Why are banking systems unstable in some countries–but not in others? Since 1840, the US had 12 crises; Canada had none.

Analyzing the political and banking history of the United Kingdom, the United States, Canada, Mexico, and Brazil through several centuries, “Fragile by Design” (Free access to the First chapter) demonstrates that chronic banking crises and scarce credit are not accidents due to unforeseen circumstances. Rather, these fluctuations result from the complex bargains made between politicians, bankers, bank shareholders, depositors, debtors, and taxpayers. The well-being of banking systems depends on the abilities of political institutions to balance and limit how coalitions of these various groups influence government regulations.
This seminal political economy analysis by Charles Calomiris & Stephen Haber is a revealing exploration of the ways that politics inevitably intrudes into bank regulation. This erudite and myth-busting book examines how coalitions of politicians, bankers, and other interest groups form, why some endure while others are undermined, and how they generate policies that determine who gets to be a banker, who has access to credit, and who pays for bank bailouts and rescues.

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