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Anat Admati on Banking Regulations and Techlash

Masters in Business

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The Dark Side of Creditor Leverage

The dark side is that your decisions once indebted are very different and potentially very inefficient relative to if you were just doing things on your own money. So how do we, how do we deal with that in our financial system? How do we make our system less fragile than it appears to be? First thing to do is to counter the forces of that intense desire to keep leverging. The only counter to that is not, you know, clever death that converts to equity that nobodyis going to ever trigger,. a which, because we've seen that, is plain old equity, your earnings or dividends. That's eti but you put the money to good use. Don't burn it,

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