The Bankers’ New Clothes – What’s Wrong with Banking and What to Do about It

Fernando Moreira

Abstract


Sometimes inaccurate arguments are repeated so often and with impressive (apparent) authority that most people take them for granted. Anat Admati and Martin Hellwig illustrate one of these situations in their book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It. By using a pun inspired by the classic tale The Emperor’s New Clothes by Hans Andersen, Admati and Hellwig guide us around the world of the “bankers’ new clothes”, that is,  “flawed and misleading claims that are made in discussions about banking regulation” (p. 9). In the tale, everybody initially pretends to see the emperor’s invisible clothes in order not to appear stupid given that the invisible clothes were made by two (allegedly) highly skilled weavers.   


Keywords


Bankers

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References


Myerson, R. B. (2014). Rethinking the principles of bank regulation: A review of admati and hellwig’s the bankers’ new clothes. Journal of Economic Literature, 52, 197–210.




DOI: https://doi.org/10.15194/jofi_2015.v1.i3.41

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