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Have Big Banks Gotten Safer?
Report

Have Big Banks Gotten Safer?

Natasha Sarin and Lawrence H. Summers
Brookings Institution, 2016
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Editorial Rating

9

Qualities

  • Analytical
  • Innovative

Recommendation

In response to the 2008 financial crisis, policy officials around the globe crafted a vast new regulatory architecture to decrease the risk of large financial institutions failing and thus prevent future systemic shocks to the economy. Economists Lawrence H. Summers and Natasha Sarin assess the outcome of these efforts. They argue that the safety of the world’s biggest financial organizations may not be as robust as government leaders believe. getAbstract recommends their rigorous and discerning report to policy makers and financial professionals.

Take-Aways

  • In the wake of the 2008 financial crisis, policy officials constructed a vast new regulatory apparatus to make the global banking sector safer.
  • Today, the risk of default of large institutions is higher than it was before the 2008 credit crisis.
  • A more accurate measurement of capital might account for some of the newly perceived risk.

About the Authors

Natasha Sarin is a PhD candidate at Harvard University, where Lawrence H. Summers is president emeritus and a professor of economics.

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