Why Do Financial Crises Happen? With Jón Daníelsson

Interview recorded - 2nd of August, 2022On todays episode of the WTFinance I had the pleasure of speaking with Jón Daníelsson, Reader in Finance, Director of the Systemic Risk Centre at London School of Economics and author of the recently released book “The Illusion of Control: Why Financial Crises Happen, and What We Can (and Can’t) Do About It”.Buy the book here - Amazon - https://amzn.eu/d/4TdNJCfIndependent - https://uk.bookshop.org/books/the-illusion-of-control-why-financial-crises-happen-and-what-we-can-and-can-t-do-about-it/9780300234817On the podcast we talked about what is systemic risk, why financial crises occur, what causes them and changes that should be made in the future. I hope you enjoy!0:00 - Introduction0:27 - Jon’s influence for writing the book?1:04 - What is systemic risk?1:40 - More systemic risk in financial markets?2:39 - Extreme cases in UK and Iceland3:48 - Major factors that increase systemic risk?5:58 - Fools game for Central Bankers and Policy Makers?7:30 - What would the intelligent strategies for regulating financial markets?9:30 - How can Central Bankers and Policy Makers reduce Risk?11:25 - Taking away liquidity with high public and private debt?13:33 - Banks create money16:50 - Central Bank Time lag between decisions20:40 - How will the change occur?25:24 - Balance between protecting consumers and allowing innovation27:34 - Too Big to Fail Banks29:17 - Diversifying the landscape of banking and finance30:28 - Any similarities between today and 2008?31:38 - Credit Suisse having issues recently33:10 - The struggle managing massive companiesJón Daníelsson is director of the ESRC funded Systemic Risk Centre at the London School of EconomicsJón received his PhD in economics from Duke University, where his dissertation focussed on stochastic volatility. His research interests include systemic risk, financial risk forecasting and financial regulations.Jón has written two books, Financial Risk Forecasting and Global Financial Systems: Stability and Risk and published a number of articles in leading academic journals.Jón Daníelsson -Website - https://modelsandrisk.org/LinkedIn - https://www.linkedin.com/in/jon-danielssonTwitter - https://twitter.com/jondanielsson?s=21&t=KugDbCWdW9Cco3SBQ7NpuQWTFinance -Instagram - https://www.instagram.com/wtfinancee/Spotify - https://open.spotify.com/show/67rpmjG92PNBW0doLyPvfnTikTok - https://vm.tiktok.com/ZMeUjj9xV/iTunes - https://podcasts.apple.com/us/podcast/wtfinance/id1554934665?uo=4Linkedin - https://www.linkedin.com/in/anthony-fatseas-761066103/Twitter - https://twitter.com/AnthonyFatseas