The Capitalisn't of Banking, with Anat Admati

Capitalisn't

University of Chicago Podcast Network

Stigler Center, Chicago Booth, Socialism, Antitrust, University Of Chicago Podcast Network, Growth, 087667, Policy, Monopoly, Professors, Distortion, Research, Competition, Capitalisnt, Inequality, Promarket, Politics, Policymaking, Special Interest, Economics, Efficiency, Regulations, Chicago, Business, Markets, University Of Chicago, Kate Waldock, Capitalism, Friction, Bethany Mclean, Government, Macroeconomics, News, Education, Waldock, Georgetown, Microeconomics, Luigi Zingales, Zingales, Finance, Ucpn

4.5 • 584 Ratings

🗓️ 18 January 2024

⏱️ 39 minutes

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Summary

It's been nearly 16 years since the federal government bailed out Wall Street to the tune of $700 billion in response to the financial crisis that precipitated the Great Recession. The idea that the public must guarantee critical financial institutions that are “too big to fail” was controversial then, but does it still remain an issue? Stanford finance professor Anat Admati, whom the New York Times profiled in an article titled "When She Talks, Banks Shudder," argues it’s become worse. Admati joins Bethany and Luigi to discuss the updated edition of her and Martin Hellwig’s book, The Bankers' New Clothes: What’s Wrong with Banking and What to Do About It. Dissecting new financial developments, including the failure of Silicon Valley Bank, the crypto industry, and shadow banking, Admati lays bare how the current financial system is rigged for the benefit of the few. She also prescribes how we can build and regulate a fairer and more accountable financial system and, thus, a more stable and equitable capitalist economy.

Transcript

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0:00.0	The banks, to my, you know, corporate doctor statuscope are unhealthy all the time.
0:07.2	And the fact that they hate equity with this passion is only evidence they have so little of it, too little of it.
0:14.1	I'm Bethany McLean.
0:15.7	Did you ever have a moment of doubt about capitalism and whether greed's a good idea?
0:22.1	And I'm Luigi Zengalis.
0:28.6	We have socialism for the very rich, rugged individualism for the poor. And this is Capital Isn't, a podcast about what is working in capitalism. First of all, tell me, is there some society
0:34.5	you know that doesn't run on greed? And most importantly, what isn't?
0:38.3	We ought to do better by the people that get left behind.
0:41.1	I don't think we shouldn't kill the capital system in the process.
0:44.7	So in 1981, the socialist candidate Francois Mitterrand won the presidential election in France.
0:51.2	It was the first time a socialist won the presidency.
0:55.5	You know what is the first thing he did? He nationalized all the major banks. I think I might be able to guess why you're
1:00.9	giving us this history lesson, but tell us. Because I want to discuss how crucial banks have been
1:06.6	to the development of the capitalist system. And to what extent they might distort capitalists,
1:11.1	to what extent they interact even when democracy?
1:14.1	Interesting.
1:14.7	We all talked a lot about banking.
1:16.8	It was mainstream cocktail party conversation
1:19.2	in the wake of the financial crisis,
1:20.9	but that seems to have faded,
1:22.8	not surprisingly, in the last decade.
1:24.6	And even with the SVB collapse,
	...

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