Robert Aliber discusses the reasons for bank failures and financial crises. He makes three main points. First, US macroeconomic stability would be increased if the US Congress established a government agency to provide capital to individual banks after a systemic crisis causes large loan losses....

Intro -- Contents -- EXECUTIVE SUMMARY -- I. INTRODUCTION -- II. A BRIEF OVERVIEW OF THEORY -- III. MEASURING FINANCIAL OPENNESS -- IV. PATTERNS OF FINANCIAL GLOBALIZATION -- V. MACROECONOMIC EVIDENCE ON EFFECTS OF FINANCIAL GLOBALIZATION -- VI. HOW DOES THE COMPOSITION OF CAPITAL FLOWS MATTER?...