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Anat Admati

lines on the record: 132
first: 2022-08-05
most recent: 2022-08-05
sittings or episodes: 1
sources: podcast

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“It is, and I know a little bit about it, but it is a very different system because the US is very fragmented system. And the Canadian system is basically a system of five banks or something like that, all pretty tightly regulated, but also very profitable. So essentially the way one of the ways I formulated the difference is that we subsidize debt for banking and they essentially subsidize equity by giving them a big charter value. Because they're so entrenched in their oligopoly.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“I had no idea about how much politics laws and law enforcement matter to economic outcomes. I just lived in the little bubble of economics where we make assumptions. And when I sort of realized what was going on in banking, I started questioning all the assumptions that I made before. And it's been my sort of journey ever since. It's like, huh, that's sort of interesting. Is this true? And, you know, what's actually going on? So I've become a sort of real explorer of what happens when I don't make the assumptions that I make or when I question people's assumptions.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“My first advice, because I've learned it kind of the hard way, is watch out for the assumptions you're making and other people are making. So when people say things, there's often implicit assumptions they're making. And bad assumptions can take you down, even LTCM, with all the brilliant people went down on bad assumptions. So better assumptions are very dangerous. And then, of course, you have to kind of be careful not to maintain the big picture, to beware of losing yourself in certain activities. So maintain the big picture and check for assumptions kind of my main advice.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh my God. So my all-time favorite is a little prince. That's just the book. I'm reading a lot, and now I'm listening so that makes it faster because I don't read as fast as I would like to. But I'm reading lots of books. Right at the moment, I sort of finished direct and I was like, The World for Sale and Freezing Order to discuss flying blind on Boeing, you know, sickening is a book on the healthcare sector and how we know all our healthcare systems, very scary Borson banking to some extent. American Kleptocracy. Right now, I'm reading a book very close to home called Who Killed Jane Stanford, which is like, whoa. I mean, all the stories we tell at Stanford and that history of Stanford going back to the 19th century and gilded age and the Stanfords whoa. So that's a history professor at Stanford who wrote a book Who Killed Jane Stanford. Jane Stanford was very important to the creation of Stanford, but right now, of course, Stanford is way off from what she wanted.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this advisor Steve Ross at Yale Was very important to getting me interested in finance, and in some respect in the sort of cosmic view of where I am today and my transformation of my, where he was there. Unfortunately, he died a few years ago, but he was there to sign my petitions and encourage me all the way to Texas Village. Was there to kind of tell me I'm not going mad when I hear all this nonsense and to approve of what I was doing, even though in some of my criticism of academics I criticize some of my sort of academic brothers who are also his students, but he sided with me. So that was very meaningful to me. Yeah, so he was my main advisor got me. Because right now, for knowing all the finance I know, I'm able to call the board.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“But I read so much about WeWork. I'm kind of sick of it, especially being Israeli. I love the book, Cult of We. Cultivu, yeah.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'm a little bit of a latecomer to finish it, but I've loved succession, which I've finally finished very recently. And now I'm intent on finishing Borgen because Borgen is about Danish. It's like the West Wing for Denmark. And it had this female minister, et cetera. Anyway, it's kind of a few seasons of a Netflix series Borgen. And so it's very good. I mean, I know there's, you know, we crash and other things. But that's enough.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“But if we were just silent, then they film us and we could be there. So they had another scene that they filmed in the hallways of the sort of Stanford University offices and we got whiteboards to decorate. So I have a certain corner in the whiteboard behind Milditch when he was kind of, you know, reflecting at the very final scene. And we saw it being filmed. And then we hung out with him. So it was kind of my reward. I'm like, you know, when I teach banking, I don't get to have so much fun. But when I thought about the internet, I actually got to see, and my point there was only here in this whole.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. So this was 2019 spring into fall. And so we were there. We flew down to LA and we had to bring our cap and gown if we had it or they would put on us. They had a whole thing of cap and gowns for this graduation thing event that we were sort of part of. So they had all these people they recruit for the day to be just sitting there. And then, and, you know, as long as you don't utter a word. So if we uttered one word in the movie, we would have to be unionized.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Know mission statement, so talk is chief, as I said. And so we taught this course to NBA entitled Internet Broken. And then this was spring quarter of 2018, something like that. And then, so as they were doing and the fall, they finished, they were showing the thing, and they were filming like early in the fall. They were filming the last episode. And so he calls and says, okay, you guys, I got them to fly four of you down to LA and Bameo in the very last episode and hang out here for the day and see how we film it, see all the scenes, see the prison scene, see this, all these different things. It was an abandoned kind of car manufacturing of some sort. It was just like a bunch of warehouses where they had it. I've never seen a show, you know, a fictional show. Being filmed, the cameras, all the rooms.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“I became, I said, you know, I'm curious about this sector. Guy knows everybody, okay, because everybody was a cameo in Silicon Valley. And he knows about the history of the internet and all of those things. And he's an economist, he's an anthropologist by training, sort of a producer, a writer. And so we embark on this MBA course. While they were writing the sixth season, so they end up putting me as an advisor. I mean, they didn't pay me anything. I just signed a bunch of paper and they gave me $200, which is like a bottle of wine for all of this, just because they didn't want me to later claim that, you know, I gave them some idea, copyright, because it was impacting their coverage of sort of governance issues, mission statements, they mocked mission statement, the plagiarism of mission statements, these kinds of things, because it's like...”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“On the show, they created this new. Compression house summer research because this co-producer, Jonathan Dutan, was sort of scouting the Silicon Valley to kind of find a believable story, to capture the spirit of Silicon Valley. And looking for storylines and concepts, and then he came across this. And then this professor and a couple other professors from computer science and engineering helped the show be as believable as it was. Now as it went through and it was all out there in the garage and all this stuff, it got to the sixth season. Now, my neighbor said to me knowing what I was doing about financial system and my general interest in corporations and society, said, you got to meet this guy, ponytail, and we're sitting around coffee. And later, he says, you know, you ought to teach a course with him. And that was when...”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So, how they found me was that they originally found my neighbor, who's an electrical engineering professor And his last name is Weisman. So he is the one after which the Weisman score, compression score is.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“And so you can't fix it until you're what the book tries to do is educate the public. So right now it's going to be 10 years since the book in February 2023 will be 10 years. And we're considering right now republishing this book in 2023 with sort of one epilogue chapter, maybe a preface explaining how the book still relevant to COVID bailouts to crypto, which we didn't get to discuss.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“That he started having these analogies of an empty cockpit, you know, oh my God, you know, all these people, nobody is taking, I told him, we took a walk in London along the river and I said, you know what? It's worse. I mean, he's an anthropologist by training. I come from the Ivory Tower on Finance down to the ground and we meet in the same place. This is crazy, okay? And I said to him, it's worse than an empty cockpit. He has a nightmare where he walks in the cockpit and it's empty. I said, you know what? The pilots of the airplane are paid to do flips and to fly low and they have their own parachutes. So they don't care about the passengers. So it's kind of worse. The people who control this system are benefit from its fragility.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Saying, and here is why it's flawed and wrong and misleading. And this enables this system to persist. At the same time, there was a book by a Dutch journalist who did called Yoris something called swimming with sharks. It was about banking culture. And all he did was he interviewed a bunch of people in the city of London about their jobs anonymously. And he was just trying to map out how people felt about their jobs and who's getting paid and who's getting fired and whether they think it's fair relative to their high school friends or whatever. And he became so alarmed with the financial system.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Quite amazing. Yes. And it takes advantage to a raise a child. He's entitled an African saying that Hillary Clinton adopted for the title of her book. It takes a village to abuse a child is all the enablers who look away. All the people who kind of make this situation wrong persist. And, you know, go to all kinds of things. Go to Weinstein, go to a lot of wrongdoings that persist. They were enablers along the way. So I wanted to see the enablers in my world in which maybe not even crimes were committed, but there were sort of legal deceptions. There was a capturing of the regulators. There was sort of the capturing of the politicians. There was confusing the politicians. There was confusing the public. Who all did that? And so I went all the way to academics, all the way to people whose job is to the regulators and their narratives and basically said, here is what they're”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“In the story, in the movie spotlight, the lawyer to some of the victims Just like a lot of settlements that I've been looking at, all the NDAs. The lawyer says to the journalist if it takes a village to raise a child, it takes a village to abuse a child.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“On and on, the people who are enabling the situation. So the keyword is enablers, okay? Now the title came from the movie Spotlight, which was the other movie that came out. Spotlight was a movie about sexual harassment in the church, Catholic Church, and it was about journalists in Boston uncovering how sexual harassment in the church persisted and how once they investigated the abusers moving around the system to a different as much more systemic than”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the way in which people cause harm is sort of by doing and by not doing is by being willfully blind by all these terms from psychology about how you can cause harm and sleep overnight. So it was basically I started asking why has it been hard to get through with my simple message? Who were all the people who were trying to be on the other side of this? So you start with the bankers, they benefit, you then go to all the different private sector gatekeepers. Accountants, the credit rating agencies, you know, consulting companies that a lot of people that want the regulation to be very complicated because it creates a lot of jobs, you know, doing stress tests and all kinds of fancy things, even if they're not really good.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. So he went back to partnerships moving to limited liability corporations and becoming reckless with other people's money. But anyway, so I was asked to write an essay for a book that was edited by a philosopher. That was called Just Financial Market, Finance in a Just Society. So it was about justice. And so I had to connect to what I've seen in finance in the banking area to some sense of justice, of who inflicts injustice.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“And I came to see it with Adam McKay and some of you know pre showing because he wanted to see what finance people academics will say to the movie. And later he recorded a session with us because people were asking him what to do. Of course, he finished the book by now nobody goes to jail, which was kind of most of what he showed was legal. So it was kind of not the end that Michael Lewis had in the book. Michael Lewis, by the way, in the book, The Big Short, ends by saying the problem was not that Lehman was allowed to fail. The problem was that Lehman was allowed to succeed for as long as long.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“And in 2015, I decided okay, what happened to me here? Why is it so difficult? And, you know, who did I meet along the way who kind of led to this situation that I encountered? And so at the time in 2015, two movies came out. I was actually in New York for a month or two staying at NYU and was kind of in town for various things. There are many stories I can tell you about that period. And the two movies that came out and competed for the Oscar that year were The Big Short.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know what goes on in people's heads. Oh, I do when I see the same thing. I can say, you know, this person should know better than nonsense. Sometimes I'm told people whisper in my ear they don't understand. And I'm like, wait a minute, bread and butter finance, they don't understand. Leverage and risk, risk and return, they don't understand. That doesn't make any sense to me. Open letter to JP Morgan Chase, you know, reading his letter to shareholders. I write all these different op-eds. I just did this for five years straight, including a year and a half in the bunker writing the book.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So I will talk a little bit about this because this was my kind of my own summary of my experience over the five years in which I really was devoted entirely to this little policy battle where the book and writings that we did afterwards were sort of debunking a whole set of flawed claims, what we call, we call them bankers' new clothes, but it's not just bankers, it's policymakers, it's even academics who say things that fall under the category of fallacious false or then kind of true but irrelevant.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, he's a partner in a law firm, and one of the things he did afterwards was Ben Loskey, who was the regulator in New York, employed him, yes, and employed him for a few years. He was a full-time monitor of Credit Suisse. Credit Suisse being now one of the poster childs. I mean, you know, if you want to talk about reckless banks, you had David Enrich, I think right now, but Deutsche Bank being the poster child. And, you know.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And so they were not even acknowledging their losses. I mean, you could see this on their book to market. I mean, you could see that they were exaggerating their books hugely.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the programs for homeowners were voluntary to the lenders. Now, the loans were securitized, so now there's no lender to negotiate with, and it's much more efficient to renegotiate the loan than to foreclose. Instead, you had a massive housing crisis in which there were a lot of foreclosures, a lot of people misplaced, very traumatic experience for a lot of people, whose mortgages should have been restructured, basically. And again, it was the lenders that were doing it, and then the lenders that just didn't choose. I mean, you had in the accounting of, say, Citigroup, you had them not want to... You know, not want to restructure second mortgages, which were clearly or not to declare on their accounting, which were clearly total loss because they were second junior mortgages. But they were rescued.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Neil Borowski wrote a book about bailout. He was Inspector General of the TARP, the trouble that said, you know, relief program. And he was complaining and describing and other people did too how little the programs did. I mean, remember from that, they bailed out AIG, they bailed out the Ok manufacturers, but homeowners didn't get relief and it had collateral harm.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“But not a lot. Yes. So there was clearly a huge bias towards bailing out the banks, you know, forming the runway, all of that. And, you know, the person who wrote”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So you pay over. That's what governments did in Europe. You take over the payroll. So this way, it's not that there are discretion to kind of their goodwill. Now they can't hire again in the airlines, et cetera. So, you know, they came for bailouts and the airlines are a classic example after having paid every, virtually everything in dividends right before that. You would have had plenty of money if they were a little more served. And airlines in particular, bankruptcy has traditionally worked great. You don't ground the planes, you want them to slide. Everything is flying. And you just renegotiate some contracts. We had plenty of time to do that during the crisis. Why are we, you know, why are we bailing out the investors that just got a huge reward? We're not effectively at least zeroing them, if not, you know, clawing back some of this money.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So at the start of the COVID crisis, there was a letter organized a few hundred academics in law of finance economics signed it telling the government before right around the time of the CARES Act, first one, to not give money to corporations, to give it to people who need it. So part of it was logistical in this country because you have the data in IRS and everything in Social Security.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“That too, and a lot of companies that shouldn't have, it wasn't meant to God. And then the Fed was standing ready and started buying corporate bonds. And that was a huge debt spray for the entire corporate sector, which again, the investment banks benefited from all this debt party that went on. And so, you know, it was wonderful life during COVID in the banking sector.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Do well at 2 or 3 percent. But these banks have so many ways to make money. I mean, look at the COVID. Okay, look at how they made money through COVID. With the supports to everybody. I mean, banks were the vehicle through which we gave PPP loans. And what was PPP loan but a windfall for the banks? They were given, I think they took the money at the quarter percent and were paid 1%. So that's a spread right there on hundreds of billions of dollars. And it was just guaranteed and forgiven. And so they took no risk. They did hardly any creditworthiness because we were rushing to give the money. out and they were not liable for checking the papers because it was all so rushed they gave a lot of it to their favorite clients and then needed to give more of it there was a lot of fraud”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“In banking, I don't think so, for banks actually higher interest rates could be very profitable. Yeah, more spread. So they're actually having some trouble with squeezed yields. So isn't the push?”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you're overweight and unhealthy, but you have the feeding tube, you know what I mean? Whatever. Whatever analogy is. What do you think is going to happen?”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, if you live dead doesn't mean if you're bloated and inefficient and taking up much of more of the economy than we need. Because you can. And meanwhile, you know, you're paying yourself and all these people, all these salaries where we should have a more efficient financial sector. And instead, it's so bloated and so profitable, it comes out of somewhere. So, you know, to me, the banking sector is not healthy just because it exists and profitable.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Of this Sudden, so let's just be clear on what Dodd-Frank was. Dodd-Frank was a massive law with a thousand pages. Dodd-Frank gave authority to regulators. Dodd-Frank gave in Title I Told the Fed to solve the too big to fail problem to do whatever they need for financial stability. And the Fed is still failing to do that.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah, that's just the most obvious thing. That's like the no brainer thing. So when you look at it, as I came and looked at it, I'm like, why are we here? There's a simple costless fix. You just rearrange the financial claims in the economy so where the upside, the people with the upside also bear the downside. That's the way it's supposed to be. It's not supposed to be, you know, privatized gain, socialized losses. It's supposed to be, and this is a basic thing by partisan and everything”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Same thing. And they weren't supposed to one another. Exactly. People talk. I have visuals in my TEDx doc that basically have tall buildings and I color code them red for debt, green for equity very little and then the green disappears and they top along one another and then there's Uncle Sam kind of trying to kind of so you”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all, you have to ease out of that tech preferences, and secondly, you're just against what their incentives are. You know, if it's a tax subsidy, it comes out of somewhere. I'm even willing to settle on the tax bill as an amount of cash that they owe that's a function that's the same as right now, except if they didn't lever as much in order to get that same”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“So the homeowner may or may not be able to avoid the downside, but homeowners levered up took cash out refinancing and relevered. And basically cash out refinancing when the house price goes up is the same as paying dividends when you make profit. It's the same. I ask my students, what's the equivalent of cash hour refinancing? Bethany McLean wrote the house is not a credit card, but that was the ad home on vacation, you know, before the financial crisis. So this is like the dividends that the regulators are allowing banks to keep paying even though they live on pathetically low meaningful equity levels. Now, they don't default, so you don't see that they may well be insolvent. We just don't know it because the accounting disclosures don't really show you.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“How you can shift the race to somebody else. And how would you manage? If you can shift the downside risk to somebody and you can get the upside, that's the bright side of leverage for those who take it if they can avoid the downside.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“But you put the money to good use, don't burn it, you know, invest it. If you invest in something safe, the risks to the shareholders will go down and the required return accordingly because we know finance, risk and return are intertwined, risk and required return. Why is Warren Buffett never paying dividends? Because he's investing the money on behalf of his shareholders. So are we not so Warren Buffett himself when he invests in banks? Well, he is buying back stuff. I know. Well, he, well, yeah, because that's a more tax advantageous. All of this comes back.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Thing as an economist, how will the world society be harmed if the banks retain their earnings? They're still their money. Warren Buffett never pays”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's like their intense hate of it says, I can't live unless you give me cheap debt to keep rolling my debt. You know, I'll default. Terrible things will happen or whatever. So they have always access to funding, especially if you're a too big to fail bank. The creditors will just not think, especially if they lend to you with collateral in short term, that they'll be harmed. You know, once they think they're harmed, you know, they'll start running off, et cetera. So you have fragile funding. The only counter to that is not clever debt that converts to equity that nobody's going to ever trigger, which because we've seen that, is plain old equity. Your earnings, you know what I mean? You have profits that you pay out. How will the world be harmed? For 10 years now, the book is almost 10 years old. We've been asking every so often macroeconomists, all kinds of people speak in this space, even academics, saying, just tell me one.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“It goes to To be the first thing to do is to counter the forces of that intense desire to keep leveraging, which, you know, I sometimes say the more they hate equity, the more I know they have too little of it.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Of first goes to the creditor because you're after, so you might be biased against making a boring business loan if you're a bank because you want to go playing derivative instead.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“From liability, they managed to find tricks to shield from liability all the time or to just sort of shift the liabilities around kind of in between all the contracts and the covenants and all of that. So there's a lot of shielding going on. But in any case, that's if you're clever, if you're an individual or a small business, it's harder for you to play those games of liability shifting. Anyway, so the dark side is that you have your decisions once indebted are very different and potentially very inefficient relative to if you are just doing things on your own money versus that borrowed money and a little bit of your own money because you're going to take excessive risk you're going to gamble for resurrection, take excessive risk. So you're biased in favor of risk, in favor of more boring, and against certain boring investments because they benefit from those, the net present value of those.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, Pfizer. Yeah, we asked Judge Rakoff about that. And he'll tell you there are recidivists in the Southern District. They are a recidivist corporation. He loves to give the example of Pfizer even after the COVID. And he says they would keep coming back. There would be a deferred prosecution. So why we keep deferring it? And then once I insisted they admit guilt, they send the liability, the criminal liability to a subsidiary and they fail that subsidiary and go and completely continue.”
2022-08-05 · Masters in Business · Anat Admati on Banking Regulations and Techlash · IDENTIFIED FROM THE TRANSCRIPT · source