Articles on 2007/08 financial crisis

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In bank stress tests, what’s worse: runs or lemons (the other kind)? Lemons via

Runs versus lemons: why US bank stress tests succeeded while Europe’s failed

US regulators chose to reveal detailed information to the public about the state of the banks. They were able to be so transparent, without triggering a run, because of a strong fiscal backstop.
The collapse of Lehman Brothers was a pivotal moment in the most recent financial crisis. The next crash may feature another bank failure. Reuters

What will the next financial crisis look like – and are we ready?

The subprime crisis and the subsequent failure of Lehman Brothers came as such a shock – and the repercussions were so severe that when the time came to mount a response, policy makers were as surprised…
Trading floors like this one – at the old American Stock Exchange in the 1980s – are at the heart of capitalism and financial speculation. David Foster/Flickr via CC BY-ND

Financial speculation: the good, the bad and the parasitic

The word “speculation” carries a connotation of negativity. And it’s probably fair to say that pretty much every financial crisis since the tulip mania of the 1630s can be attributed to some sort of mass…
The world’s oldest bank, Banca Monte dei Paschi di in Siena, is now battling to survive, after failing the ECB’s stress tests. EPA/Carlo Ferraro

EBA stress test needs to use tougher metrics when assessing banks’ solvency

The results of the long-awaited European Banking Association (EBA) “stress tests” show that 25 banks were found wanting. Altogether, the banks were about €25 billion short of the capital required to be…

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