Publication
Nov 2008
This brief explains the basics of banking and addresses the question of whether financial markets are efficient. The author argues that the paradigm that financial markets are efficient is unworkable because the risks that matter for universal banks are tail risks, associated with bubbles and crashes. According to him, these cannot be quantified. He hence offers short- and long-term solutions, the latter being a return to narrow banking.
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English (PDF, 12 pages, 449 KB) |
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Author | Paul De Grauwe |
Series | CEPS Policy Briefs |
Issue | 178 |
Publisher | Centre for European Policy Studies (CEPS) |
Copyright | © 2008 Centre for European Policy Studies (CEPS) |