Frank Partnoy

The Rise and Fall of Ivar Kreuger

Are you already subscribed?
Login to check whether this content is already included on your personal or institutional subscription.

Abstract

This essay discusses two historical parallels between the current financial crisis and the financial crisis of the late 1920s and 1930s. First, financial innovation was at the core of both crises. In particular, the machinations of Ivar Kreuger illuminate how financial innovation tends to outstrip the ability, and perhaps the willingness, of investors and intermediaries to process information. Second, reliance on credit ratings began as a response to the 1929 crash and became a primary cause of the recent crisis. During the 1930s, regulators developed rules based on credit ratings; those rules are the ancestors to today's widespread regulatory reliance. Without financial innovation and overreliance on credit ratings, the recent crisis likely would not have occurred, and certainly would not have been as deep.

Preview

Article first page

What do you think about the recent suggestion?

Trova nel catalogo di Worldcat