Anat Admati: The Challenge of Large, Complex Financial Institutions (5/7)

The video discusses the challenges and implications of high leverage in banking, focusing on Basel 3 regulations, equity's role in stability, and the systemic risks posed by excessive borrowing. It highlights the paradox of subsidizing leverage despite its negative externalities and explores potential regulatory solutions, including higher capital requirements. The impact of shadow banking on economic growth and the need for political will to enforce stricter regulations are also examined.

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