VOX, 25 March 2010
Rent capture through financial innovation
Bruno Biais, Jean-Charles Rochet, Paul Woolley
How does economic theory need to adjust in light of the global financial crisis? This column presents a new insight on how innovation leads to rent capture, which in turn is a sign of a potential crisis. This stems from asymmetric information in the financial sector. To avoid a repeat of the crisis, policymakers need to increase transparency. to continue reading please click here|