Why regulatory attempts to stop financial bubbles often end up creating the next one
In short: Financial bubbles are a recurring feature of capitalism, yet attempts to prevent them through regulation frequently sow the seeds for future crises. This lecture examines the historical patterns of market instability and argues that the most robust regulatory frameworks emerge during stable periods rather than in the heat of a crisis.
Professor D'Maris Coffman explores the 300-year history of financial manias, tracing the cycle from the South Sea Bubble and Mississippi Scheme to modern market failures. She posits that reactive, crisis-driven regulation is often less effective than frameworks developed during the normal operation of markets.
The lecture draws on Coffman's background in financial history and the economics of the built environment. Her perspective is informed by her upbringing during the 1980s Savings & Loan crisis and her academic work at the Centre for Financial History, which she founded in 2009.
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Sources
- Summary by Intellect · source: Bubbles, Manias and Market Failures - D'Maris Coffman
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