Assembled writings on excessive indebtedness, or leverage, in the financial sector and capital regulation, or the regulation of the funding mix, of banks and other financial firms.
The pieces are aimed at multiple audiences and vary in length and presumed knowledge on the part of readers.
To make these pages useful, we first describe the main writings and relate them to one another, then provide a page with links to additional pieces grouped by topic.
Firms’ inability to commit to future funding choices has profound consequences for capital structure dynamics. With debt in place, shareholders…
We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly for society and would affect…
We take issue with claims that the funding mix of banks, which makes them fragile and crisis-prone, is efficient because it reflects special liquidity…
The financial system is meant to facilitate efficient allocation of resources, helping people and businesses fund, invest, save, and manage risks…
Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking and from the failure of markets…
The debate on banking regulation has been dominated by flawed and misleading claims. The title of our book The Bankers New Clothes: What’s Wrong with…
The failure of financial regulation can, and did, cause significant harm to the economy. I argue that confusion about the nature of the problems in…
Excessive leverage (indebtedness) in banking endangers the public and distorts the economy. Yet current and proposed regulations only tweak previous…
Stanford GSB Authors
Additional Author
Martin Hellwig
Director of the Max Planck Institute for Research on Collective Goods, Bonn