Tag Archives: banking

[T]he Efficient Markets Hypothesis [is] in contention for one of the strongest hypotheses in the whole of the social sciences. Strictly speaking the EMH is false, but in spirit it is profoundly true. Besides, science concerns seeking the best hypothesis, … Continue reading

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On 10 September 2008, Lehman reported 11% “tier one” capital and very conservative “net leverage“. On 15 September 2008, Lehman declared bankruptcy. Despite reported shareholder’s equity of $28.4B just prior to the bankruptcy, the net worth of the holding company … Continue reading

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There was a time, not that long ago, when Americans were obsessed with Japan. [Y]ou couldn’t enter an airport bookstore without encountering rows of dust jackets featuring rising suns and samurai warriors. Members of Japanese keiretsu…typically owned substantial quantities of … Continue reading

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A traditional approach to the principal-agent problems of the financial meltdown might be: If we give depositors lots of information, they’ll move their deposits to the strongest bank and then banks will have the incentive to be strong, and then … Continue reading

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