Audio – Banks love leverage, but should we?

April 12, 2007

bookstaber.jpgRichard Bookstaber, principal at FrontPoint and author of a book about the perils of financial innovation, says that banks have every incentive to create increasingly complicated derivatives products, and allow customers to boost their leverage higher and higher. But that can result in big swings in financial markets, and is not necessarily a good thing for society as a whole, he says.


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