The Road to Reform
Finally people start talking seriously about credit market reform while losses around the world keep on growing every day. Here is the report by the Counterparty Risk Management Policy Group that the FT article (linked above) talks about, it’s called Containing Systemic Risk: The Road to Reform
Here is an illuminating exerpt
“The fact that financial excesses fundamentally grow out of human behaviour is a sobering reality, especially in an environment of intense competition between large integrated financial intermediaries which, on the upside of the cycle, fosters risk taking and on the downside, fosters risk aversion“
And here is another
“It is likely that flaws in the design and workings of the systems of incentives within the financial sector have inadvertently produced patterns of behavior and allocations of resources that are not always consistent with the basic goal of financial stability“
Enjoy, it’s only 170 pages, hours of fun!
