Show Me the Money
Episode Description
Richard Herring, Professor of Finance, The Wharton School
Brief Summary
The episode covers bank leverage, capital definitions, and Basel 3's impact on financial stability.
Key points
- Understanding Bank Leverage. Explains the critical nature of understanding bank leverage and its implications for financial stability.
- The Foundation of Banks. Discusses the importance of equity as the primary shock absorber for banks.
- Manipulated Numbers. Critiques the reliability of banks' reported capital ratios during the financial crisis.
- Regulatory Progress Post-Crisis. Reflects on the slow progress in regulatory reforms aimed at preventing future crises.
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Episode highlights
- Understanding Bank LeverageExplains the critical nature of understanding bank leverage and its implications for financial stability.“It's really critical, little complicated, but very worth understanding.”0:38May 8, 2013
- The Foundation of BanksDiscusses the importance of equity as the primary shock absorber for banks.“The equity is the foundation of the bank.”1:36May 8, 2013
- Manipulated NumbersCritiques the reliability of banks' reported capital ratios during the financial crisis.“Their numbers looked terrific because they were manipulated.”2:33May 8, 2013
- Regulatory Progress Post-CrisisReflects on the slow progress in regulatory reforms aimed at preventing future crises.“We haven't gotten very far, not nearly as far as we should be.”6:29May 8, 2013
Tension
45/ 100Some tension
