Abstract

http://ssrn.com/abstract=1547201
 
 

Citations (7)



 
 

Footnotes (51)



 


 



Historical Perspectives on the Financial Crisis: Ivar Kreuger, the Credit-Rating Agencies, and Two Theories About the Function, and Dysfunction, of Markets


Frank Partnoy


University of San Diego School of Law

,

Yale Journal on Regulation, Vol. 26, 2009
San Diego Legal Studies Paper No. 10-009

Abstract:     
This Essay discusses two historical parallels between the current financial crisis and the financial crisis of the late 1920s and 1930s. First, financial innovation was at the core of both crises. In particular, the machinations of Ivar Kreuger illuminate how financial innovation tends to outstrip the ability, and perhaps the willingness, of investors and intermediaries to process information. Second, reliance on credit ratings began as a response to the 1929 crash and became a primary cause of the recent crisis. During the 1930s, regulators developed rules based on credit ratings; those rules are the ancestors of today’s widespread regulatory reliance on ratings. Without financial innovation and overreliance on credit ratings, the recent crisis likely would not have occurred, and certainly would not have been as deep.

Number of Pages in PDF File: 14

Keywords: crisis, derivatives, history, kreuger, credit ratings, securities regulation, special purpose entities, CDO, collateralized debt obligation

JEL Classification: G18, G28, G38, K20, K22, K23, L10, L40

Accepted Paper Series


Download This Paper

Date posted: February 3, 2010  

Suggested Citation

Partnoy, Frank, Historical Perspectives on the Financial Crisis: Ivar Kreuger, the Credit-Rating Agencies, and Two Theories About the Function, and Dysfunction, of Markets (,). Yale Journal on Regulation, Vol. 26, 2009; San Diego Legal Studies Paper No. 10-009. Available at SSRN: http://ssrn.com/abstract=1547201

Contact Information

Frank Partnoy (Contact Author)
University of San Diego School of Law ( email )
5998 Alcala Park
San Diego, CA 92110-2492
United States
619-260-2352 (Phone)
619-260-4180 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 3,260
Downloads: 937
Download Rank: 11,794
Citations:  7
Footnotes:  51

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.281 seconds