The Financial Crisis: a Market View December 3, 2008

Host: Cato Institute. In this time of economic turbulence there is a popular perception that the crisis was caused by the lack of regulation. Therefore politicians around the world are looking for solutions that rely on increased government interference. The immediate consequence of such an approach was the massive bailout of a significant share of the financial industry. In both developed and developing countries the temptation to increase government control over the economy may drive them towards even more nationalization. The longer-term consequences are hard to predict but there is already talk in Europe about ‘redefining capitalism’. At such a time, arguing in favor of economic liberalization and limited government is an uphill battle. There are lessons to be learned. It is important to explain the policy causes of the financial crisis (such as monetary policy fuelled asset bubbles and the securitization of subprime mortgages by Government Sponsored Enterprises, Fannie Mae and Freddie Mac) and identify principles for a forward agenda based on sound market principles. With our speakers we will examine the financial crisis from three perspectives: United Kingdom (Tim Congdon), United States (William Niskanen), and Russia (Andrei Illarionov).

Official Website: http://www.cato.org/events/120308invite.pdf