Risks increase while logic of conglomeration unfolds
The full process of conglomeration (increased opportunity to take risks leads to increaesed vulnerability to market swings, which begets crisis, which begets the next round of conglomeration and so on) unfolds slowly punctuated by acute crises.
Immediately related elementsHow this works
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The Global Financial Crisis »The Global Financial Crisis
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Long-term causes of the financial crisis? »Long-term causes of the financial crisis?
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Unintended consequences of earlier public policy choices »Unintended consequences of earlier public policy choices
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Investment banks incentivised to move into riskier activities »Investment banks incentivised to move into riskier activities
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How were investment banks incentivised to increase risk? »How were investment banks incentivised to increase risk?
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Allowing mixing of commercial and investment banking in 1990s »Allowing mixing of commercial and investment banking in 1990s
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Enabled commerical and investment banking conglomeration »Enabled commerical and investment banking conglomeration
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Risks increase while logic of conglomeration unfolds
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