Excessive Leverage and Risk in Banking

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.

Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig, Paul Pfleiderer
The Journal of Finance. February
2018, Vol. 73, Issue 1, Pages 145-198

Firms’ inability to commit to future funding choices has profound consequences for capital structure dynamics. With debt in place, shareholders pervasively resist leverage reductions no matter how much such reductions...

Anat R. Admati, Peter M. DeMarzo, Martin Hellwig, Paul Pfleiderer
October 22, 2013

We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly for society and would affect credit mark ets adversely. We find...

Anat R. Admati, Martin Hellwig
2013

What is wrong with today’s banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer...

Book cover for The Bankers' New Clothes
Anat R. Admati, Martin F. Hellwig
April 30, 2019
Anat R. Admati
Just Financial Markets? Finance in a Just Society. Oxford University Press,
2017, Pages Ch 13
Anat R. Admati
National Institute Economic Review. February
2016, Vol. 235, Issue 1, Pages R4-R14
Anat R. Admati, Martin F. Hellwig
August 2019
Anat R. Admati
Progress and Confusion: The State of Macroeconomic Policy. Cambridge : MIT Press,
2016, Pages 61-72
Anat R. Admati
Journal of Legal Studies .
2014, Vol. 43, Issue 3, Pages s35 - s61
Seeing through "the banker's new clothes": Anat Admati at TEDxStanford
Seeing Through the “Banker’s New Clothes”
Anat R. Admati on the continued failure by policymakers to protect the public and reduce the harm from a reckless financial system at TEDxStanford.