The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It - New and Expanded Edition

A Wall Street Journal , Financial Times , and Bloomberg Businessweek Book of the Year Why our banking system is brokenand what we must do to fix it New bank failures have been a rude awakening for everyone who believed that the banking industry was reformed after the Global Financial Crisisand that wed never again have to choose between massive bailouts and financial havoc. The Bankers New Clothes uncovers just how little things have changedand why banks are still so dangerous. Writing in clear language that anyone can understand, Anat Admati and Martin Hellwig debunk the false and misleading claims of bankers, regulators, politicians, academics, and others who oppose effective reform, and they explain how the banking system can be made safer and healthier. Thoroughly updated for a world where bank failures have made a dramatic return, this acclaimed and important book now features a new preface and four new chapters that expose the shortcomings of current policies and reveal how the dominance of banking even presents dangers to the rule of law and democracy itself. Cover CONTENTS Preface to the 2024 Edition Preface Acknowledgments 1. The Emperors of Banking Have No Clothes Part I: Borrowing, Banking, and Risk 2. How Borrowing Magnifies Risk 3. The Dark Side of Borrowing 4. Is It Really “A Wonderful Life"? 5. Banking Dominos Part II: The Case for More Bank Equity 6. What Can Be Done? 7. Is Equity Expensive? 8. Paid to Gamble 9. Sweet Subsidies 10. Must Banks Borrow So Much? Part III: Moving Forward 11. If Not Now, When? 12. The Politics of Banking 13. Other People’s Money Part IV: Undermining Democracy and the Rule of Law 14. Too Fragile Still 15. Bailouts and Central Banks 16. Bailouts Forever 17. Above the Law? Notes References INDEX