Alchemists of loss: how modern finance and government intervention crashed the financial system

In a clear and accessible way, ex investment banker and financial journalist Martin Hutchinson, and highly respected academic, Kevin Dowd show how modern finance combined with easy money to bring down the world financial system. At the heart of the book is modern finance as a US invention, the theories and practices which have generated six Nobel prizes and the changes they made in business models and risk management in Wall Street and other major financial centers. Failure by regulators to control this self-serving culture institutionalized excessive risk taking which in part, led to the blow up of the world economy. The book also argues that financial intermediaries played a key part in thecrisis, as risks increased over time and risk management techniques were flawed from top to bottom. The combination of the loss of client focus, flawed incentive structures and inadequate control systems destabilized the financial system and sowed the seeds of the current crisis. The book anatomizes the 2007-08 collapse, showing how a woefully flawed and accommodative monetary policy combined with all of the above flaws reinforced each other, causing a domino effect and resulting in a systemic breakdown. Botched policy response from governments and central banks bailouts and ineffective stimulus packages made a bad situation much worse. The authors examine solutions to all of these problems, starting with improved financial risk management theories and techniques, focusing on lessons that the practice of finance must learn from recent events, and set out an institutional structure consistent with good practice. Finally the authors present two alternative visions of the future - What we dont want: more regulation, more regulators, more intervention, Keynesian economics, activist monetary policy and more instability and what we do want: less regulation,a sound monetary standard, the repudiation of Keynesian policy, more competition and a stable financial system. Understanding the whole picture of what hashappened and why and a solid and viable solution is important for a range of readers from government to corporate leaders to individual investors.Kevin Dowd (London, UK) is a highly published and respected academic who currently holds the post of professor of financial risk management at Nottingham University Business School. He has written extensively on macro, monetary and financial economics, financial regulation and central banking (and their opposite, free banking), finance and financial risk management. He has been a radical critic of financial regulation, central banking and Keynesian economics for many years, and has also been very critical of the practices and thinking behind modern financial risk management in his widely-read columns in Financial Engineering News. He has long-standing affiliations with the Cato Institute (Washington DC) and the Institute of Economic Affairs (London). Martin Hutchinson (Virginia, USA), is a financial journalist with over 2 decades of experience in the financial markets. He is contributing editor to AGORAs Money Morning, and Money Map newsletters, and recently set up PermanenetWealthAdvisor.com, an investment newsletter focusing on high dividend funds. He is also a correspondent for breakingviews.com, providing groundbreaking financial market insights for over 15,000 subscribers and writes the weekly Bears Lair column for PrudentBear, a mutual fund. Previously, he was Business and Economics Editor at United Press International (UPI). Martin has a long and illustrious Wall street career, and provides regular commentary on markets issues for CNBC, Fox Business, BBC World and more, while his market commentary is regularly featured in a number of publications including the New York Times, The Daily Telegraph and a number of other global publications

• ISBN: 978-0-470-68915-8
• Editorial: John Wiley & Sons
• Encuadernacion: Cartoné
• Páginas: 432
• Fecha Publicación: 16/04/2010
• Nº Volúmenes: 1
• Idioma: Inglés