Margaret M. Blair, Vanderbilt University Law School
Presentation summary
- An increasing share of income in US is going towards top decile and top percentile
- An increasing share of GDP is in finance; 7.5% of GDP today, double what it was in 1980s
- Since late 1970s the ratio of assets in shadow banking institutions to assets in depository institutions has increased greatly
- Financial sector and leverage
- Leverage in depository institutions v. shadow banking institutions
- Unregulated shadow banking institutions have experienced steady increase in leverage since 1960s
- Shadow banking institutions’ leverage higher than depository institutions’ – instability of sector connected to big bonuses/payouts for traders and executives
- Creates financial instability by pushing risk onto creditors