Financial Crises

    Credit-financed markets are inherently unstable. Inevitably, the pattern of payment promises doesn't align with actual ability to pay. What happens then depends on institutions, regulations and management. Today, the credit system is global, and so also is the prospect of financial instability.

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    Rewarding Bad Behavior: The Bear Stearns Bailout

    Ten years ago when Bear Stearns crashed, the Fed decided to bail out first, ask questions later. It was a mistake that set a bad precedent. Read more