Information Asymmetry
by Tom Temple
3 April 2009
Can any of the anti-regulation economists who come here respond to this quote from vanity fair ?
One of the hidden causes of the current global financial crisis is that the people who saw it coming had more to gain from it by taking short positions than they did by trying to publicize the problem.
BTW: I found that article from here
Apr 3, 07:05 PM
I can’t speak for any anti-regulation agenda, but I don’t see how this article makes a case for increased or decreased regulation.
It talks about how the Icelandic Central Bank (as well as other regulatory authorities) ignored evidence of an asset bubble. So was the problem the lack of regulators or the naivete of the regulators?
Similarly, I think it’s an interesting quote, but I don’t see how the quote relates to the amount of regulation: Are you suggesting that increasing the authority of the central bank would have increased the gains from publicizing the problem (or decreased the gains from taking short positions)?