Financial crises can happen for a variety of reasons: (a) nobody really understands what is going on (the collective cognition paradigm); (b) some understand better than others and take advantage of their knowledge (the asymmetric information paradigm); (c) everybody understands, but crises are...

During the 1980s and 1990s, the financial sector was the Achilles heel of Latin America and the Caribbean (LAC). Since then, LAC's financial systems have continued to gain in soundness, depth and diversity, becoming more integrated and competitive, with new actors, markets, and instruments...

What were the market and regulatory issues that led to the subprime crisis? How should prudential regulation be fixed? The answers depend on the interpretive lenses – or ‘paradigms' – through which one sees finance. The agency paradigm, which has dominated recent regulatory policy and...