Making Economics Pluralist - The Glasgow Economic Forum

On Saturday I had the great privilege of contributing to the Glasgow Economic Forum, which is an annual event run by and for undergraduate students at the Adam Smith Business School at the University of Glasgow. I gave a lecture about my book Banking in Crisis and was part of a panel discussion (along with Nick Crafts, Catherine Schenk and Duncan Ross - see picture below) on the benefits of economic history to economics.

I was really impressed by the level of debate and discussion - it was great to see so many (200+) young minds thinking deeply about economics. Furthermore, it was great to see so many young economists thinking about the discipline and thinking about the discipline in a heterodox manner. A lot of pressure has come from students on the economics profession to change the economics curriculum and make it heterodox or pluralist. A similar society to the Glasgow Economic Forum, called the Post-Crash Economics Society, exists at the University of Manchester.

The Failure of Herstatt Bank

As an undergraduate, I was taught about the failure of Herstatt Bank in 1974 and Herstatt risk. This bank was only the 35th largest bank in Germany at the time so why would anyone be interested in studying its failure? Herstatt failed because of its involvement in risky foreign exchange business. When it closed its doors on 26 June 1974, counterparty banks (mainly in New York) had not received dollars due to them because of time-zone differences - this is known as settlement risk. The cross-jurisdictional implications of its failure resulted in the Bank for International Settlements setting up the Basel Committee on Banking Supervision and Herstatt's failure was a key reason for the establishment of real-time gross settlements systems, which ensures that payments between two banks are executed in real time. The Bank of England's Ben Norman has an interesting post on Herstatt over at the Bank's new blog ( Bank Underground ). As well as giving an excellent overview of

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press .

The Great Depression

Marginal Revolution University has a great video on the Great Depression.

Finance: Past, Present and Future

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