Risk and Liquidity

Before joining Princeton in 2006, Hyun Song Shin was Professor of Finance at the London School of Economics. He is a leading exponent of financial booms and crises, and has been a leading figure in the policy debates during the financial crisis. He has written extensively for both an academic and practitioner audience on financial risk, financial regulation and monetary policy. He has served as editor or editorial board member of several scholarly journals, and has served in an advisory capacity to central banks and policy organizations on financial stability issues. He is a fellow of the Econometric Society and of the British Academy.

In the Great Recession, the world has looked for leading economists to offer a new and better understanding of macroeconomic instability, as Keynes did in the Great Depression. In this book, Hyun Song Shin delivers what was needed. Step by step, he develops a new comprehensive understanding of how macroeconomic booms and busts can be derived from microeconomic forces in the banking system. This book should be recognized as a major contribution to macroeconomic theory.

• 1. Nature of Financial Risk ; 2. Value-at-Risk Capital ; 3. Boom and Bust Driven by Value-at-Risk ; 4. Dynamic Hedging ; 5. Asset-Liability Management ; 6. Financial System ; 7. Lending Booms ; 8. The Case of Northern Rock ; 9. Securitisation and the Financial System ; 10. A Fresh Start