Why do banking crises occur?
Tuesday, March 10, 2020 - 07:00
in Psychology & Sociology
Why did the U.S. banking crisis of 2007-2008 occur? Many accounts have chronicled the bad decisions and poor risk management at places like Lehmann Brothers, the now-vanished investment bank. Still, plenty of banks have vanished, and many countries have had their own banking crises in recent decades. So, to pose the question more generally, why do modern banking crises occur?