Financial Markets and Institutions

Abstract

When I took leave from Columbia University in September 2006 to take a position as a member (governor) of the Board of Governors of the Federal Reserve System, I never imagined how exciting—and stressful—the job was likely to be. How was I to know that, as Alan Greenspan put it, the world economy would be hit by a “once-ina-century credit tsunami,” the global financial crisis of 2007–2009? When I returned to Columbia in September 2008, the financial crisis had reached a particularly virulent stage, with credit markets completely frozen and some of our largest financial institutions in very deep trouble. The global financial crisis, which has been the worst financial crisis the world has experienced since the Great Depression, has completely changed the nature of financial markets and institutions. Given what has happened, the study of financial markets and institutions has become particularly exciting. I hope that students reading this book will have as much fun learning from it as we have had in writing it.