Diversity across banks and other financial firms promotes a resilient financial system because differing risk profiles reduce the likelihood of systemic crises caused by shared economic shocks. Consolidation and uniformity among banks and other financial intermediaries do the opposite. ; Yet...

Hedge fund investors' tendency to focus on long-term performance strengthens hedge fund stability, according to this issue of the Economic Letter.

Hong Kong’s home mortgage market has remained among the world’s most stable. Supervisory authorities point to the 70 percent loan-to-value policy.

Reformers should review the loan-to-value guidelines for real estate lending, toughen them up where necessary and, most important, put the force of law behind them.