Why so many crises happen when we know why they happen and how to prevent them
May 30, 2024
Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming frequency? This column argues that a key reason is failures in regulation, and proposes that the financial authorities instead adopt a fundamental concept from finance – diversification. By doing so, we can build a more resilient system that not only better absorbs shocks but is also more efficient and less susceptible to crises than the current frameworks.
Published on VoxEU.org
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Bloggs and appendices on artificial intelligence, financial crises, systemic risk, financial risk, models, regulations, financial policy, cryptocurrencies and related topics© All rights reserved, Jon Danielsson,