Abstract

http://ssrn.com/abstract=1313406
 
 

References (8)



 
 

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The Mortgage Meltdown as Normal Accident Wrongdoing


Donald Palmer


University of California, Davis - Graduate School of Management

Michael W. Maher


University of California, Davis - Graduate School of Management

October 16, 2009


Abstract:     
We argue that the mortgage meltdown can be considered a “normal accident”. Our analysis suggests that the mortgage industry’s complex and tightly coupled technology made it vulnerable to failure, irrespective of the level of greed and fraudulent behavior exhibited by mortgage industry executives. Our normal accident analysis also suggests that insufficient regulatory oversight contributed to the debacle. But our analysis suggests that simply increasing the amount of regulation over the mortgage industry is unlikely to reduce its susceptibility to failure. Indeed, if inappropriately designed, increasing the amount of regulation could increase the likelihood of future failure.

Number of Pages in PDF File: 20

Keywords: mortgage meltdown, normal accidents, regulation of financial industry

JEL Classification: M14, A14

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Date posted: November 20, 2009  

Suggested Citation

Palmer, Donald and Maher, Michael W., The Mortgage Meltdown as Normal Accident Wrongdoing (October 16, 2009). Available at SSRN: http://ssrn.com/abstract=1313406 or http://dx.doi.org/10.2139/ssrn.1313406

Contact Information

Don Palmer (Contact Author)
University of California, Davis - Graduate School of Management ( email )
One Shields Avenue
Davis, CA 95616
United States
(530) 752-8566 (Phone)
Michael W. Maher
University of California, Davis - Graduate School of Management ( email )
One Shields Avenue
Davis, CA 95616
United States
530-752-7034 (Phone)
530-752-0723 (Fax)
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