Thursday, August 31, 2017

My tweet comments on Stephen Cecchetti's and Kim Schoenholtz's "The financial crisis, ten years on", Vox August 2017

Does a crisis start when the bomb is armed, the fuse is lit, the explosion occurs, or when the explosion is noted?

In 2003 FT published a letter I wrote about the systemic risk of giving credit rating agencies so much power

In 2004 the fuse was lit when Basel II authorized banks to leverage 62.5 times with what was rated AAA

In August 2006 clearly the bomb had already exploded

Unfortunately it was not until July 2007 credit rating agencies woke up and in August that the fan started to spread out the shit.