of prancing horses and bolted stable doors
DESCRIPTION
Of Prancing Horses and Bolted Stable Doors. “The Chaplain’s Interesting Questions 2008/9” No 1 Sidney Sussex College 17th October 2008. Mr. Massimo M Beber Fellow in Economics. Sidney Sussex College Cambridge CB2 3HU http://people.pwf.cam.ac.uk/mb65/. INTERNATIONAL ECONOMIC SECURITY - PowerPoint PPT PresentationTRANSCRIPT
Of Prancing Horsesand Bolted Stable Doors
“The Chaplain’s Interesting Questions 2008/9” No 1
Sidney Sussex College17th October 2008
Mr. Massimo M BeberFellow in Economics
Sidney Sussex CollegeCambridge CB2 3HU
http://people.pwf.cam.ac.uk/mb65/
INTERNATIONAL ECONOMIC SECURITY
Redland/ MBA - Cambridge INSTEP Programme 2010
http://people.pwf.cam.ac.uk/mb65/redland
The Pitt Building,: Tue 3rd May 2011
Lt. Gen. Mikhail Kalashnikov with vodka (20th September 2004)
EVOLUTIONARY LIBERALISM: FROM POWER TO PLENTY?
“Greed is good”
Prudential Ratios in Banking
Assets Liabilities
Liquidity Reserves Deposit Liabilities
Government Securities Non-Deposit Liabilities
Loans
Equity (Shareholders’ wealth.
“You stupid boy!”
Two Hypotheses on finance
• Efficient Markets– Finance “oils the wheels”
of the market– It speeds up income
convergence at lower cost in current consumption
– Rational expectations ensure stability
– Competition empowers rational expectations
• Financial Instability– Expectations
intrinsically volatile– Volatility creates
real economic damage
– This damage can be long-lasting (hysteresis)
– Prudential regulation must be strict
EUROPEAN FINANCIAL REGULATION: BETWEEN EMH AND FIH
Source: Committee of European Banking Supervisors Annual Report 2004.
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