ON-Lion Letter

The financial crisis of 2008 devastated the American economy and caused U.S. policymakers to rethink their approaches to major financial crises.  More than five years have passed since the collapse of Lehman Brothers, but questions still persist about the best ways to avoid and respond to future financial crises.  In Across the Great Divide:  New Perspectives on the Financial Crisis, new from Hoover Press, contributors  from academia, industry, and government analyze the financial crisis of 2008 -- its causes, effects on the U.S. economy, and the way ahead.

The volume is co-edited by Martin Neil Baily and Bradley Prize recipient John B. Taylor.  Baily is a senior fellow in the economic-studies program and holds the Bernard L. Schwartz Chair in Economic Development at the Brookings Institution.  Taylor is the George P. Shultz Senior Fellow in Economics and chairman of the Working Group on Economic Policy at the Hoover Institution and the Mary and Robert Raymond Professor of Economics at Stanford UniversityThe Lynde and Harry Bradley Foundation in Milwaukee supports Hoover's Economic Policy Working Group.

Across the Great Divide's chapters are edited versions of papers presented at an unusual joint Brookings-Hoover conference last year on the financial crisis.

The experts consider post-crisis regulatory policy reforms and emerging financial and economic trends, including the roles played by highly accommodative monetary policy, securitization run amok, government-sponsored enterprises (GSEs), large asset bubbles, excessive leverage, and the Federal funds rate, among other potential causes.  They address the role played by the Federal Reserve and examine the concept of "too big to fail."  And they review and assess resolution frameworks, considering experiences with Lehman and other firms in the crisis, Title II of the Dodd-Frank Act, and the Chapter 14 bankruptcy-code proposal.

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