Featuring the book’s co-author R. Christopher Whalen, Senior Managing Director and Head of Research, Kroll Bond Rating Agency; with comments by Paul Miller, Managing Director, FBR Capital Markets; moderated by Mark Calabria, Director, Financial Regulation Studies, Cato Institute.
From the very beginning of finance to the recent housing boom and
bust, financial panics have been characterized by hidden leverage
and bad debt. Losses embedded in the system have often been
disguised by fraud on the part of private and public actors. Our
panel will take a walk through financial history and describe a
theory of financial stability derived from that history, as
elaborated in Financial Stability: Fraud, Confidence, and the
Wealth of Nations. Elements of this theory suggest that the
rule of law, freedom, and transparency are critical ingredients for
financial stability. Our panel will also examine how free markets
can narrow credit spreads and stabilize equity markets, leading to
greater overall financial stability.