Book reviews
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# Crisis: Cause, Containment and Cure
Thomas F. Huertas, Palgrave Macmillan, 2010
Crisis: Cause, Containment and Cure’ explains how the global financial crisis of 2007-09 came about, how it is being contained and what steps should be taken to prevent such a crisis from happening again. Written by the Director of the Banking Sector at the Financial Services Authority of the UK, it gives a first-hand view of policy-making combined with rigorous economic analysis presented in an easily readable style. It is analytical – not anecdotal – based on up-to-date economic theory and recent policy pronouncements, including both macroeconomic and financial sector aspects. There are numerous books on the crisis but few that have the breadth, analytical rigor and first-hand experience of policy-making offered here by Dr. Huertas.
Enhanced with diagrams to illustrate key concepts, this book will be a valuable resource for banks, central banks, public policy-makers, banking regulators, law firms, securities associations, finance ministries, students of banking, finance and monetary economics and indeed anyone who seeks a balanced, comprehensive, global authoritative view of the crisis.
THOMAS F. HUERTAS is Director, Banking Sector for the Financial Services Authority, UK. Previously, he worked for Citigroup for nearly 30 years in various roles, including senior policy and business positions. He has written extensively on the current crisis, credit derivatives, insurance and retail banking.
# Financial Instability: Toolkit for Interpreting Boom and Bust Cycles
Vincenzo D’Apice and Giovanni Ferri, Palgrave Macmillan, 2010
Why have financial crises been increasingly frequent and severe in the last 30 years? How can financial crises be prevented?
What role do governments and international institutions play in their prevention? How does the latest crisis fit in the long-term political economy cycle of finance?
This book answers these questions, us¬ing three complementary parts: Part I provides the reader with the ‘toolkit’ necessary for understanding financial crises – explaining the essential elements of economic theory. In Part II the authors put these key theories in context, using them to illustrate the chief international crises since the Great Depression of the 1930s and events that, since the 1980s, have triggered a high level of instability. Whenever appropriate, similarities and differences between these historic crises and the recent crisis are highlighted. Part III focuses on the global financial crisis of 2007-09, triggered by the turmoil in the subprime mortgage market of the USA.
By offering a comprehensive explanation of the long-term dynamics of financial systems and by depicting the prototype of a financial crisis, the book enables an in-depth understanding of any specific crisis and gives models for identifying the crisis’s true origins and amplification channels. The book concludes with a discussion of ways to secure a stable, sustainable future for globalised finance.
VINCENZO D’APICE is Economist in the Research Department of the Italian Banking Association. His research interests include international finance, banking and regulation. He is currently undertaking economic research at the Instituto Einaudi, Italy.
GIOVANNI FERRI is Chair of the Department of Economics, University of Bari, Italy. He previously worked for the World Bank and the Banca d’Italia. He has published extensively on money and credit economics.
