Crunched: Lessons from the 2007 TLA crisis


This paper looks at the current turmoil in international financial markets. While this is often named after the US subprime sector in which it originated, he suggests that an alternative description could be the TLA crisis, given the profusion of three letter acronyms such as MBS, CDO and SIV deployed in any analysis of developments. The author argues that recent events tell us something important about the current financial system and its vulnerability to crisis, and provide some significant lessons for regulators and central banks.

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