the session 00:11 Welcoming scholars for the discussion Recalling last year’s session with the same panelists Mentioning the updated book on banking and crisis 2. The updated book and its new chapters 02:01 Discussing the book “The Bankers’ New Clothes” Introducing four new chapters added to the book Addressing the fragility of banks and bailouts 3. The problem with high leverage in banks 07:09 Explaining the risks of high borrowing by banks Critiquing the notion that equity is costly for banks Highlighting the biases in bankers’ choices of funding 4. Recent banking crises and their implications 14:03 Analyzing the Silicon Valley Bank crisis Discussing Credit Suisse’s management failures Emphasizing the importance of stricter equity requirements 5. The lack of progress since the 2008 financial crisis 21:06 Reflecting on the limited impact of bailouts Considering the resurgence of war and its links to the crisis Expressing skepticism about the future of banking reforms 6. Discussion on the political economy of banking 33:51 Debating the political influence of banks Questioning the effectiveness of current regulations Suggesting that a real crisis might prompt actual change Part 2 of the video discusses the dangers of insufficiently regulated banking systems and the potential for future financial crises. It highlights the importance of proper bank regulation to prevent systemic risks and the role of central banks in managing liquidity crises. The speakers reflect on past financial crises, the political aftermath, and the challenges in breaking the link between financial systems and state support. They also explore the trade-offs between banking regulation and economic growth, emphasizing the need for innovation beyond traditional banking activities. 7. The Great Depression vs. 2008 Financial Crisis 38:04 Comparison of policy mistakes Importance of state intervention in crises Consequences of political decisions on public confidence 8. Risks of Inadequate Regulation 40:21 Potential for future crises due to fragile systems The danger of states being overwhelmed by financial runs The need for substantial regulatory changes 9. Central Banks’ Role in Future Crises 44:01 Debate on central banks’ liquidity backstops The impact of central banks’ actions on risk-taking behaviors The balance between regulation and financial stability 10. Banking Regulation and Economic Growth 47:52 The relationship between regulation and growth The role of banks in financing innovation The need for a diverse financial ecosystem to support growth
PART 1
Video summary
The video discusses the persistent dangers posed by banks, despite reforms following the financial crisis. It highlights the updated edition of the book “The Bankers’ New Clothes,” which adds new chapters addressing ongoing issues in banking. The discussion covers the failure of reforms to eliminate ‘too big to fail’ banks, the unresolved issues of cross-border coordination, and the political challenges in regulating banks. The video also touches on recent banking crises, such as Credit Suisse and Silicon Valley Bank, emphasizing the need for more effective oversight and regulation.
1. Introduction to the session 00:11
Welcoming scholars for the discussion
Recalling last year’s session with the same panelists
Mentioning the updated book on banking and crisis
2. The updated book and its new chapters 02:01
Discussing the book “The Bankers’ New Clothes”
Introducing four new chapters added to the book
Addressing the fragility of banks and bailouts
3. The problem with high leverage in banks 07:09
Explaining the risks of high borrowing by banks
Critiquing the notion that equity is costly for banks
Highlighting the biases in bankers’ choices of funding
4. Recent banking crises and their implications 14:03
Analyzing the Silicon Valley Bank crisis
Discussing Credit Suisse’s management failures
Emphasizing the importance of stricter equity requirements
5. The lack of progress since the 2008 financial crisis 21:06
Reflecting on the limited impact of bailouts
Considering the resurgence of war and its links to the crisis
Expressing skepticism about the future of banking reforms
6. Discussion on the political economy of banking 33:51
Debating the political influence of banks
Questioning the effectiveness of current regulations
Suggesting that a real crisis might prompt actual change
Part 2 of the video discusses the dangers of insufficiently regulated banking systems and the potential for future financial crises. It highlights the importance of proper bank regulation to prevent systemic risks and the role of central banks in managing liquidity crises. The speakers reflect on past financial crises, the political aftermath, and the challenges in breaking the link between financial systems and state support. They also explore the trade-offs between banking regulation and economic growth, emphasizing the need for innovation beyond traditional banking activities.
7. The Great Depression vs. 2008 Financial Crisis 38:04
Comparison of policy mistakes
Importance of state intervention in crises
Consequences of political decisions on public confidence
8. Risks of Inadequate Regulation 40:21
Potential for future crises due to fragile systems
The danger of states being overwhelmed by financial runs
The need for substantial regulatory changes
9. Central Banks’ Role in Future Crises 44:01
Debate on central banks’ liquidity backstops
The impact of central banks’ actions on risk-taking behaviors
The balance between regulation and financial stability
10. Banking Regulation and Economic Growth 47:52
The relationship between regulation and growth
The role of banks in financing innovation
The need for a diverse financial ecosystem to support growth