Cloth $45.00 ISBN: 9780226330327 Published March 2016
E-book $10.00 to $45.00 About E-books ISBN: 9780226330464 Published March 2016 Also Available From

The Money Problem

Rethinking Financial Regulation

Morgan Ricks

The Money Problem

Morgan Ricks

336 pages | 32 halftones, 10 line drawings, 2 tables | 6 x 9 | © 2015
Cloth $45.00 ISBN: 9780226330327 Published March 2016
E-book $10.00 to $45.00 About E-books ISBN: 9780226330464 Published March 2016
Years have passed since the world experienced one of the worst financial crises in history, and while countless experts have analyzed it, many central questions remain unanswered. Should money creation be considered a ‘public’ or ‘private’ activity—or both? What do we mean by, and want from, financial stability? What role should regulation play? How would we design our monetary institutions if we could start from scratch?
In The Money Problem, Morgan Ricks addresses all of these questions and more, offering a practical yet elegant blueprint for a modernized system of money and banking—one that, crucially, can be accomplished through incremental changes to the United States’ current system. He brings a critical, missing dimension to the ongoing debates over financial stability policy, arguing that the issue is primarily one of monetary system design. The Money Problem offers a way to mitigate the risk of catastrophic panic in the future, and it will expand the financial reform conversation in the United States and abroad.


Part 1 Instability

1 Taking the Money Market Seriously
2 Money Creation and Market Failure
3 Banking in Theory and Reality
4 Panics and the Macroeconomy

Part 2 Design Alternatives

5 A Monetary Thought Experiment
6 The Limits of Risk Constraints
7 Public Support and Subsidized Finance
8 The Public-Private Partnership

Part 3 Money and Sovereignty

9 A More Detailed Blueprint
10 Rethinking Financial Reform


Review Quotes
Vanderbilt Law Review
"In his superb new book, The Money Problem, Ricks meticulously and persuasively argues that financial stability and money creation are two sides of the same coin. Understanding this relationship yields an immensely important policy payoff. By controlling and guaranteeing what counts as money, the government can solve the problem of financial panics, with all their untoward consequences. Ricks proposes several simple reforms to achieve this result. His proposal may seem radical, but he makes a compelling case that it is both feasible and desirable."
Darrell Duffie, Stanford University
The Money Problem is a fresh and insightful analysis of how money and shadow banking are implicated in financial crises and what to do about it. Ricks is intellectually fearless and takes nothing for granted."
Geoffrey Miller, New York University School of Law
“Ricks offers an original and important contribution to the ongoing policy debate about how ‘shadow banks’ should be regulated so as to improve financial stability and reduce the risk of another catastrophic breakdown. He proposes a highly original solution that is breathtakingly simple—but also comprehensive and far-reaching. Writing with a lively and engaging style, Ricks presents its points so clearly that anyone, even readers not trained in finance, can understand the arguments. The Money Problem is one of those rare works that combines serious scholarship with a genuinely interesting proposal for fundamental reform, dealing with questions central to the welfare of all.”
Jeremy C. Stein, Harvard University
“Ricks has written a fascinating and challenging book that is broadly accessible yet anchored in a deep conceptual understanding of the economics of financial markets, money, and banking. He makes clear that the fundamental fragilities that drive financial crises are similar across episodes, even as the institutional specifics can vary widely. Whether or not you agree with his policy prescriptions, you will come away with a better understanding of the essence of the problem that financial regulation seeks to address.”
David A. Skeel, Jr., University of Pennsylvania Law School
The Money Problem is a terrific book packed with extremely interesting ideas about the foundation of banking and monetary institutions and how their regulation might be reconceptualized. Writing with a clear, direct, and accessible style, Ricks deftly navigates through the often complex terrain and offers an intriguing alternative to current approaches. The Money Problem is due significant attention from legal scholars, economists, and financial experts; it will reshape key discussions on financial regulation for years to come.”
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