Lars Christensen discusses a soon-to-be-released book by Charles Calomiris and Stephen Haber: “Fragile by Design: Banking Crises, Scarce Credit,and Political Bargains.”
Calomiris and Haber conclude that the root cause of banking crisis has to be found in what political institutions different countries have. Said in another way the main cause banking crisis is one of “political design”…….The differences between USA and Canada seem to be particularly interesting……..since 1840 the US have had 14 banking crisis, while Canada have had none and this despite the fact that credit has been as abundant in Canada as in the US.
Read more at “Fragile by design” – the political causes of banking crisis | The Market Monetarist.
When an ungrammatical review of a book that has not been read states that Cyprus has been a banking crisis country you wonder if the reviewer has been reading the current every day financial press.
The writer is Danish, so we should allow him some leeway. His point is that historically Cyprus, amongst many other countries, has not suffered from banking crises. I look forward to release of the book as it addresses the key issue underlying financial crises: political support for the financial sector.