Deus Ex Macchiato » ‘Maintaining Confidence’ paper is up

DEM makes recommendations on how to monitor and manage large institutions, worth a read. Pre crisis, one might have thought that: Banks survive if their assets are worth more than
January 29, 2013 - Editor
Category: Article

DEM makes recommendations on how to monitor and manage large institutions, worth a read.

Pre crisis, one might have thought that:

  • Banks survive if their assets are worth more than their liabilities.

Post crisis, we know that a more accurate account is

  • Banks survive if investors believe that the bank’s assets are worth more than their liabilities and further believe that this state of affairs is highly likely to persist.

Deus Ex Macchiato » ‘Maintaining Confidence’ paper is up.


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