The power of bad ideas: How conventional wisdom led to financial crisis
Sir John Gieve speaks at Governance roundtable on financial crisis
In the current issue of Governance, John Gieve (formerly of the Bank of England) and Colin Provost (University College London) explain how a flawed intellectual model discouraged coordination by monetary and regulatory authorities that might have prevented the financial crisis. “This common intellectual framework helps to explain why similar mistakes were made in countries with very different institutional arrangements,” Gieve and Provost argue. Future reforms will put more emphasis on coordination between central banks and regulators, as well as checks against “policy groupthink.” Open access to the article: Ideas and Coordination in Policymaking.
