This is a study of the high yield bond market, popularly called `junk bonds.' Glenn Yago has studied how companies that use junk bond financing compare in economic performance with their industry averages. This book shows that, contrary to what might be assumed, especially in view of the mixed reputation junk bonds have, the performance of these companies was superior in the vast majority of cases.

Since financial myths exploded in the 1980s, the perspective of time creates a unique opportunity to update and expand the analysis begun in Glenn Yago's 1991 book,Junk Bonds: How High Yield Securities Restructured Corporate America (Oxford University Press). At the time of its publication, Junk Bonds drew controversial responses from the Federal Reserve and government agencies. In retrospect, the evidence clearly casts favorable light on the role of high yield securities. The research presented here demonstrates how financial innovations enabled capital access for industrial restructuring, capital and labor productivity gains, and improved global competitiveness. Enough time has now passed to allow this dispassionate empirical analysis to shear away the hype and hysteria that surrounded the Wall Street scandals, Washington controversies, and media frenzy of the time. Beyond Junk Bonds provides a one-stop data, reference and case study presentation of the firms and securities in the contemporary high yield market and the financial innovations that spurred growth in the nineties and will continue to finance the future. The high yield market incubated successive waves of financial technologies that now proliferate beyond junk bonds to all the dimensions and dynamics of global debt and equity capital markets. It charts the recovery of the market in the 1990s, the recent wave of fallen angels, distressed credits and defaults, and suggests how the high yield market will be recreated in the global market of the 21st century. It explicates the linkages between the high yield market, and other credit and equity markets in managing a firm's capital structure to execute its business strategy. The weakening of the U. S. economy in 2001 and the huge shock to Wall Street from the terrorist attacks of September 11 witnessed a historic increase in the yield to maturity of high yield bonds. Despite the volatility in the flow of funds to high yield mutual funds and occasionally sharp increases in non-investment grade debt yields, the asset class has been one of the best performing fixed income investments of the past decades. In fact, high yield bonds offer an attractive risk-reward ratio competitive with more traditional asset classes. Anyone active in corporate finance, financial institutions and capital markets will find this book a must read for interpreting and understanding the recent history both of the high yield marketplace and its interaction with private equity, public equity, and fixed income markets.

Junk bonds burst into the nation''s headlines as the fastest growing and most controversial financial instruments of the 1980s. Branded with an unflattering nickname, these high yield securities were tarnished in the public eye by waves of negative publicity. Critics cast the financiers and entrepreneurs who pioneered their use as symbols of a decade of greed and financial excess. By the end of the 1980s, the heyday of junk bonds had seemingly come to a close with the conviction of junk bond pioneer Michael Milken and the bankruptcy of Drexel Burnham Lambert, the brokerage that dominated the high yield market. But the controversy surrounding junk bonds continues. Now, in Junk Bonds, business professor Glenn Yago turns the tables on conventional wisdom about this new financial technology. He offers the first systematic examination of the facts about high yield securities. His analysis provides hard evidence that demystifies junk bonds and explodes many of the popular myths that surround them. Junk Bonds sheds light on the role of high yield financing in what Yago calls the democratization of capital. Before the advent of junk bonds, only companies with an "investment grade" rating--five percent of the 23,000 American companies with sales over $35 million--had access to long term capital. In effect, the author argues, 95 percent of American companies were denied the means to finance growth and business development. Yago shows how junk bonds changed all that, breathing life into thousands of American companies that had been shunned by the capital markets. His research demonstrates that these "junk" companies outperformed many Fortune 500 firms in job creation, product development, sales, and business innovation. The real contribution of junk bonds, according to Yago, was to improve the productivity and competitiveness of American business by restructuring companies in the wake of the corporate conglomerations of the 1960s and 1970s. His findings show that divestitures by companies financed with high yield bonds were not necessarily destructive. Many sold-off units flourished as independent enterprises at a time when numerous "investment grade" companies stagnated or closed plants or fired workers. This restructuring of corporate America has enabled businesses to compete in a changing international environment, benefiting managers, workers, stockholders, and investors alike. Junk Bonds provides readers with a scholarly analysis that shears away the hype and hysteria that often accompany rapid change. And at a time when Wall Street is under greater scrutiny than at any time since the Depression, this provocative study provides a timely and thoughtful contribution to the debate surrounding junk bonds.

Since financial myths exploded in the 1980s, the perspective of time creates a unique opportunity to update and expand the analysis begun in Glenn Yago''s 1991 book, Junk Bonds: How High Yield Securities Restructured Corporate America (Oxford University Press). At the time of its publication, Junk Bonds drew controversial responses from the Federal Reserve and government agencies. In retrospect, the evidence clearly casts favorable light on the role of high yield securities. The research presented here demonstrates how financial innovations enabled capital access for industrial restructuring, capital and labor productivity gains, and improved global competitiveness. Enough time has now passed to allow this dispassionate empirical analysis to shear away the hype and hysteria that surrounded the Wall Street scandals, Washington controversies, and media frenzy of the time. Beyond Junk Bonds provides a one-stop data, reference and case study presentation of the firms and securities in the contemporary high yield market and the financial innovations that spurred growth in the nineties and will continue to finance the future. The high yield market incubated successive waves of financial technologies that now proliferate beyond junk bonds to all the dimensions and dynamics of global debt and equity capital markets. It charts the recovery of the market in the 1990s, the recent wave of fallen angels, distressed credits and defaults, and suggests how the high yield market will be recreated in the global market of the 21st century. It explicates the linkages between the high yield market, and other credit and equity markets in managing a firm''s capital structure to execute its business strategy. The weakening of the U. S. economy in 2001 and the huge shock to Wall Street from the terrorist attacks of September 11 witnessed a historic increase in the yield to maturity of high yield bonds. Despite the volatility in the flow of funds to high yield mutual funds and occasionally sharp increases in non-investment grade debt yields, the asset class has been one of the best performing fixed income investments of the past decades. In fact, high yield bonds offer an attractive risk-reward ratio competitive with more traditional asset classes. Anyone active in corporate finance, financial institutions and capital markets will find this book a must read for interpreting and understanding the recent history both of the high yield marketplace and its interaction with private equity, public equity, and fixed income markets.

An often-overlooked aspect of entrepreneurship in American is its role in emerging domestic markets (EDM). These markets – low-to-moderate income communities, ethnic- and women-owned businesses, urban areas – are frequently ignored by mainstream markets. Yet with current demographic trends, they are an increasingly large component of the US population. Entrepreneurship can serve as a means to foster business development in these emerging communities and as a critically important way to improve the standard of living in low- and moderate-income (LMI) sectors.Increasingly, policy makers, advocates and investors understand national economic growth demands business formation among all segments of the market, and that the best attack on poverty is job and wealth creation. A robust entrepreneurial climate helps address the challenges and harness the opportunities.“Entrepreneurship in Emerging Domestic Markets: Barriers and Innovation” is a compendium of papers written by the leading researchers and practitioners from the fields of finance, public policy, entrepreneurship, and economics. With this volume, the editors aim to provide scholars, students, investors, policymakers, and the business community a resource that explores the issues surrounding entrepreneurship in EDM communities.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.

Automobiles dominate transportation today in most American cities. After World War II, urban planners embraced highway transportation as the solution to urban congestion, while mass transit was shunned as outmoded and appropriate only for older, densely populated cities. Yet the prolonged energy crisis, beginning in 1973, shattered most previously held attitudes about the role of mass transit, and it was now promoted as central to energy efficiency and rational land use. If mass transit is now possible and even desirable in new, auto-oriented cities - Los Angeles, Frankfurt, Tokyo - why did it decline in the first place? In examining the historical conditions that led to the current crisis of urban transportation, the book offers an explanation of past urban and economic policy failures. The Decline of Transit will be essential reading for urban planners, politicians, economists, historians, and all others interested in the state of urban transportation today.

Policy makers around the globe should find that this text offers a cogent assessment of the contemporary regulatory environment in the US financial markets, and a blueprint for action in evolving global financial markets. Financial markets are among the most highly-regulated markets in the world. Nevertheless, financial crises still occur, witness the US savings-and-loan fiasco of the late 1980s and early 1990s, and the Mexican and East Asian Financial implosions of 1994 and 1997. What role does regulation play in stabilizing-or-destabilizing financial markets? "Restructuring Regulation and Financial Institutions" answers this question with incisive analysis of financial market regulation in the US. Each paper considers how regulation enhances or impedes the efficiency of a particular financial sector, and is followed by comments by two or three noted experts. The result of this approach is a wealth of useful information that may be applied by policy makers contemplating the restructuring of regulations and financial institutions.The contributors to this volume are distinguished economists, many of whom have careers not just in business, government, or academia, but have held influential positions in all three. Such varied backgrounds enable the contributors to offer remarkable insights based on the best of theory and practice. Never before has understanding the workings of U.S. financial market regulation been so important to the development of world financial markets. The ramifications of financial regulation in the United States extend far beyond the nation's borders. World financial markets are undergoing dramatic change, driven by the rapid development and deployment of new technology that enables information - and money - to travel farther, faster. However, a Byzantine array of regulatory structures in the international arena hinder the development of efficient global financial markets. Policy makers around the world are attempting to address the issues by emulating the financial markets of the US.

Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last “bubble,” if that is what we choose to call them. We haven’t had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we’re ready to understand the savings and loan “bubble” that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What’s more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart’s 1946 film, It’s a Wonderful Life.

Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last “bubble,” if that is what we choose to call them. We haven’t had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we’re ready to understand the savings and loan “bubble” that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What’s more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart’s 1946 film, It’s a Wonderful Life.

An often-overlooked aspect of entrepreneurship in American is its role in emerging domestic markets (EDM). These markets – low-to-moderate income communities, ethnic- and women-owned businesses, urban areas – are frequently ignored by mainstream markets. Yet with current demographic trends, they are an increasingly large component of the US population. Entrepreneurship can serve as a means to foster business development in these emerging communities and as a critically important way to improve the standard of living in low- and moderate-income (LMI) sectors.Increasingly, policy makers, advocates and investors understand national economic growth demands business formation among all segments of the market, and that the best attack on poverty is job and wealth creation. A robust entrepreneurial climate helps address the challenges and harness the opportunities.“Entrepreneurship in Emerging Domestic Markets: Barriers and Innovation” is a compendium of papers written by the leading researchers and practitioners from the fields of finance, public policy, entrepreneurship, and economics. With this volume, the editors aim to provide scholars, students, investors, policymakers, and the business community a resource that explores the issues surrounding entrepreneurship in EDM communities.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.

This is a study of the high yield bond market, popularly called `junk bonds.' Glenn Yago has studied how companies that use junk bond financing compare in economic performance with their industry averages. This book shows that, contrary to what might be assumed, especially in view of the mixed reputation junk bonds have, the performance of these companies was superior in the vast majority of cases.

Since financial myths exploded in the 1980s, the perspective of time creates a unique opportunity to update and expand the analysis begun in Glenn Yago's 1991 book,Junk Bonds: How High Yield Securities Restructured Corporate America (Oxford University Press). At the time of its publication, Junk Bonds drew controversial responses from the Federal Reserve and government agencies. In retrospect, the evidence clearly casts favorable light on the role of high yield securities. The research presented here demonstrates how financial innovations enabled capital access for industrial restructuring, capital and labor productivity gains, and improved global competitiveness. Enough time has now passed to allow this dispassionate empirical analysis to shear away the hype and hysteria that surrounded the Wall Street scandals, Washington controversies, and media frenzy of the time. Beyond Junk Bonds provides a one-stop data, reference and case study presentation of the firms and securities in the contemporary high yield market and the financial innovations that spurred growth in the nineties and will continue to finance the future. The high yield market incubated successive waves of financial technologies that now proliferate beyond junk bonds to all the dimensions and dynamics of global debt and equity capital markets. It charts the recovery of the market in the 1990s, the recent wave of fallen angels, distressed credits and defaults, and suggests how the high yield market will be recreated in the global market of the 21st century. It explicates the linkages between the high yield market, and other credit and equity markets in managing a firm's capital structure to execute its business strategy. The weakening of the U. S. economy in 2001 and the huge shock to Wall Street from the terrorist attacks of September 11 witnessed a historic increase in the yield to maturity of high yield bonds. Despite the volatility in the flow of funds to high yield mutual funds and occasionally sharp increases in non-investment grade debt yields, the asset class has been one of the best performing fixed income investments of the past decades. In fact, high yield bonds offer an attractive risk-reward ratio competitive with more traditional asset classes. Anyone active in corporate finance, financial institutions and capital markets will find this book a must read for interpreting and understanding the recent history both of the high yield marketplace and its interaction with private equity, public equity, and fixed income markets.

Junk bonds burst into the nation''s headlines as the fastest growing and most controversial financial instruments of the 1980s. Branded with an unflattering nickname, these high yield securities were tarnished in the public eye by waves of negative publicity. Critics cast the financiers and entrepreneurs who pioneered their use as symbols of a decade of greed and financial excess. By the end of the 1980s, the heyday of junk bonds had seemingly come to a close with the conviction of junk bond pioneer Michael Milken and the bankruptcy of Drexel Burnham Lambert, the brokerage that dominated the high yield market. But the controversy surrounding junk bonds continues. Now, in Junk Bonds, business professor Glenn Yago turns the tables on conventional wisdom about this new financial technology. He offers the first systematic examination of the facts about high yield securities. His analysis provides hard evidence that demystifies junk bonds and explodes many of the popular myths that surround them. Junk Bonds sheds light on the role of high yield financing in what Yago calls the democratization of capital. Before the advent of junk bonds, only companies with an "investment grade" rating--five percent of the 23,000 American companies with sales over $35 million--had access to long term capital. In effect, the author argues, 95 percent of American companies were denied the means to finance growth and business development. Yago shows how junk bonds changed all that, breathing life into thousands of American companies that had been shunned by the capital markets. His research demonstrates that these "junk" companies outperformed many Fortune 500 firms in job creation, product development, sales, and business innovation. The real contribution of junk bonds, according to Yago, was to improve the productivity and competitiveness of American business by restructuring companies in the wake of the corporate conglomerations of the 1960s and 1970s. His findings show that divestitures by companies financed with high yield bonds were not necessarily destructive. Many sold-off units flourished as independent enterprises at a time when numerous "investment grade" companies stagnated or closed plants or fired workers. This restructuring of corporate America has enabled businesses to compete in a changing international environment, benefiting managers, workers, stockholders, and investors alike. Junk Bonds provides readers with a scholarly analysis that shears away the hype and hysteria that often accompany rapid change. And at a time when Wall Street is under greater scrutiny than at any time since the Depression, this provocative study provides a timely and thoughtful contribution to the debate surrounding junk bonds.

Since financial myths exploded in the 1980s, the perspective of time creates a unique opportunity to update and expand the analysis begun in Glenn Yago''s 1991 book, Junk Bonds: How High Yield Securities Restructured Corporate America (Oxford University Press). At the time of its publication, Junk Bonds drew controversial responses from the Federal Reserve and government agencies. In retrospect, the evidence clearly casts favorable light on the role of high yield securities. The research presented here demonstrates how financial innovations enabled capital access for industrial restructuring, capital and labor productivity gains, and improved global competitiveness. Enough time has now passed to allow this dispassionate empirical analysis to shear away the hype and hysteria that surrounded the Wall Street scandals, Washington controversies, and media frenzy of the time. Beyond Junk Bonds provides a one-stop data, reference and case study presentation of the firms and securities in the contemporary high yield market and the financial innovations that spurred growth in the nineties and will continue to finance the future. The high yield market incubated successive waves of financial technologies that now proliferate beyond junk bonds to all the dimensions and dynamics of global debt and equity capital markets. It charts the recovery of the market in the 1990s, the recent wave of fallen angels, distressed credits and defaults, and suggests how the high yield market will be recreated in the global market of the 21st century. It explicates the linkages between the high yield market, and other credit and equity markets in managing a firm''s capital structure to execute its business strategy. The weakening of the U. S. economy in 2001 and the huge shock to Wall Street from the terrorist attacks of September 11 witnessed a historic increase in the yield to maturity of high yield bonds. Despite the volatility in the flow of funds to high yield mutual funds and occasionally sharp increases in non-investment grade debt yields, the asset class has been one of the best performing fixed income investments of the past decades. In fact, high yield bonds offer an attractive risk-reward ratio competitive with more traditional asset classes. Anyone active in corporate finance, financial institutions and capital markets will find this book a must read for interpreting and understanding the recent history both of the high yield marketplace and its interaction with private equity, public equity, and fixed income markets.

An often-overlooked aspect of entrepreneurship in American is its role in emerging domestic markets (EDM). These markets – low-to-moderate income communities, ethnic- and women-owned businesses, urban areas – are frequently ignored by mainstream markets. Yet with current demographic trends, they are an increasingly large component of the US population. Entrepreneurship can serve as a means to foster business development in these emerging communities and as a critically important way to improve the standard of living in low- and moderate-income (LMI) sectors.Increasingly, policy makers, advocates and investors understand national economic growth demands business formation among all segments of the market, and that the best attack on poverty is job and wealth creation. A robust entrepreneurial climate helps address the challenges and harness the opportunities.“Entrepreneurship in Emerging Domestic Markets: Barriers and Innovation” is a compendium of papers written by the leading researchers and practitioners from the fields of finance, public policy, entrepreneurship, and economics. With this volume, the editors aim to provide scholars, students, investors, policymakers, and the business community a resource that explores the issues surrounding entrepreneurship in EDM communities.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.

Automobiles dominate transportation today in most American cities. After World War II, urban planners embraced highway transportation as the solution to urban congestion, while mass transit was shunned as outmoded and appropriate only for older, densely populated cities. Yet the prolonged energy crisis, beginning in 1973, shattered most previously held attitudes about the role of mass transit, and it was now promoted as central to energy efficiency and rational land use. If mass transit is now possible and even desirable in new, auto-oriented cities - Los Angeles, Frankfurt, Tokyo - why did it decline in the first place? In examining the historical conditions that led to the current crisis of urban transportation, the book offers an explanation of past urban and economic policy failures. The Decline of Transit will be essential reading for urban planners, politicians, economists, historians, and all others interested in the state of urban transportation today.

Policy makers around the globe should find that this text offers a cogent assessment of the contemporary regulatory environment in the US financial markets, and a blueprint for action in evolving global financial markets. Financial markets are among the most highly-regulated markets in the world. Nevertheless, financial crises still occur, witness the US savings-and-loan fiasco of the late 1980s and early 1990s, and the Mexican and East Asian Financial implosions of 1994 and 1997. What role does regulation play in stabilizing-or-destabilizing financial markets? "Restructuring Regulation and Financial Institutions" answers this question with incisive analysis of financial market regulation in the US. Each paper considers how regulation enhances or impedes the efficiency of a particular financial sector, and is followed by comments by two or three noted experts. The result of this approach is a wealth of useful information that may be applied by policy makers contemplating the restructuring of regulations and financial institutions.The contributors to this volume are distinguished economists, many of whom have careers not just in business, government, or academia, but have held influential positions in all three. Such varied backgrounds enable the contributors to offer remarkable insights based on the best of theory and practice. Never before has understanding the workings of U.S. financial market regulation been so important to the development of world financial markets. The ramifications of financial regulation in the United States extend far beyond the nation's borders. World financial markets are undergoing dramatic change, driven by the rapid development and deployment of new technology that enables information - and money - to travel farther, faster. However, a Byzantine array of regulatory structures in the international arena hinder the development of efficient global financial markets. Policy makers around the world are attempting to address the issues by emulating the financial markets of the US.

Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last “bubble,” if that is what we choose to call them. We haven’t had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we’re ready to understand the savings and loan “bubble” that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What’s more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart’s 1946 film, It’s a Wonderful Life.

Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last “bubble,” if that is what we choose to call them. We haven’t had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we’re ready to understand the savings and loan “bubble” that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What’s more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart’s 1946 film, It’s a Wonderful Life.

An often-overlooked aspect of entrepreneurship in American is its role in emerging domestic markets (EDM). These markets – low-to-moderate income communities, ethnic- and women-owned businesses, urban areas – are frequently ignored by mainstream markets. Yet with current demographic trends, they are an increasingly large component of the US population. Entrepreneurship can serve as a means to foster business development in these emerging communities and as a critically important way to improve the standard of living in low- and moderate-income (LMI) sectors.Increasingly, policy makers, advocates and investors understand national economic growth demands business formation among all segments of the market, and that the best attack on poverty is job and wealth creation. A robust entrepreneurial climate helps address the challenges and harness the opportunities.“Entrepreneurship in Emerging Domestic Markets: Barriers and Innovation” is a compendium of papers written by the leading researchers and practitioners from the fields of finance, public policy, entrepreneurship, and economics. With this volume, the editors aim to provide scholars, students, investors, policymakers, and the business community a resource that explores the issues surrounding entrepreneurship in EDM communities.

China’s emerging financial markets reflect the usual contrast between the country’s measured approach toward policy, regulatory, and market reform, and the dynamic pace of rapid economic growth and development. But they also offer unusual challenges and opportunities. In the past five years, the pace of opening and reform has accelerated sharply. Recapitalization and partial privatization of the largest banks, and the allowance of some joint venture and branch operations for foreign financial institutions, are making rapid headway in developing and expanding financial services and improving access to domestic business and households. This book provides the most extensive look available at the evolving Chinese financial system. It begins with alternative perspectives on the evolution of the financial system and the broad outlines of its prospects and potential contribution to economic growth. Three articles review broad aspects of the financial system. Franklin Allen, Jun ‘‘QJ’’ Qian, Meijun Qian, and Mengxin Zhao lead off with overviews of the banking system and performance of the equity market and other institutions.