Financial crises have become more frequent over the last 20 years. This book illuminates the debate over how the monetary authorities should handle these crises by bringing together a selection of the best writings on the subject.

Economics is not a hard science, subject to controlled experiments. In their absence, we economists construct narratives to explain events, often involving key sound bites. Among the sound bites of the financial crisis are the following: • “Separate the casino from the utility bank”.•...