The book is a remarkable history of banking and the banking industry in five different countries. The game of bank bargains phrase that we invented to describe the fact that the outcome of the rules of the game of banking reflect political alliances. There's no getting politics out. And financi wars, a lot of esokes.
Charles Calomiris of Columbia University and Stephen Haber of Stanford University, co-authors of Fragile by Design: The Political Origins of Banking Crises and Scarce Credit, talk with EconTalk host Russ Roberts about their book. The conversation focuses on how politics and economics interact to give some countries such as Canada a remarkably stable financial system while others such as the United States have a much less stable system. The two authors discuss the political forces that explain the persistence of seemingly bad financial regulation. The conversation includes a discussion of the financial crisis of 2008.