Fragile by Design: The Political Origins of Banking Crises and Scarce Credit

(Princeton University Press, 2014)

Book Forum
September 8, 2014 5:00 PM to 6:30 PM EDT

Hayek Auditorium

Featuring the author Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School; with comments by Andrew Olmem, Partner, Venable LLP; moderated by Mark Calabria, Director, Financial Regulation Studies, Cato Institute.

In the wake of the 2008 – 2009 financial crisis a pervasive view began to emerge of banking as an inherently unstable occupation that must be tightly regulated and monitored by government agencies. Charles Calomiris and co‐​author Stephen Haber overturn this notion by presenting an inconvenient truth: not all countries suffer systemic banking crises. Some countries have managed to create a system that provides abundant credit without the propensity for banks to fail. So what is their secret? The answer is equally simple: The well‐​being of a banking sector depends on the ability of political institutions to limit rent‐​seeking by populist groups. Join the Cato Institute for a lively discussion of the true causes of the financial crisis and whether in light of the evidence presented by the authors the antidote (Dodd‐​Frank) causes more problems than it solves.