An Evening with Professor Aliber
April 10, 2014: 6:30 PM - 9:00 PM
Join us on April 10 at the Chicago Booth Europe Campus for an evening with Professor Emeritus Robert Z. Aliber. Professor Aliber will lead a talk on "The Source of the Financial Crisis".
There have been four waves of financial crisis in the last thirty years, involving more than forty countries. One unique feature is that every currency crisis has been associated with a banking crisis, and ninety percent of the banking crisis have been associated with a currency crisis. The pattern in the data is that each of these countries has experienced an economic boom in the several years prior to the crisis; each also has experienced an investment inflow, which has led to an increase in the price of securities and an increase in the price of its currency, unless this price has been pegged.
In each of these episodes the indebtedness of the borrowers is increasing at rates much faster than their incomes and than the interest payments on the indebtedness. Moreover the external indebtedness of the countries is increasing more rapidly than their GDPs and than the interest payments on their indebtedness. Both the borrowers and the countries are on non-sustainable trajectories. The puzzle is that the lenders ignore that the borrowers are on a non-sustainable trajectory; they extend credit at an accelerating rate. Moreover the regulatory community--the central banks, the bank regulators, the stock market analysts, the credit rating agencies, the International Monetary Fund, the Organization of Economic Cooperation and Development--also fail to recognize that the end game for the growth of credit is a financial crisis.
Chicago Booth London Campus
25 Basinghall Street
London, EC2V 5HA, United Kingdom
6:30 PM-7:00 PM: Registration
7:00 PM-8:00 PM: Talk with Q&A
8:00 PM-9:00 PM: Networking Reception
Robert Z. Aliber (Speaker)
Professor Emeritus, Chicago Booth
Robert Z. Aliber has written extensively about exchange rates, and international financial and banking relationships and policy problems. Publications include The Reconstruction of International Monetary Arrangements (ed., Macmillan, 1986), The Handbook of International Financial Management (ed. Dow Jones Irwin, 1989),. and Global Portfolios (co-editor, Business One Irwin, 1991). He is a co-author of Money, Banking, and the Economy (Norton, First Edition, 1981, Fourth Edition 1990), Manias, Panics, and Crashes: A History of Financial Crises (Palgrave MacMillan, 2005), and author of The International Money Game (Palgrave MacMillan, 2001).
While at Chicago, he developed the Program of International Studies in Business and the Center for Studies in International Finance. He has consulted to the Board of Governors of the Federal Reserve System and to other U.S. government agencies, the World Bank and the International Monetary Fund, and to the research institutes and private firms, testified before committees of the Congress, and lectured extensively in the United States and abroad.
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