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Faculty & Research Excessive Leverage and Risk in Banking Fallacies and Academic Myths

Fallacies and Academic Myths

“Greenspan’s reasoning on ‘excessive’ equity is misleading,” a letter signed by 20 academics, Financial Times, August 2, 2011

“Chameleons: The Misuse of Theoretical Models in Finance and Economics,” Paul Pfleiderer, March 2014 (slide presentation)

“Does Dept Discipline Bankers?: An Academic Myth about Bank Indebtedness,”  Anat Admati and Martin Hellwig, February 10, 2013

“On the Relevancy of Modigliani and Miller to Banking: A Parable and Some Observations,”  Paul Pfleiderer,

A discussion of “Higher Capital Requirements, Safer Banks? Macroprudential Regulation in a Competitive Financial System by Milton Harris, Christian Opp and Marcus Opp,” Anat Admati, April 3, 2014

Additional Commentary

Why More Equity in Banking is Desirable
An Easy Path towards Safer and Healthier Banking
The "Too Big to Fail" Problem
Corporate Governance: Decision-makers vs. Stakeholders
The 2007-2009 crisis
Capital Regulation
Why "Level Playing Field" Arguments are invalid
"Loss Absorbing" Alternatives to Equity
Fallacies and Academic Myths
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