Being a weblog devoted to a variety of topics. Including Mathematics. And Mathematical Finance. Sometimes with homework.

Tuesday, October 7, 2008

Financial Crisis Revisited

A few days ago I noted Theodore Seto's explanation of the current financial crisis. Today I'd like do point you to Megan McCardle's explanation. Here's one important bit:

What we need, fundamentally, is not simply stricter regulation or less greedy bankers. What we need is better economic theory of how these things play out, so that the regulators have better tools to assess and prevent systemic risk.[emphasis mine]

Thus is demonstrated the old adage: the flip-side of crisis is opportunity. At least for you finance students!

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