The 2008 financial crisis is widely touted as supporting the case for more bank regulation and taxation to deal with “systemic” risk. This claim, however, often rests on dubious ideas about the effects of borrowing and the causes of herd behavior.

Bogdan Glăvan is associate professor of economics at the Romanian American University in Bucharest.
Flavia Anghel is an associate professor of finance at the Romanian-American University in Bucharest.
Banking and FinanceBanking Law and RegulationBusiness and EntrepreneurshipEconomic PolicyEconomyFree Market EconomicsLaw and LibertyPublic Choice
Other Independent Review articles by Bogdan Glăvan
Fall 2008 Coordination Economics, Poverty Traps, and the Market Process: A New Case for Industrial Policy?