The Next Financial Crisis and How to Save Capitalism

by Askari, Hossein; Mirakhor, Abbas

• ISBN13: 9781137546951
• ISBN10: 1137546956
• Format: Hardcover
• Copyright: 2015-06-05
• Publisher: Palgrave Pivot

Summary

The financialization of the economy - the rapid growth of the financial sector relative to the real sector and their decoupling - has brought a number of interrelated problems which have contributed to growing income and wealth inequality. In this work, Hossein Askari and Abbas Mirakhor assert that it is time to make a bold change by putting our financial house in order and on a better path. Patchwork solutions such as higher capital requirements for banks and better regulations, supervision and enforcement are important, but at best they will only delay another inevitable financial crisis with devastating fallouts. The authors identify the prevalence of debt financing as the heart of the problem, and advocate for a fundamental reform of the financial system that reduces the supremacy of debt and increases the fraction of reserves in fractional reserve banking.

Author Biography

Hossein Askari is Iran Professor of International Business and International Affairs at George Washington University, USA. He has also served on the Executive Board of the International Monetary Fund and as Special Advisor to the Minister of Finance of Saudi Arabia.

Abbas Mirakhor is the first holder of the Chair of Islamic Finance at the International Centre For Education in Islamic Finance (INCEIF), Malaysia. He worked at the International Monetary Fund for 23 years.

Table of Contents

Table of Contents
Foreword; Dr. Vittorio Corbo
Preface
Acknowledgments
1: The Financial Sector - in Support of Growth or Financialization?
2: Recurring Financial Crises - The Causes
3: Recurring Financial Crises - The Fallouts
4: Recurring Financial Crises - The Essential Reforms
5: Conclusions and Our Financial Future
Bibliography