Prone to Fail: The Pre-Crisis Financial System

47 Pages Posted: 2 Oct 2018

See all articles by Darrell Duffie

Darrell Duffie

Stanford University - Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: July 19, 2018

Abstract

In the years leading up to the financial crisis that began in 2007, the core of the financial system was vulnerable to major shocks emanating from any of a variety of sources. While this particular crisis was triggered by over-levered home owners and a severe downturn in U.S. housing markets (Mian and Sufi, 2015), a reasonably well supervised financial system would have been much more resilient to this and other types of severe shocks.

Suggested Citation

Duffie, James Darrell, Prone to Fail: The Pre-Crisis Financial System (July 19, 2018). Stanford University Graduate School of Business Research Paper No. 3728. Available at SSRN: https://ssrn.com/abstract=3259345 or http://dx.doi.org/10.2139/ssrn.3259345

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