The 2008-2009 Financial Crisis: Risk Model Transparency and Incentives
17 Pages Posted: 14 Jan 2010 Last revised: 31 Jan 2010
Date Written: November 12, 2009
Abstract
In this Preface, we offer some analysis of the 2008-2009 financial crisis and its implications for financial industry reform and research. We primarily focus on issues relating to transparency and the measurement of risk and how these are affected by management incentives that are often misaligned with the incentives of those who are exposed in various ways to the risk being measured. In the aftermath of the crisis many have called for increased transparency; we suggest that while transparency is no doubt a desirable goal in many ways, enhancing it could prove to be quite difficult.
Keywords: Financial Crisis, Crisis, Risk Model, Transparency, Financial Regulation, Incentives
JEL Classification: G00, G15, G38, E44, L10, N20
Suggested Citation: Suggested Citation
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