The past few years have shown that risks in the banking sector can impose significant costs on the economy. Higher capital requirements have been proposed as a way of making the banking sector safer. Many claim, however, that higher levels of bank capital would require sacrificing lending and economic growth. Anat Admati examines this claim and the narratives used by banks, politicians, and regulators to rationalize the lack of reform, exposing them as invalid. Admati calls for ambitious reform and outlines specific steps that can be taken immediately.
ABOUT THE SPEAKER
Anat Admati is the George G. C. Parker Professor of Finance and Economics at Stanford’s Graduate School of Business. She serves on the FDIC Systemic Resolution Advisory Committee and has contributed to the Financial Times, Bloomberg News, and the New York Times. She has coauthored, with Martin Hellwig: The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It.