Risk and Liquidity

• Addresses the most topical issues in the financial crisis and provides a means to understand recent key events
• Emphasis on simple exposition of the key ideas that makes the core mechanisms immediately accessible to the reader
• Develops an analytical framework that encompasses rigorous economics, in a style that is accessible to casual readers who wish to grasp the underlying driving forces of a modern financial system.
• Coverage of topics ranging from economics, finance and accounting, as well as the key policy debates

This book presents the Clarendon Lectures in Finance by one of the leading exponents of financial booms and crises. Hyun Song Shin's work has shed light on the recent global financial crisis and he has been a central figure in the policy debates. 

The paradox of the global financial crisis is that it erupted in an era when risk management was at the core of the management of the most sophisticated financial institutions. This book explains why. The severity of the crisis is explained by financial development that put marketable assets at the heart of the financial system, and the increased sophistication of financial institutions that held and traded the assets. Step by step, the lectures build an analytical framework that take the reader through the economics behind the fluctuations in the price of risk and the boom-bust dynamics that follow. The book examines the role played by market-to-market accounting rules and securitisation in amplifying the crisis, and draws lessons for financial architecture, financial regulation and monetary policy.

This book will be of interest to all serious students of economics and finance who want to delve beneath the outward manifestations to grasp the underlying dynamics of the boom-bust cycle in a modern financial system - a system where banking and capital market developments have become inseparable.

Readership: Suitable for advanced undergraduates, graduates and academics; Policymakers and government officials; and bankers interested in understanding boom-bust cycles and the recent global financial crisis.