Ha-Joon Chang Quotes

If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.

If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.

We have institutions that have been allowed to become too big to fail because we had all kinds of flaws in our financial infrastructure, in the whole way over-the-counter derivatives work.

One of the big problems we had during the financial crisis was the intermingling of banks and holding companies and complex securities.

The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.

Securitization was one of the most brilliant financial innovations of the 20th century. It freed up a lot of capital. If it had been done responsibly, it would have been a wondrous thing because nothing is more stable, there’s nothing safer, than the American mortgage market.... It worked for years. But then people realized they could scam it.

Limiting the destructive risk-taking by large financial firms and banks which are 'too big to fail' is needed.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

It's not a stretch to say the whole financial industry revolves around the compass point of the absolutely safe AAA rating. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for.

We need to increase the transparency of shadow banking markets so that authorities can monitor for signs of excessive leverage and unstable maturity transformation outside regulated banks.

We need to think deeply about whether we can sustain banks that are not only too big to fail, but potentially too big to bail.

We need to hold Wall Street accountable for issuing the kinds of deceptive loans that nearly brought our economy to its knees in 2008.

The heart of the 2008 financial crisis was a coterie of reckless financial executives, working for too-big-to-fail financial companies, who were handsomely compensated for taking risks that almost ruined the economy when they failed.

Don't act like a bank unless you are a bank. That was a really big lesson learned from 2008.

Make the financial industry pay for its mistakes. That's the idea behind the best of the Obama administration's reform proposals: If banks issue securities backed by mortgages, say, then require them to hold some of that paper so that they will bear some of the losses.

Prior to the 2008 recession, many financial institutions were engaging in 'proprietary lending,' where a bank would invest funds for its own gain instead of earning revenue through commission by trading on behalf of clients.

The crash of 2008 was driven in no small part by unfair practices in the mortgage industry which led to many consumers being trapped in loans they didn't understand and couldn't afford.

The actions taken by central banks and other authorities to stabilize a panic in the short run can work against stability in the long run if investors and firms infer from those actions that they will never bear the full consequences of excessive risk-taking.

American business would be run better today if there was more alignment between CEOs' interest and the company. For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security... or every loan they made?

It appears to me that no one has learned a thing; that Wall Street is still operating as if 2008 never happened.

For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.

We should ban banks from risk-taking because society is going to pay the price.

It is probably the case that some regulation of financing will make crises less likely, and I would say higher capital requirements are an almost fail-safe way to make banks safer. But there are a lot of other things that may not be doing that, and so we need to be careful about sort of, like, rushing to one conclusion or another.

I don't want to drive the markets crazy. I don't want to create trouble, but rather order and rules and norms. We have to struggle against financial excesses, those who speculate with sovereign debt, those who develop financial products which have done so much harm.

This crisis exposed very significant problems in the financial systems of the United States and some other major economies. Innovation got too far out in front of the knowledge of risk.