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Monday, September 26, 2016

Macro Musings Podcast: Morgan Ricks



My latest Macro Musings podcast is with Morgan Ricks. Morgan is a law professor at Vanderbilt University where he specializes in financial regulation. Between 2009 and 2010, he was a senior policy adviser at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 U.S. Treasury Department where  he dealt with financial stability initiatives and capital markets policies related to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 financial crisis.

Before joining cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Treasury Department, Morgan was a risk-arbitrage trader at Citadel Investment Group, a Chicago-based hedge fund. He previously served as a vice president in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 investment banking division of Merrill Lynch & Co., where he specialized in strategic and capital-raising transactions for financial services companies.

Morgan is also cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 author of a new book “The Money Problem: Rethinking Financial Regulation”. He joined me to discuss his new book and its implications for policy. His book is timely and adds some needed perspective to understanding cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Great Recession. I happened to review his book for National Review and so it was a nice follow up for me to get him on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 show.

A key point he makes in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 book, and one that we discuss on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 show, is that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 standard definition of money is too narrow. Money, properly understood, should include both retail and institutional money assets. This is a point I have repeatedly  made on this blog and in various papers. Morgan, however, does a much better job articulating this point and his chapter two "Taking cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Money Market Seriously" by itself make cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 book a great investment. 

This understanding is important because it helps us better understand cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 financial crisis of 2007-2008. First, it helps us see that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 institutional money assets were susceptible to a bank run just like retail money assets were before FDIC was introduced. The potential for a bank run with cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 institutional money assets came to fruition in 2007-2008. Second, this understanding also helps us see that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 bank run caused a collapse in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 broad money supply and that, in turn, helped bring about cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 sharp collapse in 2008-2009. Money still matters! It also, arguably, played a key role in anemic recovery that followed. 

The collapse in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 money supply can be seen in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 figure below. It shows several broad measures of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 money supply that include both retail and institutional money assets. The measures come from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Center for Financial Stability:


We go on to discuss his proposal for fixing cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 run-prone nature of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 banking system, what it would mean for banking, how policy would operate, and more. Once again, anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r fascinating conversation throughout. And if you want furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r details read his book.

You can listen to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 podcast on Soundcloud, iTunes, or your favorite podcast app. You can also listen via cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 embedded player above. And remember to subscribe since more shows are coming. 

Related Links
Morgan Ricks Homepage
Morgan Ricks Twitter Account
Morgan Ricks Book 

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