William Black on Global Financial Stability

WILLIAM Black, former bank regulator and Professor of Economics and Law at the University of Missouri, witnessed first hand how banks took control of the banking system to commit fraud on a colossal scale.

In his TED Talk from last year (watch it below) Black talks about “liar’s loans” and other tactics that the banks used to bring the global economy to its knees during the 2008 financial crisis.

Black makes a clear argument that the way to prevent future banking failure is to prevent “control fraud”, the situation where a CEO takes control of a legitimate entity (for our purposes, a bank) and uses the entity to commit fraud and get rich in the process.

Black provides a bleak outlook for the ongoing stability of the global financial system, arguing that a number of key regulatory reforms are needed (including shrinking “too big fail” banks so that they no longer pose a systemic risk).

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