The causes of the financial crisis of 2007-09 are many and varied. Indeed, the crisis may be viewed as the product of a perfect storm. This paper identifies the major culprits or sinners of the U.S. crisis and enumerates their more important sins. The culprits include central bankers, commercial...

The history of regulation in America is as old as the republic itself. Since colonial times, Americans have struggled with the conflict between the desire for individual freedom and economic growth, and the need for rules and structure in a civil society. The evolution of the United States from...

The financial sector incurred big losses during the recent financial collapse and recession. The losses occurred despite regulatory requirements imposed upon the financial services industry meant to ensure confidence and stability. This study analyzes the profitability and stock returns of...

Ever since severe turmoil enveloped the financial markets in the fall of 2008, commentators have blamed deregulation of the financial system, and specifically the supposed "repeal" of the Glass-Steagall Act by the Gramm-Leach-Bliley Act of 1999,2 for the crisis. This has led many to advocate a...

A dozen years ago, Randall Kroszner, soon to be one of George W. Bush’s economic advisors and a Governor of the Federal Reserve, could comment in a Levy Institute seminar, without fear of contradiction, that there was no evidence to back the "public interest rationale" for the separation of...

This paper draws on the progress that has occurred in other areas of regulation -- specifically, the "cap-and-trade" program to control SO2 emissions; spectrum auctions; and "dedicated-access-privilege" programs for fisheries - to suggest that financial regulation would benefit from an expanded...

On November 12, 1999, President Clinton signed the most significant piece of financial services regulation to be enacted since the Great Depression, at least up to that time. When the Financial Service Modernization Act of 1999, better known as the Gramm-Leach-Bliley Act (GLBA), was signed, the...

We examine the impact of the current financial crisis on long-term U.S. Treasury yields by testing the impact of a series of events from December 2007 to March 2009 on the spread between 10-year United States Dollar (USD) London Interbank Offered Rate (LIBOR) swap and 10-year U.S. Treasury...

This paper discusses the SEC's regulation of the bond rating industry. Until a few years ago this specific branch of SEC regulation was largely unknown outside the agency and the bond rating industry itself, even among knowledgeable Washington insiders. But the SEC has actually regulated the...

This paper develops a simple macroeconomic model of systemic risk in the form of financial accelerator effects: adverse developments in financial markets and in the real economy mutually reinforce each other and lead to a feedback cycle of falling asset prices, deteriorating balance sheets and...