This week’s EconTalk is with Anat Admati talking about her book (written with Martin Hellwig), The Bankers’ New Clothes. It may be the best book on the crisis. It explains in very clear and simple terms how the excessive use of debt by banks created the fragility of the financial system, and how that debt was enabled by government policy. I don’t agree with all of her solutions but the clarity of the narrative is very refreshing.
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