Abstract :
Why did the bankers, regulators and ratings agencies collaborate to build and run a system that was doomed to self-destruct? Did they fail to see the flaws, or deliberately ignore them? Unlike many banking crises, this one was not triggered by war, recession or external economic shock. All these questions and more are addressed in Gillian Tett´s ´Fool´s Gold´, a fascinating inside story by a Financial Times journalist. It explores the shadowy world of complex finance and derivatives and how the business of slicing and dicing debt led to the global credit crunch. How, it asks, could a small group of talented bankers, linked to an iconic pillar of the banking world, dream up an innovative set of products such as ´credit default swaps´ and others even more complex? It wasn´t entirely the fault of a few greedy individuals. The entire financial system seemed to go wrong as a result of flawed incentives and lack of accountability.
